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Notes to Accounts of Benares Hotels Ltd.

Mar 31, 2017

In preparing its opening Ind AS Balance Sheet, the Company has adjusted the amounts reported previously in financial statements prepared in accordance with the accounting standards notified under Companies (Accounting Standards) Rules, 2006 (as amended) and other relevant provisions of the Act (previous GAAP or Indian GAAP). The exemptions and exceptions applied by the Company in accordance with Ind AS 101 ''First-time Adoption of Indian Accounting Standards'' along with the reconciliations of equity, total comprehensive income and cash flows in accordance with Previous GAAP to Ind AS are explained below.

Exemptions from retrospective application:

The Company has applied the following exemptions:

1. Business combinations exemption

The Company has elected not to apply Ind AS 103, Business Combinations, to business combinations occurred before the transition date.

2. Property, plant and equipment, investment properties and intangible assets Deemed Cost

Ind AS 101 permits a first time adopter to elect to continue with the carrying value for all of its property plant and equipment as recognized in the financial statements as at the date of transition to Ind AS, measured as per the previous GAAP and use that as its deemed cost as at the date of transition after making necessary adjustments for decommissioning liabilities included in the cost of property, plant and equipment (para D7AA of Appendix D). This exemption can also be used for intangible assets covered by Ind AS 38 ''Intangible Assets'' and investment property covered by Ind AS 40 ''Investment Properties''.

Accordingly, the Company has elected to measure all of its property, plant and equipment, intangible assets and investment property at their previous GAAP carrying value.

3. Cumulative translation differences exemption

The Company has elected to set all the cumulative translation gains and losses to zero by transferring it to opening retained earnings at its transition date.

Footnotes:

4. Under Ind AS, certain items of income and expense that are not recognized in profit or loss but shown in the statement of profit or loss as ''other comprehensive income'' includes re-measurement of defined benefit plans. The concept of other comprehensive income did not exist under previous GAAP

5. Under Ind AS, the company has recognized the value of license to be received under the Services Exports from India Scheme (SEIS) on accrued basis which were earlier being accounted on utilization basis in previous GAAP in erstwhile Served from India Scheme (SFIS).

6. Current and Deferred tax have been recognized on the adjustments made on transition to Ind AS.

7. Other Comprehensive Incomes represent the impact of re-measurements of post employment benefit obligation, net of tax of'' 2.35 lakhs (item of other comprehensive income recognized directly in retained earnings (Not reclassified to P&L)

The Company has taken certain vehicle, land and immovable properties on operating lease. These leases have varying terms, escalation clauses and renewal rights. The total lease rent paid on the same is included under Rent and License Fees forming part of Other Expenses (Refer note no 23 (ii)). The minimum future lease rentals payable in respect of non-cancellable leases entered into by the Company to the extent of minimum guarantee amount are as follows:

8: CONTINGENT LIABILITIES (TO THE EXTENT NOT PROVIDED FOR):

9. On account of Income Tax matters in dispute:

10. In respect of matters which had been decided in the Company’s favour earlier by both CIT-A and ITAT, but now the Hon’ble Allahabad High Court has referred the case back to CIT-A for reconsideration of the facts involved - Rs.167.97 Lakhs (previous year - Rs. 127.97 Lakhs).

11. In respect of other matters for which Company’s appeals are pending with appellate authorities against the order of the assessing officer - Rs. 12.79 Lakhs (previous year - Rs. 28.90 Lakhs)

12. On account of other disputes in respect of:

13. Service Tax - Rs. 28.78Lakhs (previous year - Rs. 19.08 Lakhs)

14.. Sales tax - Rs. 39.19Lakhs (previous year - Rs. 36.27 Lakhs)

15.. Others - Rs. 1.21 (previous year - Rs. 3.45 Lakhs)

16. As per Ind AS 24, “Related Parties Disclosure” notified by the Companies (Accounting Standards) Rules 2006 the following are the key categories of Related Parties:

17.. Holding Company- The Indian Hotels Company Limited

18. Associate & Joint Ventures of the Holding Company- 15 Entities

19. Fellow Subsidiary Companies- 31 Entities

20. Associate and joint venture of above fellow Subsidiaries- 12 Entities

21. Entity having Significant Influence- Tata Sons Limited

22. Subsidiaries/ Joint venture of Tata Sons Limited- 247 Entities

23. Post-employment benefit plan entity for the benefit of employees of company- Hotel Taj Ganges Employee Gratuity Trust.

24. Entities in which directors of the company are interested- 34 Entities

25. Company Directors and Relatives- 61 persons

26. Company KMP and Relatives- 17 persons

27. Holding Company Directors, KMP and their Relatives- 120 persons

28. Entities controlled / jointly controlled by the KMP of Holding company-Business Jets India Pvt Ltd

29. Financial risk management:

The Company has a risk management policy which covers risks associated with the financial assets and liabilities. The management assesses the unpredictability of the financial environment and to mitigate potential adverse effects on the financial performance of the Company

30. Market risk

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Such changes in the values of financial instruments may result from changes in the foreign currency exchange rates, interest rates, credit, liquidity and other market changes.

31. Credit risk

Credit risk is the risk of financial loss arising from counter party failure to repay or service debt according to the contractual terms or obligations. Credit risk encompasses of both, the direct risk of default and the risk of deterioration of creditworthiness as well as concentration of risks.

BHLs exposure to customers is diversified and no single customer contributes to more than 10% of outstanding accounts receivable and unbilled revenue as of March 31,2017 and April 1,2016.

Financial assets that are neither past due nor impaired

Cash and cash equivalents, financial assets carried at fair value and interest-bearing deposits with corporate are neither past due nor impaired. Cash and cash equivalents with banks and interest-bearing deposits placed with corporate, which have high credit-rating assigned by international and domestic credit-rating agencies. Trade receivables and other financial assets that are past due but not impaired, there were no indications as of March 31,2017, that defaults in payment obligations will occur except as described in note 9 on allowances for impairment of trade receivables. The Company does not hold any collateral for trade receivables and other financial assets. Trade receivables and other financial assets that are neither past due nor impaired relate to new and existing customers and counter parties with no significant defaults in past.

32. Liquidity risk

Liquidity risk refers to the risk that the Company cannot meet its financial obligations. The objective of liquidity risk management is to maintain sufficient liquidity and ensure that funds are available for use as per requirements.

The Company consistently generated sufficient cash flows from operations to meet its financial obligations as and when they fall due.

Dividends paid during fiscal 2017 include an amount of INR 260 Lakhs @ Rs.20/- per equity share towards dividend for fiscal 2016. Dividends paid during fiscal 2016 include an amount of INR 260 Lakhs @ Rs.20/- per equity share towards dividend for fiscal 2015.

The dividends declared by Benares Hotels Limited are in Indian Rupees and are based on the profits available for distribution as reported in the statutory financial statements of Benares Hotels Limited. Subsequent to March 31, 2017, the Board of Directors of Benares Hotels Limited have proposed a dividend of Rs.195 Lakhs (Rs.15 per share) in respect of fiscal 2017. The proposal is subject to the approval of shareholders at the Annual General Meeting, and if approved, would result in a cash outflow of approximately INR 234.70 Lakhs, inclusive of corporate dividend tax of INR 39.70 Lakhs. Remittance of dividend within India is exempt from tax in the hands of shareholders.

Additional disclosure for Share Capital

The Company''s objective for capital management is to maximize shareholder value, safeguard business continuity and support the growth of the Company. The Company determines the capital requirement based on annual operating plans and long-term and other strategic investment plans. The funding requirements are met through equity and operating cash flows generated.


Mar 31, 2016

NOTE 1: CONTINGENT LIABILITIES (to the extent not provided for)

(a) On account of Income Tax Matters in Dispute:

i. In respect of matters which have been decided in the Company''s favour by both CIT-A and ITAT, but the Income Tax Department has preferred an appeal in Hon''ble Allahabad High Court Rs.127.97 Lacs (previous year - Rs.127.97 Lacs).

ii. In respect of other matters for which Company''s appeals are pending with appellate authorities against the order of the assessing officer Rs.28.90 Lacs (previous year Rs.23.21 Lacs)

(b) On account of other disputes in respect of:

i. Service Tax - Rs.19.08 Lacs (previous year - Rs.19.08 Lacs)

ii. Sales tax - Rs.36.27 Lacs (previous year - Rs.36.27 Lacs)

iii. Others - NIL (previous year - Rs.3.45 Lacs)

NOTE 2: CAPITAL COMMITMENTS:

Estimated amount of contracts remaining to be executed on capital account net of capital advances and not provided for is Rs.39.65 Lacs (Previous year - Rs.41.67 Lacs).

NOTE 3: SEGMENT REPORTING

The Company’s business consists of its hotel operations only and hence no separate information for segment-wise disclosures under Accounting Standard on ‘Segment Reporting (AS-17)’, issued by the Institute of Chartered Accountants of India, is given.


Mar 31, 2015

NOTE 1: CORPORATE INFORMATION

Benares Hotels Limited ("BHL' or the "Company"), is a listed public limited company incorporated in 1971. The Company operates its hotels, viz.The Gateway Hotel Ganges and Nadesar Palace in Varanasi and The Gateway Hotel, Gondia in Maharashtra. The Company became a subsidiary of The Indian Hotels Company Limited in May, 2011.

NOTE 2: CONTINGENT LIABILITIES (to the extent not provided for)

(a) On account of Income Tax Matters in Dispute:

i. In respect of matters which have been decided in the Company's favour by the CIT-Appeals, where the Income Tax Department has preferred an appeal in ITAT ' 127.97 Lacs (previous year - ' 118.35 Lacs).

ii. In respect of other matters for which Company's appeals are pending with appellate authorities against the order of the assessing officer ' 23.21 Lacs (previous year ' 60.05 Lacs)

(b) On account of other disputes in respect of:

i. Service Tax - Rs 19.08 Lacs (previous year Rs 19.08 Lacs)

ii. Sales tax Rs 36.27 Lacs (previous year Rs 36.27 Lacs)

iii. Others Rs 3.45 lacs (previous year Rs 3.45 Lacs)

NOTE 3: CAPITAL COMMITMENTS:

Estimated amount of contracts remaining to be executed on capital account net of capital advances and not provided for is Rs. 41.67 Lacs (Previous year Rs 672.64 Lacs).

NOTE 4: PROVISION FOR DOUBTFUL DEBTS AND BAD DEBTS WRITTEN OFF

(a) During the year, an amount of Rs. 0.70 lacs was written back from provision for doubtful debts due to provision no more required on some debts.

(b) There is no provision for doubtful debts or amounts written off or written back during the year for debts due from or to related parties.

NOTE 5: CSR (Corporate Social Responsibility) EXPENDITURE

During the year, the company incurred an expenditure of Rs. 38.66 Lacs towards Corporate Social Responsibility in terms of the provision of Section 135 of the Companies Act, 2013. A brief summary along with the breakup of expenditure along with type, i.e. revenue/ capital, is as follows:

Capital Expenditure (Capitalized as Fixed Assets)

The Company's business consists of its hotel operations only and hence no separate information for segment-wise disclosures under Accounting Standard on 'Segment Reporting (AS-17)', issued by the Institute of Chartered Accountants of India, is given.

Earnings Per Share is calculated in accordance with Accounting Standard 20 'Earnings Per Share', notified by the Company's (Accounting Standards) Rules, 2006 as amended.


Mar 31, 2013

NOTE 1: CORPORATE INFORMATION

Benares Hotels Limited ("BHL'' or the "Company"), is a listed public limited company incorporated in 1971. The Company operates its hotels, viz., The Gateway Hotel Ganges and Nadesar Palace in Varanasi. The company became a subsidiary of The Indian Hotels Company Limited in May, 2011.

NOTE 2: CONTINGENT LIABILITIES (to the extent not provided for):

Previous

Year

Rs. Lacs Rs. Lacs

(a) Claims against the company in respect of arrears of electricity charges,matterpendinginHon''ble HighCourt,Allahabad 3.45 3.45

(b) On account on demand in respect ofUP Trade Tax AY 2006-07, Case remanded back by Appellate Tribunal for rehearing and orderstothefirstAppellate Authority 15.88

(c) On account of demand in respect ofUP Trade Tax AY 2007-08, Case remanded back by Appellate Tribunal for rehearing and orderstothefirstAppellateAuthority .20.39 9.66

(d) On account of Income Tax for AY 2007-08, demand raised by IncomeTaxAuthorityappealpending 4.15

(e) Demand raised by Income Tax Authority for AY 2009-10, by inflating income and assuming higher profitability ratio. CIT (Appeals) passed the order in favour of the company, however Income Tax Department has filed appeal in ITAT challenging the orderoftheCIT(Appeals) 118.35

(f) Demand raised by Income Tax Authority for AY 2010-11, by inflating income and making adhoc additions, appeal pending in CIT (Appeals) 40.86

Total 203.08 13.11



NOTE 3:

The Company''s business consists of its hotel operations only and hence no separate information for segment-wise disclosures under Accounting Standard on "Segment Reporting" (AS-17), issued by the Institute of Chartered Accountants of India, is given.

NOTE 4: RELATED PARTY DISCLOSURES

(c) The license fee payable by the company is in respect of licence agreement entered by the company on a revenue sharing basis with the owners of the Nadesar Palace in Varanasi and the land on which the Palace is situated. The property licensed to the Company is owned by Dr. Anant Narain Singh along with two private limited companies and a Trust in which Dr. Anant Narain Singh is a Director and a Trustee respectively. As per the agreement terms, this year, an amount of Rs. 21.13 lacs (amount equivalent to 3% of net sales of Nadesar Palace) was paid during the year towards License fee.

NOTE 5: PROVISION FOR DOUBTFUL DEBTS AND BAD DEBTS WRITTEN OFF

During the year, an amount ofRs. 24.31 lacs (previous year Rs. 42.67 lacs) has been written off as bad debts. Since the amount has been written off against the already existing amounts provided for doubtful debts in past years, it has not impacted the profitability of the year.

There is no provision for doubtful debts or amounts written off or written back during the year for debts due from or to related parties.

NOTE 6: EARNINGS PER SHARE (EPS)

Earnings Per Share is calculated in accordance with Accounting Standard 20 - ‘Earnings Per Share'' - (AS-20), notified by the company''s Accounting Standards Rules, 2006 as amended.


Mar 31, 2012

(In view of the Notification No. S.O. 301(E) dated 8th February, 2011 issued by the Ministry of Corporate Affairs, the Hotel companies have been exempted from disclosing in their Profit and Loss Account, the information under paragraph 3(i)(a) and 3(ii)(d) of part II of Schedule VI regarding quantity wise details of turnover.)

Previous Year Rupees Rupees

1. Contingent Liability not Provided For:

a. Claims against the Company in respect of arrears of electricity charges not acknowledged as debts 3,45,323 3,45,323

b. On account of dispute in respect of UP Trade Tax, Appeal filed by the Company. UP Trade Tax AY 2007-08 9,66,000 10,69,834

c. Estimated amount of contracts remaining to be executed on capital account (Capital Commitment) (net of capital advances) 2,87,83,797 1,24,26,428


Mar 31, 2011

Previous Year Rupees Rupees

1. Contingent Liability not provided for :

a) Claims against the Company in respect of arrears of electricity charges not acknowledged as debts 3,45,323 3,45,323

b) On account of dispute in respect of : UP Trade Tax 10,69,834 10,69,834

c) The Company had conducted physical verification of assets during the year through another firm and as the result of such verification, many of the items purchased since 1980 till 2000 which have been depreciated to 5% of its original cost as per the policy of the company have been found either missing or un useable or untraceable and the same have been written off/ retired from the records of the company amounting to Rs. 68.39 lacs and depreciation loss on such account was Rs. 4.57 lacs which has been shown in P & L under Loss on sale of assets. The majority in number of the items written off are kitchen equipment and data processing equipment which are thrown out or discontinued to be used after use for sometime but not reported from time to time. This loss has been set off against the profit of Rs. 3.61 lacs on sale of DG set and the net amount Rs. 0.96 lacs is shown in Schedule 7 against Loss on discarded assets.

d) Commitments on Capital Account not provided for 1,24,26,428 1,77,10,185

2. (a) There is no interest paid/payable during the year by the Company to the Suppliers covered under Micro, Small, Medium Enterprises Development Act, 2006.

(b) The above information takes into account only those suppliers who have responded to the enquiries made by the Company for this purpose.

3. The Company's business consists of its hotel operations only and hence no separate information for segment-wise disclosures under Accounting Standard on 'Segment Reporting'(AS-17), issued by the Institute of Chartered Accountants of India, is given.

4. a) Details of transactions with related parties during the year :

ii) The Company entered into a licence agreement on a revenue sharing basis with the Owners of the Nadesar Palace in Varanasi and the land on which the Palace is situate. The property licensed to the Company is owned by Dr. Anant Narain Singh and by two private limited companies and a Trust in which Dr. Anant Narain Singh is a director and a trustee respectively An amount of Rs. 17.00 lacs per annum increasing periodically or 3% of the Net Sales from that property whichever is higher is payable in quarterly instalments as per the terms of the agreement. Thus this year Rs. 17.85 Lacs is provided towards the license fee.

c) There is no provision for doubtful debts or amounts written off or written back during the year for debts due from or to related parties.

5. Previous Year's figures have been regrouped wherever necessary to conform to the current year's presentation.


Mar 31, 2010

Previous Year Rupees Rupees

1. Contingent Liability not provided for :

a) Claims against the Company in respect of arrears of electricity charges not acknowledged as debts.... 3,45,323 3,45,323

b) Income Tax matters in dispute :

The Department had partially disallowed the claim of the Company u/s 80HHD, in respect of the Assessment Year 1990- 91, on the ground that the Income from Rooms does not constitute Services, but is covered under the ambit of Rent and therefore not eligible for deduction under the said section. The Company had been advised legally that no provision for such demand is necessary in the books of accounts. On an appeal filed by the Company against the assessment made for the AY 1990-91, the CIT(A) and ITAT had upheld the views of the Company. However, the Department had moved the High Court against the Order of the ITAT. To the knowledge of the Company the Department has referred the matter to the High Court for the various assessment years up to 2004-05, except for the years for which no scrutiny was undertaken. The total tax demand under dispute up to the assessment years 2007-08 was Rs. 3,49,64,324/- which had been contested by the Company in Appeal. Now the case has been decided in Companys favour and there is no contingent liability. Assessments for the AY 2008-09 and AY 2009-10 are pending.

c) On account of dispute in respect of :

UP Trade Tax....................................10,69,834 10,69,834

d) Commitments on Capital Account not provided for............... 1,77,10,185 1,70,02,245

2. (a) There is no interest paid/payable during the year by the Company to the Suppliers covered under Micro, Small, Medium Enterprises Development Act, 2006. (b) The above information takes into account only those suppliers who have responded to the enquiries made by the Company for this purpose.

3. 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. 46/25/2008-CL-III dated 14th May, 2008 issued by the Department of Company Affairs, the Company has been exempted from giving these particulars for the year 2009-10 subject to certain disclosures.

4. The Companys business consists of its hotel operations only and hence no separate information for segment-wise disclosures under Accounting Standard on Segment Reporting(AS-17), issued by the Institute of Chartered Accountants of India, is given.

5. Previous Years figures have been regrouped wherever necessary to conform to the current years presentation.

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