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Notes to Accounts of Asian Hotels (West) Ltd.

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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