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Notes to Accounts of Asian Hotels (West) Ltd.

Mar 31, 2018

1. Earnings per share (EPS)

Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders after deducting preference dividend and attributable taxes by the weighted average number of equity shares outstanding during the period. For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.

* Subject to the exit provisions of the Investment Agreement, statutory and other approvals, if any, the Company and the subsidiary company - M/s Aria Hotels & Consultancy Services Private Limited (Aria) had to provide the investors (IL&FS Group) the exit option after March 31, 2013. Aria had provided the exit option to investors(IL&FS Group) as per the terms & conditions of the Investment Agreement, however the matter has still not been concluded and is pending. In view of the same, impact of future dilutive potential equity shares has not been considered in calculating diluted earnings per share.

2. Significant accounting judgments, estimates and assumptions

The preparation of the Company''s financial statements requires management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.

Judgments, estimates and assumptions

The judgments and key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below. The Company based its judgments, assumptions and estimates on parameters available when the financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of the Company. Such changes are reflected in the assumptions when they occur. "

Taxes

Deferred tax assets, in case of history of losses, are recognized for unused tax losses to the extent only to the extent that the entity has sufficient taxable temporary differences or there is convincing other evidence that sufficient taxable profit will be available against which the unused tax losses or unused tax credits can be utilized by the entity. Significant management judgment is required to determine the amount of deferred tax assets that can be recognized, based upon the likely timing and the level of future taxable profits together with future tax planning strategies. (Refer note 19)"

Defined benefit plans (gratuity benefits)

The cost of the defined benefit gratuity plan and other post-employment benefits and the present value of the gratuity obligation are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.

The parameter most subject to change is the discount rate. In determining the appropriate discount rate for plans operated in India, the management considers the interest rates of government bonds in India.

The mortality rate is based on publicly available mortality tables for the specific countries. Those mortality tables tend to change only at interval in response to demographic changes. Future salary increases and gratuity increases are based on expected future inflation rates in India. Further details about gratuity obligations are given in Note 31.

Fair value of financial instruments

When the fair values of financial assets and financial liabilities recorded in the balance sheet cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques including the present valuation technique. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgment is required in establishing fair values. Judgments include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments. See Note 34 and 35 for further disclosures.

Impairment of non-financial assets

Impairment exists when the carrying value of an asset or cash generating unit exceeds its recoverable amount, which is the higher of its fair value less costs of disposal and its value in use. The fair value less costs of disposal calculation is based on available data from binding sales transactions, conducted at arm’s length, for similar assets or observable market prices less incremental costs for disposing of the asset. The value in use calculation is based on a DCF model. The cash flows are derived from the budget for the next five years and do not include restructuring activities that the Company is not yet committed to or significant future investments that will enhance the asset’s performance of the CGU being tested. The recoverable amount is sensitive to the discount rate used for the DCF model as well as the expected future cash-inflows and the growth rate used for extrapolation purposes.

Impairment of financial assets

The Company is exposed to credit risk from its financing activities, including deposits with banks, security deposits, trade receivables and other financial instruments. Credit risk from balances with banks is managed by the Company’s treasury department in accordance with the Company’s policy. Investments of surplus funds are made only with approved counterparties and within credit limits assigned to each counterparty. Provision for security deposit is measured using 12 month expected credit losses. Customer credit risk is managed by each unit subject to the Company''s established policy, procedures and control relating to customer credit risk management. Outstanding customer receivables are regularly monitored for any expected default in repayment. An impairment analysis is performed at each reporting date on an individual basis for major clients. In addition, a large number of minor receivables are grouped into homogenous groups and assessed for impairment collectively. The Company does not hold collateral as security. Refer note 34 & 35 for further details.

3 Interest in subsidiaries

The financial statements of the Company include group information, wherever required, pertaining to following:

4.. Gratuity and other post-employment benefit plans

A. Defined benefit plans - General Description

The Company operates gratuity plan wherein every employee is entitled to a benefit equivalent to 15 days salary (includes dearness allowance) last drawn for each completed year of service. The same is payable on termination of service, or retirement, or death, whichever is earlier. The benefit vests after five years of continuous service. Gratuity benefits are valued accordance with the Payment of Gratuity Act, 1972.

Footnotes:

(1) Company has received refund of Rs. 55.56 lakhs out of Rs. 95.94 lakhs towards the amount paid under protest for the Service Tax demand raised in earlier years. The petition is filed with Tribunal Authorities for refund of remaining amount and hence been included under “Loans and Advances” as “Claims Recoverable”. On February 9, 2016 Asst. Commissioner of Refund has rejected company refund claims on ground of unjust enrichment and does not prove that burden of tax paid was not passed to the customer directly or by way of increase in the cost of services . Company has filed Appeal with Commissioner of Appeal contesting department claims. Received the favorable order for Rs 40.38 lakhs on March 26th, 2018 from commissioner appeal. Company has filled refund request with the department.

(2). Company received notice from Principal Additional Director General, DGPM, Customs on December 27, 2017 towards service tax refund order of Assistant Commissioner amounting Rs 55.56 lakhs. Cross objection is raised that department issued refund order without examination and finding of unjust enrichment. Vide order dated April 18, 2018 Principal Additional Director Genera, DGPM set aside the refund order earlier passed by Assistant Commissioner and rejected our sanctioned refund amount of Rs 55.56 lakhs. The company has decided to file appeal with CESTAT against the said order.

(3) The Company has received property tax demand of Rs. 569.18 lakhs from Mumbai Municipal Corporate (“MMC”) based on capital value system which is retrospectively from April 01, 2010, out of which, we have already booked and paid Rs. 302.63 lakhs in our books of accounts pertaining from Financial Year 2010-11 to 2014-15. Hotels & Restaurant Association (Maharashtra) has filed a writ application in the High Court of Bombay against the new capital value system.

Hon’ble High Court has passed an interim Order on February 24, 2014 directing all petitioners to pay municipal property tax at pre-amended rates plus 50% of the differential tax between ratable value system and capital value system. Final decision of Hon’ble High Court is pending. Meanwhile company has made provision as per Interim High Court Order for the demand raised by MMC in the financial statements.

(4) The company has received letter dated December 15, 2017 from Additional Director General of Foreign Trade (DGFT) advising the Company to refund the Served from India Scheme (SFIS) benefit along with applicable interest. Against the show cause notice dated December 19th, 2017 from Directorate of Revenue Intelligence (DRI) seeking the refund of duty of Rs 1200.21 lakhs towards the SFIS license availed, the Company has received stay order from Hon’ble High Court of Delhi restraining the authorities from proceeding to take any steps to recover the amount till the next date of hearing. The matter was held for hearing on Feb 19, 2018 and April 24, 2018 along with other connected matters on same issue. On both the dates Hon’ble Division Bench did not hold the Court and the matter has now been adjourned to August 09, 2018.

(5) The Company is under obligation to export goods with in a period of six year from the date of issue of EPCG License issued in terms of para 5.2 of Foreign Trade Policy 2009-2014. As on the date of Balance Sheet, the company is under obligation to export goods worth Rs. 293.57 lakhs as at March 31, 2018 within the stipulated time as specified in the respective licenses.

(6) The Company has received Notice of Demand of Rs 12.22 lakhs for Vat assessment for the FY 2013-14 dated March 17, 2018 from Deputy Commissioner of Sales tax. Against the said order , Company has filed an appeal on May 29,2018 before Joint Commissioner (Appeal) Sales tax.

(7) The Company executed corporate guarantees amounting to Rs. 28.35 Crores for and on behalf of Aria Hotels and Consultancy Services Pvt. Ltd. (subsidiary of the Company) for import of capital Goods under EPCG Scheme in favour of DGFT or Custom Authorities, out of which Corporate Guarantee amounting to Rs. 17.94 Crores has been released and corporate guarantees amounting to Rs. 10.41 Crores are pending till 31st March, 2018.

(8) Company has received show cause cum demand notice of Rs 515.51 lakhs on October 16, 2012 from Service Tax authorities for the period FY 2007-08 to 2011-12 towards wrong classification of services provided by Hyatt & its affiliates. Department disallowed cenvat credit on Hyatt payments due to wrong classification. Company has filed detailed reply and contesting all the claims with Commissioner of Service Tax. Awaiting for the hearing.

33. Related party transactions

(A) List of related parties:

(i) Subsidiary company:

Aria Hotels and Consultancy Services Private Limited

(ii) Key management personnel:

- Mr. Sushil Kumar Gupta (Chairman & Managing Director)

- Mr. Sudhir Gupta (Executive Whole -Time Director)

- Mr. Sandeep Gupta (Executive Whole -Time Director)

- Mr. Rakesh Kumar Aggarwal (Chief Financial Officer)

- Mr. Vivek Jain (Company Secretary)

- Mr. Nikhil Sethi ( Company Secretary) (till 12-09-2015 )

(iii) Relative of Key Management Personnel

- Ms. Sukriti Gupta (Daughter of Mr. Sudhir Gupta, Executive Whole-Time Director)

- Mr. Sidharth Aggarwal (Son of Mr. Rakesh Kumar Aggarwal, Chief Financial Officer)

(C) Terms and conditions of transactions with related parties:

The sales to and purchases from related parties are made on terms equivalent to those that prevail in arm’s length transactions. Outstanding balances at the year-end are unsecured and interest free and settlement occurs in cash. There have been no guarantees provided or received for any related party receivables or payables. For the year ended 31 March 2018, the Company has not recorded any impairment of receivables relating to amounts owed by related parties (31 March 2017: INR Nil, 1 April 2016: Nil). This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates.

The management assessed that current portion of investments, cash and cash equivalents, other bank balances, trade receivables, others, loans, borrowings, trade payables and other payables of current nature approximate their carrying amounts largely due to the short-term maturities of these instruments.

The fair value of the financial assets and liabilities is included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.

The following methods and assumptions were used to estimate the fair values:

Security deposits given and received - The company’s security deposits (given and received) have been fair valued by applying DCF method using a discount rate representative of the company''s current rate of borrowings. They are classified as level 3 fair value in the fair value hierarchy due to the inclusion of unobservable inputs.

Debt component of non convertible preference shares - The debt component of preference shares have been fair valued by applying DCF method using a discount rate representative of the company''s current rate of borrowings. They are classified as level 3 fair value in the fair value hierarchy due to the inclusion of unobservable inputs.

Unquoted investments in mutual funds - The fair value is calculated by using the publicly available net asset value (NAV) of the mutual funds as on reporting date. Net asset value (NAV) is a mutual fund''s price per share which is calculated by dividing the total value of all the securities in its portfolio, less any liabilities, by the number of fund shares outstanding.

Floating rate borrowings - The carrying value and fair value of floating rate borrowings has been considered the same since the interest rate approximates its fair value.

There have been no transfers between Level 1 and Level 2 during the period.

5 Financial risk management objectives and policies

The Company’s principal financial liabilities comprise loans and borrowings, security deposits taken, employee related payables, trade and other payables. The main purpose of these financial liabilities is to finance the Company’s operations. The Company’s principal financial assets include investments, loan to subsidiary, security deposits given, employee advances, trade and other receivables, cash and short-term deposits that derive directly from its operations.

The Company is exposed to market risk, credit risk and liquidity risk. The Company’s senior management oversees the management of these risks. The Company’s senior management is supported by a Risk Management Compliance Board that advises on financial risks and the appropriate financial risk governance framework for the Company. The financial risk committee provides assurance to the Company’s senior management that the Company’s financial risk activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Company’s policies and risk objectives. All derivative activities for risk management purposes are carried out by specialist teams that have the appropriate skills, experience and supervision. It is the Company’s policy that no trading in derivatives for speculative purposes may be undertaken. The Board of Directors reviews and agrees policies for managing each of these risks, which are summarized below.

Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and other price risk, such as equity price risk and commodity risk. Financial instruments affected by market risk include investments, loans and borrowings, deposits and advances.

The sensitivity analysis in the following sections relate to the position as at 31 March 2018, 31 March 2017 and 01 April 2016.

The sensitivity analysis have been prepared on the basis that the amount of net debt, the ratio of floating to fixed interest rates of the debt and the proportion of financial instruments in foreign currencies are all constant in place at 31 March 2018.

The analysis exclude the impact of movements in market variables on: the carrying values of gratuity and other post-retirement obligations; provisions.

The following assumptions have been made in calculating the sensitivity analysis:

- The sensitivity of the relevant profit or loss item is the effect of the assumed changes in respective market risks. This is based on the financial assets and financial liabilities held at 31 March 2018, 31 March 2017 and 01 April 2016.

Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company’s exposure to the risk of changes in market interest rates relates primarily to the Company’s long-term debt obligations with floating interest rates.

Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Company’s exposure to the risk of changes in foreign exchange rates relates primarily to the Compny’s operating activities (when revenue or expense is denominated in a foreign currency).

Credit risk

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities including deposits with banks and financial institutions, foreign exchange transactions and other financial instruments.

Trade receivables:

Customer credit risk is managed by company subject to the policy, procedures and control relating to customer credit risk management. Outstanding customer receivables are regularly monitored for any expected default in repayment.

An impairment analysis is performed at each reporting date on an individual basis for major clients. In addition, a large number of minor receivables are grouped into homogenous groups and assessed for impairment collectively. The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets disclosed in Note 6. The Company does not hold collateral as security.

Financial instruments and cash deposits

Credit risk from balances with banks and financial institutions is managed by the Company’s treasury department in accordance with the Company’s policy. Investments of surplus funds are made only with approved counterparties and within credit limits assigned to each counterparty. Counterparty credit limits are reviewed by the Company’s Board of Directors on an annual basis, and may be updated throughout the year subject to approval of the Company’s Finance Committee. The limits are set to minimize the concentration of risks and therefore mitigate financial loss through counterparty’s potential failure to make payments.

The Company’s maximum exposure to credit risk for the components of the balance sheet at 31 March 2018, 31 March 2017 and 01 April 2016 is the carrying amounts.

Liquidity risk

The Company’s objective is to maintain a balance between continuity of funding and flexibility through the use of bank overdrafts and bank loans. The Company assessed the concentration of risk with respect to refinancing its debt and concluded it to be low. The Company has access to a sufficient variety of sources of funding and debt maturing within 12 months can be rolled over with existing lenders.

6. Capital management

For the purpose of the Company’s capital management, capital includes issued equity share capital, preference share capital and all other equity reserves attributable to the shareholders of the Company. The primary objective of the Company’s capital management is to maximize the shareholder value.

The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. 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’s policy is to keep the gearing ratio between 43% and 48%. The Company includes within net debt, interest bearing loans and borrowings, trade and other payables, 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 interest-bearing loans and borrowings that define capital structure requirements. Breaches in meeting the financial covenants would permit the bank to immediately call loans and borrowings. There have been no breaches in the financial covenants of any interest-bearing 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.

7. SEGMENT INFORMATION

Information regarding Primary Segment Reporting as per Ind AS-108

The Company is engaged in only one segment of Hotel business. Accordingly, the segment revenue, segment results, segment assets and segment liabilities are reflected by the financial statements themselves as at and for the financial year ended 31 March 2018.

8. Standards issued but not yet effective

The amendments to standards that are issued, but not yet effective, up to the date of issuance of the Company’s financial statements are disclosed below. The Company intends to adopt these standards, if applicable, when they become effective.

The Ministry of Corporate Affairs (MCA) has issued the Companies (Indian Accounting Standards) Amendment Rules, 2017 and Companies (Indian Accounting Standards) Amendment Rules, 2018 amending the following standard:

(a) Ind AS 115 Revenue from contracts with customers

Ind AS 115 was issued on 29 March 2018 and establishes a five-step model to account for revenue arising from contracts with customers. Under Ind AS 115, revenue is recognized at an amount that reflects the consideration to which the Company expects to be entitled in exchange for transferring goods or services to a customer.

The new revenue standard will supersede all current revenue recognition requirements under Ind AS. This new standard requires revenue to be recognized when promised goods or services are transferred to customers in amounts that reflect the consideration to which the Company expects to be entitled in exchange for those goods or services. Ind AS 115 is effective for the Company in the fiscal yeae 2019 using either one of two methods: (i) retrospectively to each prior reporting period presented in accordance with Ind AS 8 Accounting Policies, Changes in Accounting Estimates and Errors, with the option to elect certain practical expedients as defined within Ind AS 115 (the full retrospective method); or (ii) retrospectively with the cumulative effect of initially applying Ind AS 115 recognized at the date of initial application (1 April 2018) and providing certain additional disclosures as defined in Ind AS 115 (the modified retrospective method).

The Company continues to evaluate the available transition methods and its contractual arrangements. The ultimate impact on revenue resulting from the application of Ind AS 115 will be subject to assessments that are dependent on many variables,

including, but not limited to, the terms of the contractual arrangements and the mix of business. The Company has established an internal team to implement Ind AS 115 related to the recognition of revenue from contracts with customers and it continues to evaluate the changes to accounting system and processes, effect on financial statements and additional disclosure requirements that may be necessary. Upon adoption the Company does not expect a material change in the manner in which revenue arrangements are recognized from the current practice.

b) Amendments to Ind AS 12 Recognition of deferred tax assets for unrealized losses

The amendments clarify that the Company needs to consider whether tax law restricts the sources of taxable profits against which it may make deductions on the reversal of that deductible temporary difference. Furthermore, the amendments provide guidance on how the Company should determine future taxable profits and explain the circumstances in which taxable profit may include the recovery of some assets for more than their carrying amount.

The Company is required to apply the amendments retrospectively. However, on initial application of the amendments, the change in the opening equity of the earliest comparative period may be recognized in opening retained earnings (or in another component of equity, as appropriate), without allocating the change between opening retained earnings and other components of equity. The Company applying this relief must disclose that fact.

These amendments are effective for annual periods beginning on or after 1 April 2018. The Company is currently evaluating the requirements of the amendment and the effect on the financial statements is being evaluated.

(c) Appendix B to Ind AS 21 Foreign currency transactions and advance consideration

The Appendix clarifies that, in determining the spot exchange rate to use on initial recognition of the related asset, expense or income (or part of it) on the derecognition of a non-monetary asset or non-monetary liability relating to advance consideration, the date of the transaction is the date on which the Company initially recognizes the non-monetary asset or non-monetary liability arising from the advance consideration. If there are multiple payments or receipts in advance, then the Company must determine the transaction date for each payment or receipt of advance consideration

The Company may apply the Appendix requirements on a fully retrospective basis. Alternatively, the Company may apply these requirements prospectively to all assets, expenses and income in its scope that are initially recognized on or after:

(i) The beginning of the reporting period in which the Company first applies the Appendix, or

(ii) The beginning of a prior reporting period presented as comparative information in the financial statements of the reporting period in which the Company first applies the Appendix.

The Appendix is effective for annual periods beginning on or after 1 April 2018. The Company is currently evaluating the requirements of the amendment and the effect on the financial statements is being evaluated."

(d) Transfers of investment property — Amendments to Ind AS 40

The amendments clarify when an entity should transfer property, including property under construction or development into, or out of investment property. The amendments state that a change in use occurs when the property meets, or ceases to meet, the definition of investment property and there is evidence of the change in use. A mere change in management’s intentions for the use of a property does not provide evidence of a change in use.

The amendments are effective for annual periods beginning on or after 1 April 2018. However, this standard is not applicable on the Company.

(e ) Ind AS 28 Investments in associates and joint ventures - Clarification that measuring investees at fair value through profit or loss is an investment-by-investment choice

The amendments clarify that:

- The Company that is a venture capital organization, or other qualifying entity, may elect, at initial recognition on an investment-by-investment basis, to measure its investments in associates and joint ventures at fair value through profit or loss.

- If the Company, that is not itself an investment entity, has an interest in an associate or joint venture that is an investment entity, the entity may, when applying the equity method, elect to retain the fair value measurement applied by that investment entity associate or joint venture to the investment entity associate’s or joint venture’s interests in subsidiaries. This election is made separately for each investment entity associate or joint venture, at the later of the date on which: (a) the investment entity associate or joint venture is initially recognized; (b) the associate or joint venture becomes an investment entity; and (c) the investment entity associate or joint venture first becomes a parent.

The amendments should be applied retrospectively and are effective from 1 April 2018. However, this standard is not applicable on the Company"

(III) Footnotes to the reconciliation of equity and reconciliation of profit or loss:

a. Security deposit paid

(i) Under Indian GAAP, the security deposits have been recorded at transaction value however under Ind AS security deposit paid, being a financial asset, has been recorded initially at fair value and subsequently at amortized cost.

(ii) Recording of security deposit under Ind AS, initially at fair value gives rise to a differential between transaction value and fair value which has been recognized at prepaid rent. Under Indian GAAP no such prepaid rent was recorded.

b. Security deposit taken

(i) Under Indian GAAP, the security deposits have been recorded at transaction value however under Ind AS security deposit taken, being a financial liability, has been recorded initially at fair value and subsequently at amortized cost.

(ii) Recording of security deposit under Ind AS, initially at fair value gives rise to a differential between transaction value and fair value which has been recognized at deferred rental income. Under Indian GAAP no such deferred rental income was recorded.

c. Defined benefit liabilities

Both under Indian GAAP and Ind AS, the Company recognized costs related to its post-employment defined benefit plan on an actuarial basis. Under Indian GAAP, the entire cost, including actuarial gains and losses, are charged to profit or loss. Under Ind AS, remeasurements are recognized immediately in the balance sheet with a corresponding debit or credit to retained earnings through OCI. Thus, the employee benefit cost is reduced by INR 25.91 lakhs and remeasurement gains/ losses on defined benefit plans has been recognized in the OCI net of tax.

d. Deferred Taxes:

Indian GAAP requires deferred tax accounting using the income statement approach, which focuses on differences between taxable profits and accounting profits for the period. Ind AS 12 requires entities to account for deferred taxes using the balance sheet approach, which focuses on temporary differences between the carrying amount of an asset or liability in the balance sheet and its tax base.

The application of Ind AS 12 approach would have resulted in recognition of deferred tax on new temporary differences which was not required under Indian GAAP.

Further, deferred tax has been recognized on Ind AS transition adjustments.

e. Proposed dividend

Under Indian GAAP, proposed dividends including DDT are recognized as a liability in the period to which they relate, irrespective of when they are declared. Under Ind AS, a proposed dividend is recognized as a liability in the period in which it is declared by the company (usually when approved by shareholders in a general meeting) or paid.

In case of the Company, the liability relating to proposed dividend (including dividend distribution tax) has been derecognized against retained earnings as at 1 April 2016.

44. First-time adoption of Ind AS

(I) These financial statements, for the year ended 31 March 2018, are the first the Company has prepared in accordance with Ind AS. For periods up to and including the year ended 31 March 2017, the Company prepared its financial statements in accordance with accounting standards notified under section 133 of the Companies Act 2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2014 ("Indian GAAP" or "previous GAAP").

Accordingly, the Company has prepared financial statements which comply with Ind AS applicable for periods ending on 31 March 2018, together with the comparative period data as at and for the year ended 31 March 2017, as described in the summary of significant accounting policies. In preparing these financial statements, the Company’s opening balance sheet was prepared as at 1 April 2016, the Company’s date of transition to Ind AS. This note explains exemptions availed by the Company in restating its Previous GAAP financial statements, including the balance sheet as at 1 April 2016 and the financial statements as at and for the year ended 31 March 2017.

Exemptions applied:

Ind AS 101 allows first-time adopters certain exemptions from the retrospective application of certain requirements under Ind AS. The Company has applied the following exemptions.

(a) Property, plant and equipment and intangible assets

Since there is no change in the Company''s functional currency on the date of transition to Ind ASs, it has elected to continue with the carrying value for all of its property, plant and equipment and intangible assets as recognized in the financial statements as at the date of transition to Ind ASs, measured as per the previous GAAP and use that as its deemed cost as at the date of transition.

(c) Investment in subsidiary

The Company has elected to continue with the carrying values of its investments in subsidiaries as at 31 March 2015 as deemed cost at the date of transition. Investment in subsidiaries have been carried in the statement of financial position in accordance with previous GAAP as of 31 March 2016.

Estimates

The estimates at 1 April 2016 and at 31 March 2017 are consistent with those made for the same dates in accordance with previous GAAP (after adjustments to reflect any differences in accounting policies) apart from the following items where application of Indian GAAP did not require estimation:

- Impairment of financial assets based on expected credit loss model.

The estimates used by the Company to present these amounts in accordance with Ind AS reflect conditions at 1 April 2016, the date of transition to Ind AS and as of 31 March 2017.


Mar 31, 2017

1. Rights, restrictions and preferences attached to each class of Share

The Company has two class of Shares i.e. Equity and Preference having a par value of Rs. 10/- each. Each holder of Equity Shares is entitled to one vote per share. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting. The distribution will be in proportion to the number of Equity Shares held by the Shareholders.

Subject to the provisions of the Investment Agreement entered into between the Company, its subsidiary Aria Hotels & Consultancy Services Private Limited( Aria) & the investors ( IL&FS Group), statutory and other approvals, if any, the Company and the Aria had to provide the IL&FS Group the exit option after March 31, 2013 by way of merger of the Company with Aria or swap of investors’ securities with the equity shares of the Company or otherwise, not exceeding 14% of the paid up equity of the Company, on fully diluted basis.

During the last five years, the Company has not issued any bonus shares nor are there any shares bought back and issued for consideration other than cash.

Kotak Mahindra Prime Limited -Vehicle Loan

The above facility is secured by hypothecation of vehicles repayable up to March, 2019 in equal monthly installments .

Yes Bank-Vehicle Loan

The above facility is secured by hypothecation of vehicles repayable up to October, 2021 in equal monthly installments .

$ Unsecured Loan :

As per the sanction letter of term loan given by Kotak Mahindra Bank Limited, Mr. Sushil Kumar Gupta (Promoter) has infused subordinated interest free unsecured loan repayable after the term loans from the bank have been fully repaid.

2. Company had received refund of Rs. 55.56 lacs out of Rs. 95.94 lacs towards the amount paid under protest for the Service Tax demand raised in earlier years. The petition is already filed with Tribunal Authorities for refund of remaining amount and hence been included under “Loans and Advances”(Note 14) as “Claims Recoverable”. On February 9, 2016 Asst. Commissioner of Refund has rejected company refund claims on ground of unjust enrichment and does not prove that burden of tax paid was not passed to the customer directly or by way of increase in the cost of services . Company has filed Appeal with Commissioner of Appeal contesting department claims. The differential amount of Rs 40.38 lacs has been disclosed as contingent liability.

3. The Company had received property tax demand of Rs. 571.13 lacs (previous year 569.18 lacs) from Mumbai Municipal Corporate (“MMC”) based on capital value system which is retrospectively from April 01, 2010, out of which, we have already booked and paid Rs. 302.63 lacs (previous year 302.63 lacs) in our books of accounts pertaining from Financial Year 2010-11 to 2014-15. Hotels & Restaurant Association (Maharashtra) has filed a writ application in the High Court of Bombay against the new capital value system. Hon’ble High Court has passed an interim Order on February 24, 2014 directing all petitioners to pay municipal property tax at promenaded rates plus 50% of the differential tax between ratable value system and capital value system. Final decision of Hon’ble High Court is pending. Meanwhile company has made provision as per Interim High Court Order for the demand raised by MMC in the financial statements.

4. Pursuant to the Scheme of Arrangement & Demerger, Hyatt Regency, Mumbai was transferred to and vested in the Company. The Company had applied to the concerned authority for adjudication of stamp duty applicable on conveyance of the property title in favour of the Company, which was adjudicated to Rs 1157 lacs vide order dated 31st May’2016 passed by Collector of Stamps, Mumbai City and subsequently the Company has made the said payment on 20th July’2016.The property title has been transferred in favour of the company.

5. As the company is engaged in only one segment of Hotel business, the disclosure requirements of Accounting Standard (AS-17) on “Segment Reporting” are not applicable.

6. Future commitments in respect of minimum lease payments payable for non-cancellable operating license (other than land) entered into by the Company:

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

8. Defined contribution plans a. Provident fund

9. Defined benefits plans

10. Contribution to Gratuity fund

11. Compensated absences - Earned leave

In accordance with Accounting Standard 15, 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 are 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 8 % 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 taken into account. Again a long- term view as to the trend in salary increase rates is taken rather than be guided by the escalation rates experienced in the immediate past, if they have been influenced by unusual factors.

12. 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.

13. The estimates of future salary increases considered take into account the inflation, seniority, promotion and other relevant factors.

14. The gratuity plan and earned leave are un funded.

Demographic assumptions:

15. Retirement age 58 years

16. Mortality rate Published rates under LIC (1994-96) mortality table.

17. In accordance with the Accounting Standard on “Related Party Disclosures” (AS-18)& Companies Act 2013, the disclosures in respect of Related Parties and transactions with them, as identified and certified by the management, are as follows: -

18. List of related parties

19. Subsidiary Company

-Aria Hotels and Consultancy Services Private Limited

20. Key Management Personnel

-Mr. Sushil Kumar Gupta (Chairman & Managing Director)

-Mr. Sudhir Chamanlal Gupta (Executive Whole -Time Director)

-Mr. Sandeep Gupta (Executive Whole -Time Director)

-Mr.Rakesh Kumar Aggarwal(Chief Financial Officer)

-Mr. Vivek Jain(Company Secretary wef.14-11-2015)

-Mr. Nikhil Sethi ( Company Secretary) (till12-09-2015)

21. Relative of Key Management Personnel

-Ms.Sukriti Gupta (Daughter of Executive Whole-Time Director)

-Mr. Sidharth Aggarwal(Son of Chief Financial Officer)

22. Entities over which Directors and their relatives can exercise significant influence

-Eden Park Hotels Private Limited

-Bhasin& Co.

-Mettel Estates Private Limited

-Godfrey Philips India Limited

23. In April 2016, the company has taken a short term unsecured loan from related party, Mettel Estates Private Ltd of Rs 10000.00 Lacs, which has been utilized for repaying Kotak Bank Term loan.

In April 2016, the Company has entered into facility arrangement with Yes Bank Limited (YBL) for its entire banking and borrowing facilities. The Company was sanctioned borrowing facilities aggregating to Rs 21500.00 Lacs from the YBL (Term Loan of Rs 20000.00 Lacs, Overdraft Facility of Rs 1000.00 Lacs and Non-fund LC/ BG facility of Rs 500.00 Lacs). Term Loan shall be repayable in 44 structured quarterly installments after 36 months of moratorium period.

24. There are no present obligations requiring provisions in accordance with the guiding principles as enunciated in Accounting Standard 29 on “Provisions, Contingent Liabilities & Contingent Asset”.

25. During the year, the provisions of section 135(5) of Companies Act, 2013 doesn’t apply on the Company. However, during the year the Company has spent Rs. 5 Lacs on CSR activities out of the un-spent amount of previous year’s (amounting to Rs. 10.70 Lacs) as per the CSR policy of the Company.

26. The Company has not recognized any loss on impairment in respect of assets of the Company as is required in terms of Accounting Standard 28 on “Impairment of Assets” since in the opinion of the Management, the reduction in value of any asset, to the extent required, has already been provided for in the books.

27. In the opinion of Board, current assets, loans and advances have a value on realization in the ordinary course of business at least equal to the amount at which they stated and provision for all known liabilities has been made and considered adequate.

28. Previous year figures have been regrouped / rearranged wherever considered necessary to make them comparable with current year’s figures.


Mar 31, 2016

b. Rights, restrictions and preferences attached to each class of Share

"The Company has two class of Shares i.e Equity and Preference having a par value of Rs. 10/- each. Each holder of Equity Shares is entitled to one vote per share. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting. The distribution will be in proportion to the number of Equity Shares held by the Shareholders. Subject to the provisions of the Investment Agreement entered into between the Company, its subsidiary & the investors ( IL&FS Group), statutory and other approvals, if any, the Company and the subsidiary company - M/s Aria Hotels & Consultancy Services Private Limited( Aria) had to provide the investors ( IL&FS Group) the exit option after March 31, 2013 by way of merger of the company with Aria or swap of investors’ securities with the equity shares of AHWL or otherwise, not exceeding 14% of the paid up equity of the Company, on fully diluted basis, which is under discussion with the investor."

During the last five years, the company has not issued any bonus shares nor are there any shares bought back and issued for consideration other than cash.

The Board of Directors have proposed a Dividend 10 % (Previous Year 10% ) i.e. dividend of Rs. 1 /- per equity share (Previous Year Rs. 1.00/- per share) subject to approval of the shareholders at the ensuring Annual General Meeting.

$ Unsecured Loan :

As per the sanction letter of term loan given by Kotak Mahindra Bank Limited, Mr. Sushil Kumar Gupta (Promoter) has infused subordinated interest free unsecured loan repayable after the term loans from the bank have been fully repaid.

1. Pursuant to the Scheme of Arrangement & Demerger, Hyatt Regency, Mumbai was transferred to and vested in the Company. The Company has applied to the concerned authority for adjudication of stamp duty applicable on conveyance of the property title in favour of the Company, which has not been ascertained. Maximum liability which could be levied is estimated at Rs. 1500 Lacs.

2. Company has received refund of Rs. 55.56 lacs out of Rs. 95.94 lacs towards the amount paid under protest for the Service Tax demand raised in earlier years. The petition is already filed with Tribunal Authorities for refund of remaining amount and hence been included under “Loans and Advances” as “Claims Recoverable”. On February 9, 2016 Asst. Commissioner of Refund has rejected company refund claims on ground of unjust enrichment and does not prove that burden of tax paid was not passed to the customer directly or by way of increase in the cost of services . Company has filed Appeal with Commissioner of Appeal contesting department claims.

3. The Company has received property tax demand of Rs. 569.18 lacs from Mumbai Municipal Corporate (“MMC”) based on capital value system which is retrospectively from April 01, 2010, out of which, we have already booked and paid Rs. 302.63 lacs in our books of accounts pertaining from Financial Year 2010-11 to 2014-15. Hotels & Restaurant Association (Maharashtra) has filed a writ application in the High Court of Bombay against the new capital value system.

Hon’ble High Court has passed an interim Order on February 24, 2014 directing all petitioners to pay municipal property tax at preamended rates plus 50% of the differential tax between rateable value system and capital value system. Final decision of Hon’ble High Court is pending. Meanwhile company has made provision as per Interim High Court Order for the demand raised by MMC in the financial statements.

4. As the company is engaged in only one segment of Hotel business, the disclosure requirements of Accounting Standard (AS-17) on “Segment Reporting” are not applicable.

5. Future commitments in respect of minimum lease payments payable for non-cancellable operating license (other than land) entered into by the Company:

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

1. Defined contribution plans

a. Provident fund

2. Defined benefits plans

a. Contribution to Gratuity fund

b. Compensated absences - Earned leave

In accordance with Accounting Standard 15, 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 are 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 8 % 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 taken into account. Again a long- term view as to the trend in salary increase rates is 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 future salary increases considered take into account the inflation, seniority, promotion and other relevant factors.

3. The gratuity plan and earned leave are unfunded.

7. In April 2016, the company has taken a short term unsecured loan from related party, Mettel Estates Private Ltd of Rs 10000.00 Lacs, Which has been utilized for repaying Kotak Bank Term loan.

In April 2016, the Company has entered into facility arrangement with Yes Bank Limited (YBL) for its entire banking and borrowing facilities. The Company was sanctioned borrowing facilities aggregating to Rs 21500.00 Lacs from the YBL (Term Loan of Rs 20000.00 Lacs, Overdraft Facility of Rs 1000.00 Lacs and Non-fund LC/ BG facility of Rs 500.00 Lacs). Term Loan shall be repayable in 44 structured quarterly installments after 36 months of moratorium period.

8. There are no present obligations requiring provisions in accordance with the guiding principles as enunciated in Accounting Standard 29 on “Provisions, Contingent Liabilities & Contingent Asset”.

9. The Company has not recognized any loss on impairment in respect of assets of the Company as is required in terms of Accounting Standard 28 on “Impairment of Assets” since in the opinion of the Management, the reduction in value of any asset, to the extent required, has already been provided for in the books.

10. In the opinion of Board, current assets, loans and advances have a value on realization in the ordinary course of business at least equal to the amount at which they stated and provision for all known liabilities has been made and considered adequate.

11. During the year, the budget outlay of Rs. 23.07 Lacs (Rs. 11.65 Lacs for current financial year 2015-16 and Rs. 11.42 Lacs unspent amount for the last financial year 2014-15) has been approved by the Board of Directors. As per the programme, the Company has started implementation of CSR activities. However, during the year it was considered pragmatic to spend Rs. 12.37 lacs.

12. Previous year figures have been regrouped / rearranged wherever considered necessary to make them comparable with current year’s figures.


Mar 31, 2015

A. Rights, restrictions and preferences attached to each class of Share

The Company has two class of Shares i.e Equity and Preference having a par value of Rs. 10/- each. Each holder of Equity Shares is entitled to one vote per share. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting. The distribution will be in proportion to the number of Equity Shares held by the Shareholders. Subject to the provisions of the Investment into between the Company, Its subsidiary & the investors (IL&FS Group), statutory and other approval, if any, the Company and the subsidiary Company - M/s Aria Hotels and Consultancy Services Private Limited (Aria) had to provide the investors (IL&FS Group) the exit option after March 31st, 2013 by way or merger of the Company with Aria or swap of investors' securities with the equity shares of AHWL or otherwise, not exceeding 14 % of the paid up equity of the Company, on fully diluted basis, which is under discussion with the investors

B. During the last five years, the Company has not issued any bonus shares nor are there any shares bought back and issued for consideration other then cash.

Nature of Security and Terms of Repayment Debentures

# 1,000 rated, taxable, secured, redeemable, non-convertible debentures (NCD) of Rs.10 each aggregating to Rs.10,000 lacs were issued to Kotak Mahindra Bank Limited on private placement basis on June 25, 2010. M/s IDBI Trusteeship Services Limited, Mumbai was appointed as the Debenture Trustee to the aforesaid NCD's. The rate of interest on these NCDs has been linked to Kotak Mahindra Banks Prime lending Rate (PLR) less 5% p.a. The outstanding balance of Rs. NIL as on March 31,2015 (Previous year 4,525 lacs). These NCDs were redeemed on June 25, 2014 in terms of Kotak Mahindra Bank Letter dated June 10, 2014 exercising the put/call option as per terms of issue.

** During the Last Year, the Company was sanctioned additional borrowing facilities aggregating to Rs. 3500.00 Lacs from the Kotak Mahindra Prime Limited which was fully availed as on 31st March, 2015 repayable by way of 50 unequal quarterly installments starting from January, 2015 ranging from Rs.50.00 Lacs to Rs. 70.83 Lacs.

The above facilities are inter alia secured by first pari passu charge on all existing and future current assets, moveable fixed assets and immoveable properties being land & building of Hotel Hyatt Regency, Mumbai and by Personal Guarantee of Mr. Sushil Kumar Gupta, Chairman and Managing Director.

$ Unsecured Loan :

As per the Sanction letter of Term Loan given by Kotak Mahindra Bank Limited, Mr. Sushil Kumar Gupta (Promoter) has infused suborinated interest free unsecured loan repayable after the term loans from the bank have been fully repaid.

2. Contingent Liabilities not provided for in respect of:

(Rs. in Lacs) S .Particulars Amount As At Amount As At No. March 31, 2015 March 31, 2014

i. Duty Saved against Export obligation 146.62 712.19

ii. Corporate Guarantees on behalf of Subsidiaries 2834.79 2834.79

iii. Show cause Notices raised by Service Tax Authorities and contested by the company. 512.00 512.00

iv. Property Tax Demand ( Refer Note 31 ) 494.23 374.09

3. Pursuant to the Scheme of Arrangement & Demerger, Hyatt Regency, Mumbai was transferred to and vested in the Company. The Company has applied to the concerned authority for adjudication of stamp duty applicable on conveyance of the property title in favour of the Company, which has not been ascertained. Maximum liability which could be levied is estimated at Rs. 1500 Lacs.

4. In terms of requirement of Clause 1(C) of Section II of Part II of Schedule XIII to the Companies Act, 1956 the Company has obtained approval dated 6th September, 2013 from Ministry of Corporate Affair under section 198, 309(3), 310 r/w Section 637A & 367AA of the Companies Act'1956 for payment of remuneration to the Managerial Personnel in the absence of adequate profits. The same for the year has been accounted for in terms of the approval. Further Mr. Sushil Gupta, Chairman & Managing Director of the company is being paid remuneration effective from 1st November in terms of Special Resolution passed by the company.

5. Company has received refund of Rs. 55.56 lacs out of Rs. 95.94 lacs towards the amount paid under protest for the Service Tax demand raised in earlier years. The petition is already filed with Tribunal Authorities for refund of remaining amount and hence been included under "Loans and Advances" as "Balance with Statutory Authorities". The Matter was being heard on April 15, 2015. The case has been decided in company favour for refund of the balance amount.

6. During the year, Aria Hotels and Consultancy Services Private Limited, the subsidiary company has issued 96,33,333 Optionally Convertible Preference Shares of the face value of Rs. 10 each at a premium of Rs. 20 each on June 27, 2014 to the Company, which has been presented under non-current investments.

7. The Company has received property tax demand of Rs. 569.18 lacs from Mumbai Municipal Corporate ("MMC") based on capital value system which is retrospectively from April 01,2010, out of which, the Company has already booked and paid Rs 302.63 lacs in books of accounts pertaining to the period financial year 2010-11 to financial year 2014-15. Hotels & Restaurant Association (Maharashtra) has filed a writ application in the High Court of Bombay against the new capital value system. Hon'ble High Court has passed an interim Order on February 24, 2014 directing all petitioners to pay municipal property tax at preamended rates plus 50% of the differential tax between rateable value system and capital value system. Final decision of Hon'ble High Court is pending. Meanwhile company has made provision as per interim High Court Order for the demand raised by MMC in the financial statements.

8. As the company is engaged in only one segment of Hotel business, the disclosure requirements of Accounting Standard (AS-17) on "Segment Reporting" are not applicable.

9. Future commitments in respect of minimum lease payments payable for non cancellable operating license (other than land) entered into by the Company:

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

1. Defined contribution plans a. Provident fund

2. Defined benefits plans

a. Contribution to Gratuity fund

b. Compensated absences - Earned leave

In accordance with Accounting Standard 15, 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 are 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 8 % 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 taken into account. Again a long- term view as to the trend in salary increase rates is taken rather than be guided by the escalation rates experienced in the immediate past, if they have been influenced by unusual factors.

11. Dividend

The Board of Directors have proposed a Dividend 10% (Previous Year 15% ) i.e. dividend of Rs. 1 /- per equity share (Previous Year Rs. 1.5/- per share) subject to approval of the shareholders at the ensuing Annual General Meeting.

12. There are no present obligations requiring provisions in accordance with the guiding principles as enunciated in Accounting Standard 29 on "Provisions, Contingent Liabilities & Contingent Asset".

13. The Company has not recognized any loss on impairment in respect of assets of the Company as is required in terms of Accounting Standard 28 on "Impairment of Assets" since in the opinion of the Management, the reduction in value of any asset, to the extent required, has already been provided for in the books.

14. During the year, the Company has incurred an amount of Rs. 14.85 lacs towards Corporate Social Responsibility expenditure. Amount of Rs. 11.42 has remained unspent at the close of the year to be spent in future.

15. Due to adoption of depreciation rates on the basis of useful life as prescribed under Schedule II of the Companies Act'2013, depreciation charged for the year is higher by Rs 477 lakhs as compared to the depreciation rates charged during previous year. Further, written down value of fixed assets whose lives have expired as at 1st April, 2014 amounting to Rs. 2.53 lakhs have been adjusted from the retained earnings in accordance with provisions of Schedule II to the Companies Act, 2013.

16. Previous year figures have been regrouped / rearranged wherever considered necessary to make them comparable with current year's figures.


Mar 31, 2014

Debentures

# 1,000 rated, taxable, secured, redeemable, non-convertible debentures (NCD) of Rs.10 lacs each aggregating to Rs.10,000 lacs were issued to Kotak Mahindra Bank Limited on private placement basis on June 25, 2010. M/s IDBI Trusteeship Services Limited, Mumbai was appointed as the Debenture Trustee to the aforesaid NCD''s. The rate of interest on these NCDs has been linked to Kotak Mahindra Banks Prime lending Rate (PLR) less 5% p.a. The outstanding balance of Rs. 4,525 lacs as on March 31,2014 (Previous year 6,325 lacs) is secured by way of first pari passu charge on all existing and future moveable fixed assets and immoveable properties being land & building of Hotel Hyatt Regency, Mumbai and by Personal Guarantee of Mr. Sushil Kumar Gupta, Chairman and Managing Director. The outstanding balance as on March 31, 2014 is repayable in 8 unequal quarterly installments ranging from Rs. 475 lacs to Rs. 660 lacs.

Term Loans

* The outstanding balance of Rs. 1,800 lacs as on March 31,2014 (Previous year 2,800 lacs) out of sanctioned loan of Rs. 4,500 lacs is secured by way of first pari passu charge on all existing and future moveable fixed assets and immoveable properties being land & building of Hotel Hyatt Regency, Mumbai and by Personal Guarantee of Mr. Sushil Kumar Gupta, Chairman and Managing Director. The outstanding balance as on March 31, 2014 is repayable in 8 unequal quarterly installments ranging from Rs. 175 lacs to Rs. 275 lacs.

* The Company has availed loan of Rs. 3,983.84 Lacs ( Previous Year Rs. 3,384.97 lacs ) against sanctioned limit of Rs.4,000 Lacs. It is repayable in 24 unequal quaterly installments starting from Sep.2014 ranging from Rs. 21.15 Lacs to Rs. 200.98 Lacs.

* During the year, the Company was sanctioned additional borrowing facilities aggregating to Rs. 3500.00 Lacs from the Kotak Mahindra Prime Limited out of which Company has availed Rs. 3500.00 lacs as on 31st March, 2014 repayable by way of 50 unequal quarterly installments starting from Jan. 2015 ranging from Rs.50.00 Lacs to Rs. 70.83 Lacs.

The above facilities are inter alia secured by first pari passu charge on all existing and future moveable fixed assets and immoveable properties being land & building of Hotel Hyatt Regency, Mumbai and by Personal Guarantee of Mr. Sushil Kumar Gupta, Chairman and Managing Director.

** The outstanding balance of Rs. 164.39 lacs as on March 31, 2014 (Previous year 232.44 lacs) from bank/corporate body against Vehicle / Equipment loans are secured by hypothecation of vehicles and equipments. The outstanding balance as on March 31, 2014 is repayable upto January, 2019 on monthly installments ranging from Rs.0.46 lacs to Rs. 1.07 lacs.

1. Contingent Liabilities not provided for in respect of:

(Rs. in Lacs)

S. No. Particulars Amount As At Amount As At March 31, 2014 March 31, 2013

i. Duty Saved against Export obligation 712.19 712.19

ii. Corporate Guarantees on behalf of Subsidiaries 2834.79 6,629.28

iii.Show cause Notices raised by Service Tax Authorities and contested by the 512.00 512.00 company.

iv. Property Tax Demand ( Refer Note 33 ) 374.09 -

2. Pursuant to the Scheme of Arrangement & Demerger, Hyatt Regency, Mumbai was transferred to and vested in the Company. The Company has applied to the concerned authority for adjudication of stamp duty applicable on conveyance of the property title in favour of the Company, which has not been ascertained. Maximum liability which could be levied is estimated at Rs. 1500 lacs.

3. During the year, in terms of requirement of Clause 1(C) of Section II of Part II of Schedule XIII to the Companies Act, 1956 the Company has obtained approval dated 6th September, 2013 from Ministry of Corporate Affair under section 198, 309(3), 310 r/w Section 637A & 367AA of the Companies Act''1956 for payment of remuneration to the Managerial Personnel in the absence of adequate profits. The same for the year has been accounted for in terms of the approval.

4. Company has received refund of Rs. 55.56 lacs out of Rs. 95.94 lacs towards the amount paid under protest for the Service Tax demand raised in earlier years. The petition is already filed with Tribunal Authorities and hence been included under "Loans and Advances" as Claims Recoverable based on the progress made in the matter so far. Further Company has received notice dated December 10, 2012 (Appeals)-IV Central Excise , Mumbai Zone-I against refund order of Rs.55.56 lacs passed by Assistant Commissioner of Service Tax Div-III Mumbai and directed to file cross objections to prove that burden of tax has been borne by the claimant & not passed on.

5. During the year, Aria Hotels and Consultancy Services Private Limited, the subsidiary company has issued 14,500,000 Optionally Convertible Preference Shares of the face value of Rs. 10 each at a premium of Rs. 20 each on March 31, 2014 to the Company, which has been presented under non-current investments.

6. During the year, Company has transferred 9,998,186 equity shares of face value of Rs 10 each and 1,344,408 Optionally Cumulative Convertible Preference shares of face value of Rs 10 each of Inovoa Hotels & Consultancy Services Pvt Limited, subsidiary company, held as non-current investment, to Fleur Hotels (P) Limited for consideration of Rs. 89,119,387/- & Rs. 29,056,451/- respectively resulting in loss of Rs. 85,990,854 which has been disclosed as exceptional item in the Statement of Profit & Loss.

7. The Company has entered into agreement with a party on April 03, 2014 for sub-license vide agreement dated April 03, 2014 of commercial space admeasuring an aggregate super built area area of 3,329 Sq. feet at Commercial Tower, J. W. Marriott Hotel, New Delhi Aerocity, New Delhi which the Company had acquired vide sub license agreement dated September 18, 2012 with Aria Hotels and Consultancy Services Private Limited ("Aria"). All rights, duties, interest and liabilities of the Company in respect of above space stands subrogated in favour of the party w.e.f. April 03, 2014. Difference between the amount of security deposit paid earlier to the licensor and that receivable from the party resulting in loss of Rs.33.29 lacs has been accounted for during the year as provision for diminution in value.

8. During the year, the Company has received property tax demand of Rs. 449.04 lacs from Mumbai Municipal Corporation ("MMC") based on capital value system which is effective from April 01, 2010 retrospectively, out of which, we have already booked and paid Rs. 74.95 lacs in our books of account pertaining to Financial Year 2010-11. Hotels & Restaurant Association (Maharashtra) has filed a writ application in the Hight Court of Bombay against the new capital value system.

Hon''ble High Court has passed an interim Order on February 24, 2014 directing all petitioners to pay municipal property tax at pre-amended rates plus 50% of the differential tax between rateable value system and capital value system. Final decision of Hon''ble High Court is pending. Meanwhile the Company has not made any provision for the demand raised by MMC in the financial statements.

9. As the company is engaged in only one segment of Hotel business, the disclosure requirements of Accounting Standard (AS-17) on "Segment Reporting" are not applicable.

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

1. Defined contribution plans

a. Provident fund

2. Defined benefits plans

a. Contribution to Gratuity fund

b. Compensated absences - Earned leave

In accordance with Accounting Standard 15, 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 are 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 8 % 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 taken into account. Again a long- term view as to the trend in salary increase rates is taken rather than be guided by the escalation rates experienced in the immediate past, if they have been influenced by unusual factors.

11. In accordance with the Accounting Standard on " Related Party Disclosures" (AS-18), the disclosures in respect of Related Parties and transactions with them, as identified and certified by the management, are as follows: -

a. List of related parties

(i) Subsidiary Company

* Aria Hotels and Consultancy Services Private Limited

* Inovoa Hotels & Resorts Limited (up to 4th July, 2013)

(ii) Key Management Personnel

* Mr. Sushil Kumar Gupta (Chairman & Managing Director)

* Mr. Sudhir Chamanlal Gupta - Executive (Whole-Time) Director

* Mr. Sandeep Gupta - Executive (Whole-Time) Director

(iii) Relative of Key Management Personnel

* Mrs. Vinita Gupta (Wife of Mr. Sushil Kumar Gupta, Chairman & Managing Director)

* Ms. Sukriti Gupta (Daughter of Mr. Sudhir Chamanlal Gupta, Executive (Whole-Time) Director)

(iv) Entities over which Directors and their relatives can exercise significant influence

* Eden Park Hotels Private Limited

* M/s Bhasin & Co.

* M/s Chaman Lal S. Gupta

* Godfrey Philips India Ltd

12. Dividend

The Board of Directors have proposed a Dividend of 15% (Previous Year 20% ) i.e. dividend of Rs. 1.50 /- per equity share (Previous Year Rs. 2/- per share) subject to approval of the shareholders at the ensuing Annual General Meeting.


Mar 31, 2013

1. Contingent Liabilities not provided for in respect of:

(Rs. in lacs)

S. No. Particulars Amount As At Amount As At March 31, 2013 March 31, 2012

i. Duty Saved against Export obligation 712.19 353.93

ii. Corporate Guarantees on behalf of Subsidiaries 6,629.28 5,763.72

iii. Demand raised by Service Tax Authorities and contested by the company. 512.00 61.49

2. Pursuant to the Scheme of Arrangement & Demerger, Hyatt Regency, Mumbai was transferred to and vested in the Company. The Company has applied to the concerned authority for adjudication of stamp duty applicable on conveyance of the property title in favour of the Company, which has not been ascertained. Maximum liability which could be levied is estimated at Rs. 1500 lacs.

3. Capital and other Commitments :

(Rs. in lacs)

Particulars 2012-13 2011-12

Estimated amount of contracts remaining to be executed on capital account and not provided 59.34 1.04 for (net of advances)

Other Commitments 148.39 -

4. During the fnancial year, in terms of requirement of Clause 1(C) of Section II of Part II of Schedule XIII to the Companies Act, 1956 the Company has obtained shareholders approval, by way of Postal Ballot, for payment of remuneration to the Managerial Personnel in the absence of adequate profts. Subsequent thereto, the Company has made application(s) with the Central Government for its approval, which is still awaited.

5. Company has received refund of Rs. 55.56 lacs out of Rs. 95.94 lacs towards the amount paid under protest for the Service Tax demand raised in earlier years. The petition is already fled with Tribunal Authorities and hence been included under "Loans and Advances" as "Claims Recoverable" based on the progress made in the matter so far. Further Company has received notice dated December 10, 2012 (Appeals)-IV Central Excise , Mumbai Zone-I against refund order of Rs.55.56 lacs passed by Assistant Commissioner of Service Tax Div-III Mumbai and directed to fle cross objections to prove that burden of tax has been borne by the claimant & not passed on.

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 28 on "Impairment of Assets" since in the opinion of the Management, the reduction in value of any asset, to the extent required, has already been provided for in the books.

7. During the current fnancial year, the Company has acquired commercial space aggregating to 18,784 Sq. feet. at Commercial Tower, J. W. Marriott Hotel, New Delhi from Aria Hotels and Consultancy Services Private Limited, subsidiary company on Long Term License basis at an aggregate interest free refundable security deposit aggregating to Rs. 3,926.00 Lacs which has been presented under Long Term Loans and Advances.

8. As the company is engaged in only one segment of Hotel business, the disclosure requirements of Accounting Standard (AS-17) on "Segment Reporting" are not applicable.

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

1. Defned contribution plans

a. Provident fund

2. Defned benefts plans

a. Contribution to Gratuity fund

b. Compensated absences – Earned leave

In accordance with Accounting Standard 15, actuarial valuation was done in respect of the aforesaid defned plans based on the following assumptions: -

Economic Assumptions

The discount rate and salary increases assumed are key fnancial assumptions and are 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 8 % p.a. compound, has been used.

Salary Escalation Rate

The salary escalation rate usually consists of at least three components, viz. Regular increments, price infation 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 taken into account. Again a long- term view as to the trend in salary increase rates is taken rather than be guided by the escalation rates experienced in the immediate past, if they have been infuenced by unusual factors.

a. The following tables set out the unfunded status of the gratuity plan and earned leaves and amounts recognized in the Company''s fnancial statements as at March 31, 2013

10. In accordance with the Accounting Standard on " Related Party Disclosures" (AS-18), the disclosures in respect of Related Parties and transactions with them, as identifed and certifed by the management, are as follows: -

a. List of related parties

(i) Subsidiary Company

- Aria Hotels and Consultancy Services Private Limited

- Inovoa Hotels & Resorts Limited (with effect from May 28, 2011)

(ii) Key Management Personnel

- Mr. Sushil Gupta - Chairman & Managing Director

- Mr. Sudhir Gupta Executive (Whole-Time) Director

- Mr. Sandeep Gupta - Executive (Whole-Time) Director

(iii) Entities over which Directors and their relatives can exercise signifcant infuence

- Eden Park Hotels Private Limited

- M/s Bhasin & Co.

- Aria Investments & Holdings Limited

11. Previous year fgures have been regrouped / rearranged wherever considered necessary to make them comparable with current year''s fgures.


Mar 31, 2012

A Rights, restrictions and preferences attached to each class of Shares

The Authorised Share Capital of the Company comprise of equity shares and preference share having a par value of Rs. 10/- each. Each holder of Equity Shares is entitled to one vote per share. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, after distribution of all preferential amounts. The distribution will be in proportion to the number of Equity Shares held by the Shareholders.

The Preference Shares were 1% Non-Cumulative Fully Convertible Shares of Rs. 10/- each. They Carry a non-cumulative dividend of 1% p.a. Each Holder of Preference shares was entitled to preferential dividend and preferential distribution on liquidation of the Company. These shares carry no voting rights except for one vote per share only on resolutions placed before the Company which directly affect their rights. These shares were converted into equity shares at the conversion price as calculated in terms of the mechanism provided in the Scheme of Arrangement and Demerger and the pricing formula as provided in the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009. During the year these shares were converted into 56,521 equity shares of Rs. 10 each at a premium of Rs. 255.40 each.

NOTES FORMING PART OF THE FINANCIAL STATEMENTS

1. Contingent Liabilities not provided for in respect of:

(Rs. in Lacs)

S. No. Particulars Amount As At Amount As At 31st March, 2012 31st March, 2011

i. Export obligation in respect of EPCG Licenses 2,831.47 2,831.47

ii. Corporate Gurantees on behalf of Subsidiaries 5,763.72 1.59

iii. Demand raised by Service Tax Authorities and contested by the company. 61.49 61.49

2. Pursuant to the Scheme of Arrangement & Demerger, Hyatt Regency, Mumbai was transferred to and vested in the Company. The Company has applied to the concerned authority for adjudication of stamp duty applicable on conveyance of the property title in favour of the Company, which has not been ascertained. Maximum liability which could be levied is estimated at Rs. 1500 lacs.

3. Land-Freehold includes Land admeasuring approx. 4600 Sq. Mtrs, at Pune, Maharashtra. During the year, the Company entered into MOU for sale of the aforesaid land at a consideration of Rs. 890 Lacs. Necessary procedural formalities to consumate the transaction are being complied with.

4. Out of Rs. 95.94 lacs paid under protest in respect of Service Tax demand raised by the Department in earlier years, Rs. 40.38 lacs is still outstanding. In the opinion of the management, the above Rs. 40.38 lacs is recoverable for which the petition is filed with Tribunal Authorities and hence been included under "Loans and Advances" as "Claims Recoverable" based on the progress made in the matter so far.

5. The Company has not recognised any loss on impairment in respect of assets of the Company as is required in terms of Accounting Standard 28 on "Impairment of Assets" since in the opinion of the Management, the reduction in value of any asset, to the extent required, has already been provided for in the books.

6. During the year, Aria Hotels and Consultancy Services Private Limited, subsidiary company has issued 38,61,538 Compulsory Convertible Preference Shares of the face value of Rs. 10 each at a premium of Rs. 16 each on 30th April, 2011 to the Company, which has been presented under non-current investments.

7. As the company is engaged in only one segment of Hotel business, the disclosure requirements of Accounting Standard (AS-17) on "Segment Reporting" are not applicable.

8. Future commitments in respect of minimum lease payments payable for non cancellable operating leases (other than land) entered into by the Company:

In accordance with Accounting Standard 15, 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 are 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 8 % 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 taken into account. Again a long- term view as to the trend in salary increase rates is taken rather than be guided by the escalation rates experienced in the immediate past, if they have been influenced by unusual factors.

a. The following tables set out the unfunded status of the gratuity plan and earned leaves and amounts recognised in the Company's financial statements as at 31st March, 2012

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 future salary increases considered take into account the inflation, seniority, promotion and other relevant factors.

3. The gratuity plan and earned leave are unfunded.

Demographic assumptions:

a. Retirement age 58 years

b. Mortality rate Published rates under LIC (1994-96) mortality table.

9. In accordance with the Accounting Standard on " Related Party Disclosures" (AS-18), the disclosures in respect of Related Parties and transactions with them, as identified and certified by the management, are as follows: -

a. List of related parties

(i) Subsidiary Company

- Aria Hotels and Consultancy Services Private Limited

- Inovoa Hotels & Resorts Limited (with effect from May 27, 2011)

(ii) Associate Company

- Inovoa Hotels & Resorts Limited (upto May 27, 2011)

(iii) Key Management Personnel

- Mr. Sushil Gupta - Chairman & Managing Director

- Mr. Sudhir Gupta - Executive (Whole time) Director

- Mr. Sandeep Gupta - Executive (Whole time) Director

(iv) Relatives of Key Management Personnel

- Mrs. Vinita Gupta

- Mrs. Gunjan Jain

(v) Entities over which Directors and their relatives can exercise significant influence

- Eden Park Hotels Private Limited

- M/s Bhasin & Co.

- Aria Investments & Holdings Limited

- M/s Chaman Lal Gupta & Sons

10. During the year under review, the Company acquired Controlling Stake in Inovoa Hotels and Resorts Limited (IHRL) by increasing its stake to 50.495% of the paid up equity capital of IHRL, pursuant to which, IHRL has become Subsidiary of the Company.

11. Dividend

The Board of Directors have proposed a Dividend 40% (Previous Year 40% ) i.e. dividend of Rs. 4/- per equity share (Previous Year Rs. 4/- per equity share) subject to approval of the shareholders at the ensuing Annual General Meeting.

12. Details of dues to Micro, Small and Medium Enterprises as per MSMED Act, 2006 to the extent of information available with the company:

13. The Financial Statements for the year ended 31st March, 2011 had been prepared as per then applicable, pre revised Schedule VI to the Companies Act, 1956. Consequent to the notification of Revised Schedule VI under the Companies Act, 1956, the financial statements for the year ended 31st March,2012 are prepared as per Revised Schedule VI. Accordingly, the previous year figures have also been reclassified to conform to this year's classification. There is no change in the recognition & measurement, however, there are changes in the presentation & disclosures.


Mar 31, 2011

1. Contingent Liabilities not provided for in respect of:

a. Export obligation in respect of EPCG Licenses: Rs. 2,831.47 Lacs (Previous period Rs. 1,172.96 Lacs).

b. Stamp duty for Mumbai Undertaking:Rs1,500.00 Lacs (as estimated by the management) {Previous Year Rs. 1500.00 Lacs}

c. During the year under review, the Company has agreed to grant Corporate Guarantee aggregating to Rs. 4000 Lacs in one or more tranches on behalf of Aria Hotels and Consultancy Services Pvt. Ltd., Subsidiary Company for import of Capital Goods under EPCG. As on 31st March, 2011 the Company has given such Corporate Guarantee aggregating to Rs. 1.59 Lacs (Previous year Rs. Nil).

d. Claims against Company not acknowledged as debts (Service Tax) Rs. 61.49 Lacs (for the F.Y. 2006-07,2007-08 and 2008-09) {Previous Year Rs. Nil}

2. Estimated amount of contracts remaining to be executed on capital account (net of advances): Rs. 103.28 Lacs (Previous period Rs 27.78 Lacs).

3. The Company had earlier re-issued 27,780 1% Fully Convertible Preference Share (FCPS) of the face value of Rs. 10/- each at a premium of Rs. 530/- each to Fineline Holdings Limited and UDT Enterprises Pty. Ltd. credited as fully paid.

In terms of the Scheme of Arrangement & Demerger, the aforesaid FCPS were to be converted into the equity shares of the Company at any time, at the option of the respective FCPS holder, during the period from 5th March, 2011 to 30th April, 2011 and in the event any FCPS holder does not exercise the option to convert the FCPS into equity shares during the aforesaid period, the FCPS held by such FCPS holder would compulsorily get converted into the equity shares of the Company on 30th April, 2011.

The said 27,780 FCPS were converted into 56,521 Equity Shares at the conversion Price of Rs. 265.40 per share as calculated in terms of the mechanism provided in the Scheme and the pricing formula as provided in the SEBI (Issue of Capital and Disclosures Requirements) Regulations, 2009. Consequently, such conversion resulted into issuance of 56,521 equity shares of Rs.10/- each credited as fully paid-up. Consequent to the aforesaid issue and allotment, the paid-up equity capital of the Company has increased from Rs. 11,40,17,820/- comprising of 1,14,01,782 equity shares of Rs.10/-each to Rs. 11,45,83,030/- comprising of 1,14,58,303 equity shares of Rs.10/- each with effect from 30th April, 2011.

With the aforesaid actions, all the procedural formalities consequential to the Scheme of demerger of erstwhile Asian Hotels Limited have been complied with.

4. (i) Land - Freehold includes Land admeasuring approx. 4600 Sq. Mtrs, at Pune, Maharashtra, approved for construction of hotel, purchased by the Company during the year under review.

(ii) Capital Work in Progress includes advances for capital contracts aggregating to Rs. 81.51 Lacs (previous year Rs 31.02 Lacs).

5. The Company has not recognised any loss on impairment in respect of assets of the Company as is required in terms of Accounting Standard 28 on "Impairment of Assets" since in the opinion of the Management, 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 on the basis of the information and explanations given.

6. During the year the Company has received refund of Rs. 55.56 lakhs out of Rs. 95.94 lakhs towards the amount paid under protest for the Service Tax demand raised in earlier years. In the opinion of the management the balance amount of Rs. 40.38 fakhs is recoverable, for which the petition is filed with Tribunal Authorities and hence been included under "Loans and Advances" as "Claims Recoverable" based on the progress made in the matter so far.

7. As the company is engaged in only one segment of Hotel business, the disclosure requirements of Accounting Standard (AS-17) on "Segment Reporting" are not applicable.

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

a) Defined contribution plans i. Provident fund

b) Defined benefits plans

ii. Contribution to Gratuity fund

iii. Compensated absences - Earned leave

In accordance with Accounting Standard 15 (revised 2005), 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 8 % 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 Companys 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 future salary increases considered take into account the inflation, seniority, promotion and other relevant factors.

3. The gratuity plan and earned leave is unfunded. Demographic assumptions:

a. Retirement age 58 years

b. Mortality rate Published rates under LIC (1994-96) mortality table.

11. In accordance with the Accounting Standard on" Related Party Disclosures" (AS-18), the disclosures in respect of Related Parties and transactions with them, as identified and certified by the management, are as follows: -

a. List of related parties

(i) Subsidiary Company

- Aria Hotels and Consultancy Services Pvt. Ltd.

(ii) Associate Company

- Inovoa Hotels & Resorts Limited (with effect from 31st March, 2011)

(iii) Key Management Personnel

-Mr. Sushil Gupta - Chairman & Managing Director

-Mr. Sudhir Gupta - Executive (Whole-time) Director

-Mr. Sandeep Gupta - Executive (Whole-time) Director

(iv) Relative of Key Management Personnel

-Mrs. Vinita Gupta

- Mrs. Gunjan Jain

(v) Entities over which Directors and their relatives can exercise significant influence

- Eden Park Hotels Private Limited Asian Hotels (North) Limited

- M/s Bhasin & Co.

-Aria Investments & Holdings Limited

- M/s Chaman Lai Gupta & Sons

- Godfrey Philips India Ltd.

13. During the year under review, the Company has issued 1,000 Rated, Taxable, Secured, redeemable, Non - Convertible Debentures (NCDs) of the face value of Rs. 10 Lacs each, aggregating to Rs. 10000 Lacs, on private placement basis to Kotak Mahindra Bank Limited on 25th June, 2010. The said NCDs are listed on the Whole-sale Debt Market at the National Stock Exchange of India Limited (NSE) w.e.f. 8th July, 2010. M/s IDBI Trusteeship Services Limited, Mumbai was appointed as the Debenture Trustee to the aforesaid NCDs.

The said NCDs are secured by way of:

a. First pari passu charge on all existing and future moveable fixed assets of Hotel Hyatt Regency, Mumbai belonging to the Company.

b. Mortgage by way of first pari passu charge on the immoveable properties being land and building situated at Hotel Hyatt Regency Mumbai.

c. Personal Guarantee of Chairman and Managing Director of the Company.-

In terms of the issue of the aforesaid NCDs, the Company has already redeemed during the Financial Year 2010-11 NCDs of the face value aggregating to Rs. 675.00 lacs, after creating Debenture Redemption Reserve of Rs. 168.75 lacs.

The Rate of Interest on these NCDs has been linked to Kotak Mahindra Banks Prime Lending Rate (PLR) less 5% p.a.

The redemption of these NCDs shall be made in unequal quarterly installments starting from September, 2010 with last redemption due in March, 2016 on the exercise of Put Option or Call Option.

Put Option - The Debenture Holder may, on or after 25th June, 2015 exercise the Put Option.

Call Option - The Company may exercise the Option to call back the NCDs, at par, (in part or in full) on June 25,2011; June 25,2012; June 25, 2013; June 25, 2014 and June 25, 2015.

14. During the year under review, the Company has availed :

(i) Loan of Rs. 4500 Lacs from Kotak Mahindra Bank Limited by giving security of:

a. First Pari-passu Charge on all existing and future moveable fixed assets of Hotel Hyatt Regency, Mumbai belonging to the Company.

b. Mortgage by way of first pari-passu charge on the immovable properties being land and building situated at Hyatt Regency, Mumbai.

c. Personal Guarantee of Chairman and Managing Director of the Company.

The Company has already partly repaid the above loan upto the extent of Rs. 300 Lacs.

(ii) Loan of Rs. 100 Lacs from Kotak Mahindra Prime Limited for purchase of cars for Hotel Hyatt Regency, Mumbai.

15. During the year under review, the Board of Directors of the Company approved acquisition of Controlling Stake in Inovoa Hotels and Resorts Limited (IHRL). The Company has accordingly acquired 30.18% of the paid up Equity Capital of IHRL till 31st March, 2011, pursuant to which IHRL become the Associate of the Company in terms of Accounting Standard 23. After the Balance Sheet date, the Company has acquired further stake in IHRL aggregating the holding of the Company in IHRL to 50.49% of the paid up equity capital of the Company, pursuant to which, IHRL has become Subsidiary of the Company.

16. Dividend

(i) During the year under review, the Board of Directors of the Company declared interim dividend on the Non Convertible Preference Shares for the Financial Year 2010-11 @ 1 % on pro-rata basis amounting to Rs. 1.24 Lacs.

(ii) 27,780 1% Fully Convertible Preference Shares (FCPS) outstanding on 31st March, 2011 have been converted into the 56,521 Equity Shares of the Company on 30th April, 2011 ranking pari passu in all respect with the existing Equity Shares of the Company. Thus, the Board of Directors of the Company proposes no dividend on these FCPS and the declaration of Final equity dividend, if any, for the Financial Year 2010-11 shall be on the enhanced Equity Share Capital of the Company comprising of 11,458,303 Equity Shares of Rs. 10 each.

18. As the turnover of the Company is in respect of Food and Beverages, it is not possible to give quantity-wise details of the turnover. Vide order No. 46/171/2010-CL-III dated 28th June, 2010 issued by the Ministry of Corporate Affairs, the Company has been exempted from giving these particulars for the year ending on 31st March, 2010; 31st March, 2011 and 31st March, 2012 subject to certain disclosures.

Besides, the Ministry of Corporate Affairs vide Notification No. S. O. 301 (E) dated 8th February, 2011, has also granted exemption to Hotel Companies from disclosing quantity-wise details of turnover subject, inter-alia, to the approval of the Board of Directors of the Company. The Board of Directors of the Company have approved availing of the benefit under the aforesaid notification.

19. The Board of Directors of the Company has approved availing of the benefit under the General Circular No: 2/2011 dated 8th February, 2011 exempting the Company from attaching with the Balance Sheet of the Company a copy of the balance sheet, profit and loss account etc. of its subsidiary.

20. Disclosure of Sundry Creditors under Current Liabilities is based on the information available with the Company regarding the status of the suppliers as defined under the "Micro, Small and Medium Enterprises (Development) Act, 2006".

21. Earnings Per Share

The investor namely the IL&FS group in the Subsidiary Company Aria Hotels and Consultancy Services Pvt. Ltd. has one of the exit options to acquire the shares of the Company at a later date. However, since the option is not exclusive and subject to certain conditions/ approvals, with number of shares not being determined, impact of future diluted potential equity shares has not been considered in calculating diluted earning per share.

25. Schedules 1 to 18 form an integral part of the Balance Sheet as at 31 March, 2011 and Profit & Loss Account for the year ended on that date.

26. Previous year financial statements are for nine months (represents operations of Hotel Hyatt Regency, Mumbai for five months period), hence not comparable to the current years financial statements.

27. Previous period figures have been regrouped/ reclassified wherever necessary to conform to current year classification.


Mar 31, 2010

1. Contingent Liabilities not provided for in respect of:

a. Export obligation in respect of EPCG Licenses: Rs. 1,172.96 lacs (Previous year Rs Nil).

b. For stamp duty for Mumbai Undertaking: Rs. 1,500 lacs (Previous year Rs. Nil)

2. Estimated amount of contracts remaining to be executed on capital account (net of advances): Rs. 27.78 lacs (Previous year Rs Nil).

3. Pursuant to the Scheme of Arrangement and Demerger (the Scheme) of trifurcation of Asian Hotels Limited (AHL) approved by the Honble High Court of Delhi at New Delhi on 13 January, 2010, Mumbai Undertaking of AHL comprising of Hotel Hyatt Regency, Mumbai along with shares held in Aria Hotels & Consultancy Services (P) Limited, and others stands transferred to and vested in the Company. Features of the Scheme as applicable to the Company are as under:

a. Appointed date for the Scheme is 31 October, 2009.

b. Effective date for the Scheme is 11 February, 2010, being the date when the Order of Honble High Court has been filed with the Office of the Registrar of Companies, NCT of Delhi and Haryana.

c. In terms of the scheme, on the effectiveness of the Scheme, the paid- up equity share capital of the Transferor Company (AHL) before Demerger, amounting to Rs.22,80,35,640/- was deemed to have increased to Rs. 34,20,53,460/- as a result of appropriation of the general reserves to the extent of Rs. 11,40,17,820/- and the deemed increased paid up equity capital of the AHL was equally allocated to the three undertakings at demerger so that each of AHL Residual undertaking, Transferee Company-1 and Transferee Company -II would have a paid up equity share Capital of Rs. 11,40,17,820/- as at 31st October, 2009, being the Appointed Date. As a result thereof, for every 2 equity shares of Rs. 10/- held in AHL as on the Record Date, every equity shareholder of AHL is entitled to receive 1 equity share of face value of Rs. 10/- each of the Company.

d. As per terms of the Scheme, the Company is required to re-issue 49,50,000 1 % Non Convertible Preference Shares (NCPS) as per the following:

i. 50,000 1%NCPS of face value of Rs 10/- each of the Company to Magus Estate and Hotels Limited credited as fully paid up.

ii. 49,00,000 1 % NCPS of face value of Rs 10/- each of the Company to Infrastructure Development Finance Company Limited credited as fully paid up.

e. As per terms of the Scheme, the Company is required to re-issue 27,780 1% Fully Convertible Preference Share (FCPS) as per the following:

i. 18,520 FCPS of face value of Rs 10/- each of the Company to Fineline Holdings Limited credited as fully paid.

ii. 9,260 FCPS of face value of Rs 10/- each of the Company to Global Operations Re. Ltd. (thru its nominee UDT Enterprises Pty. Ltd.) credited as fully paid.

2. The Company had filed necessary application for listing of equity shares of the Company alongwith necessary documents and annexure with Bombay Stock Exchange Limited and the National Stock Exchange of India Limited on 6th April, 2010. Subsequently to Companys application BSE being the designated Stock Exchange has given its approval of Listing and forwarded the application to SEBI for relaxation under Rule 19(2)(b) of the Securities Contracts (Regulation) Rules, 1957.

3. Capital Work in Progress includes advances for capital contracts aggregating to Rs. 31.02 lacs (previous year Rs Nil).

4. The Company has not recognised any loss on impairment in respect of assets of the Company as is required in terms of Accounting Standard 28 on "Impairment of Assets" since in the opinion of the Management, 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 on the basis of the information and explanations given.

5. Loans and advances include a claim in respect of stamp duty lodged with Maharashtra Tourism Development Corporation Limited (MTDCL) by Asian Hotels Limited in earlier years of Rs 528.32 Lacs relating to land at Mumbai, considered to be fully recoverable on the basis of the refund approved by MTDCL vide letter issued on 31 October 2009.

6. Out of Service Tax demand raised and paid during the earlier years for Rs. 146.11 Lacs, Rs. 95.94 Lacs had been paid under protest. In the opinion of the management, amount paid under protest is not liable to be paid and hence has been included under "Loans & Advances" as "Claims Recoverable" based on progress made in the matter so far.

7. As the company is engaged in only one segment of Hotel business, the disclosure requirements of Accounting Standard (AS-17) on "Segment Reporting" are not applicable.

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

a) Defined contribution plans

i. Provident fund

b) Defined benefits plans

i. Contribution to Gratuity funds

ii. Compensated absences - Earned leave

In accordance with Accounting Standard 15 (revised 2005), 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 8 % p.a. compound, has been used in consultation with the employer.

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 Companys 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 future salary increases considered take into account the inflation, seniority, promotion and other relevant factors.

3. The gratuity plan and earned leave is unfunded. Demographic assumptions:

a. Retirement age 58 years

b. Mortality rate Published rates under LIC (1994-96) mortality table.

13. In accordance with the Accounting Standard on " Related Party Disclosures" (AS-18), the disclosures in respect of Related Parties and transactions with them, as identified and certified by the management, are as follows: -

Related Party Disclosures

a. List of related parties

(i) Subsidiary Company

Aria Hotels and Consultancy Services Pvt Ltd

(ii) Key Management Personnel

Mr. Sushil Gupta (Chairman & Managing Director)

(Hi) Relative of Key Management Personnel

Mr. Sudhir Gupta (Brother of Mr. Sushil Gupta) Mr. Sandeep Gupta (Son of Mr. Sushil Gupta)

(iv) Entities over which directors and their relatives can exercise significant influence

- Eden Park Hotels Private Limited Inovoa Hotels & Resorts Limited

Choice Hospitality India Limited (till 08 January, 2010) CLG Hotels and Resorts Private Limited Asian Hotels (North) Limited

- M/s Bhasin & Co.

b. Terms of Redemption of Fully Convertible Preference Shares (FCPS)

The FCPS are convertible into equity shares of face value of Rs. 10/- each any the during the period commencing seven months after the commencement of the trading of the equity shares of the Company by the Bombay Stock Exchange, being the designated stock exchange, and ending on the expiry of eighteen months from the date of issuance thereof, as may be decided by the respective subscriber to the FCPS from time to time.

9. The Company has applied to the Ministry of Corporate Affairs, Government of India under section 211(4) of the Companies Act, 1956 for getting exemption with regard to disclosures in respect of quantitative details of turnover, opening and closing stock, purchases, production and consumption of raw material. The final approval is awaited pending which the said disclosures are not being furnished.

10. Disclosure of Sundry Creditors under Current Liabilities is based on the information available with the Company regarding the status of the suppliers as defined under the "Micro, Small and Medium Enterprises Development Act, 2006.

11. 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 first pari passu charge created by the Company on its immovable property situated at Mumbai namely Hotel Hyatt Regency, Mumbai.

b) First pari passu charge on all existing and future current assets and movable fixed assets of 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 three of the directors of the Company.

* Fully convertible preference shares are convertible into equity shares at a value to be determined in accordance with the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009 at the time when preference shareholders opt for conversion of the same into equity shares. Number of equity shares arising out of such conversion being not determinable at this stage, diluted earning per share cannot be computed.

12. The name of the Company has been changed from Chillwinds Hotels Limited to Asian Hotels (West) Limited effective 12 February, 2010.

13. Schedules 1 to 16 form an integral part of the Balance Sheet as at 31 March, 2010 and the Profit and Loss Account for the nine months period ended 31 March, 2010.

14. Previous year financial statements are for fifteen months whereas current year financial statements are for nine months (it contains operations of Hotel Hyatt Regency, Mumbai for five months period).

15. Previous year figures have been regrouped/ reclassified wherever necessary to conform to current year classification.


Jun 30, 2009

1. Contingent Liabilities:

(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

2. Capital Work-in-Progress consists of:

(a) Renovation/refurbishing work / other work in progress 615.39 681.31

(b) Advances for capital contracts (unsecured, considered good) 138.17 3330.72

753.56 4012.03

3. 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.

4. 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.

5. 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 informationand explanations available.

6. 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.

7. 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.

8. 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.

9. 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.

10. 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)

Note: 1. 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 Hotels of the Company

Note: 2. In view of the legal opinion taken by the Company, the above said transactions does not require prior approval from Central Government under Section 297 of the Companies Act, 1956.

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 Magus Estates & Hotels Limited

M/s Bhasin & Co Nepal Travel Agency Private Limited

Choice Hospitality (India) Limited Ram Pyari Devi Charitable Trust

Energy Infrastructure (I) Limited WEL Intertrade Limited

Godfrey Philips Limited Eden Park Hotels Private Limited Juniper Hotels Private Limited

11. During the prior year, the Company with an object to facilitate trifurcation under the Scheme had allotted 2 crores 1% Cumulative Redeemable Non Convertible Preference Shares (NCPS) of Rs 10/- each at a premium of Rs 80/- per share. As per the respective Subscription Agreement with Infrastructure Development Finance Company Limited (IDFC) and Magus Estate and Hotels Limited (Magus), a Company in which two of the directors are interested for subscription to the said preference shares, the Company is to redeem the said Preference Shares in three installments of 25%, 25% and 50% (including premiums) respectively as under:

Date of Redemption Amount of Redemption including Redemption Premium

(Rs. in Lakhs) IDFC MAGUS (as per agreed revised terms)

June 30, 2008 3303.00 2250.00

June 30, 2009 2989.00 2250.00

June 30, 2010 4832.00 4500.00

During the period, 50% of such NCPS have already been redeemed. An amount of Rs. 17,458 Lakhs, out of the proceeds from the above said preference shares had been subscribed as equity in GJS Hotels Ltd, a subsidiary of the Company which is to be a part of the Kolkata undertaking in terms of the Scheme.

12. 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.

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