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Notes to Accounts of EIH Ltd.

Mar 31, 2017

1 SIGNIFICANT ESTIMATES AND JUDGEMENTS

The preparation of financial statements requires the use of accounting estimates which, by definition, will seldom equal the actual results. Management also needs to exercise judgment in applying the company''s accounting policies.

This note provides information about the areas that involved a higher degree of judgment or complexity, and of items which are more likely to be materially adjusted due to estimates and assumptions turning out to be different than those originally assessed.

Estimates and judgments are continually evaluated. They are based on historical experience and other factors, including expectations of future events that may have a financial impact on the company and that are believed to be reasonable under the circumstances.

i) Useful life of the Hotel Building

The Company has adopted useful life of fixed assets as stipulated by Schedule II to the Companies Act, 2013 except for the hotel buildings for computing depreciation. In the case of the hotel building of the Company, due to superior structural condition, management decided to assess the balance useful life by independent technical expert. As per the certificates of the technical expert, the balance useful life of the hotel buildings ranges between 30 years and 60 years with effect from 31st March, 2015 and are higher than those specified by Schedule II to the Companies Act, 2013. The carrying amount of the hotel building is being depreciated over its residual life.

ii) Advance towards Equity Shares

In the case of Mashobra Resort Limited ("MRL"), several disputes with the Government of Himachal Pradesh, the joint venture partner, were referred by the High Court of Himachal Pradesh on 17th December, 2003 to an arbitral tribunal consisting of a single arbitrator whose award has been challenged by both the Company and MRL, amongst others. The operation of the arbitration award was stayed pending substantive hearing of the applications by the High Court. Consequently, the status quo ante of the entire matter was restored to the position as on 17th December, 2003 and the hotel is being operated by MRL accordingly. The Company vide its letter dated 4th April, 2012 requested MRL to account for the entire amount of INR 1,361.93 Million provided to MRL upto 31st March, 2012 as ''Advance Towards Equity'', including INR 130.00 Million being the opening balance of ''Advance Towards Equity''. In view of the above, the Company has shown the said amount of INR 1,361.93 Million as ''Advance Towards Equity'' in its books.

The High Court passed an order dated 25th February, 2016 which was made available to the Company in the month of May 2016. The Court has decided not to interfere with the order of the Arbitrator. The Company amongst others, preferred an appeal before the Division Bench of the High Court of Himachal Pradesh. By an order dated 27th June, 2016 the Division Bench stayed the Single Judge Order dated 25th February, 2016 and directed the parties to maintain status quo till the matter is finally heard and disposed off. Final hearing is yet to commence.

iii) Recognition of Revenue (customer loyalty programs)

The company is running certain customer loyalty programs for which revenue is being deferred on the basis of total loyalty points/complimentary nights outstanding. As required by Ind AS 18, while calculating fair value of the loyalty points/complimentary nights, expected lapses are also considered by the company (loyalty points/complimentary nights which will not be redeemed by the customers). On the basis of past trend, a significant portion of the loyalty points/ complimentary nights has been estimated to be lapsed. Estimated lapse ratio is periodically evaluated by the company and in case there is any change in the trend, the deferred revenue is adjusted accordingly. The fair value of loyalty points/ complimentary nights is calculated on the basis of relative benefit passed on to the customers.

Nature and purpose of Reserves

(i) Capital Redemption Reserve

Capital Redemption Reserve represents the statutory reserve created by the company for the redemption of its preference share capital issued and redeemed under previous GAAP. The same can be utilized by the company for issuing fully paid bonus shares.

(ii) Revaluation Reserve

Revaluation Reserves was created under previous GAAP on upward revaluation on land and building. An amount equivalent to additional amortization/depreciation charged during the period on leased land and building due to upward revaluation is transferred directly from Revaluation Reserve to General Reserve at each reporting period.

PARTICULARS OF TERM BORROWINGS :

i) Security :

Term loan from ICICI is secured by way of equitable mortgage by deposit of title deeds in respect of the Company''s hotel in Delhi known as Maidens Hotel, ranking pari passu .

Term loan from The Hong Kong & Shanghai Banking Corporation Limited (HSBC) is secured by way of equitable mortgage by deposit of title deeds in respect of the Company''s hotel in Delhi known as The Oberoi, New Delhi. Process of creation of security is in progress.

The Finance Lease obligations are secured by hypothecation of vehicles taken under Lease.

ii) Terms of repayment and Interest rate :

Term Loan From The Hong Kong & Shanghai Banking Corporation Limited (HSBC) is repayable in 28 quarterly installment starting from February 2018 and carries interest which is linked to banks MCLR, presently effective rate is 8.88%

Term Loan From ICICI Bank carries interest at the rate of 0.55% above bank''s base rate, repayable in quarterly installments of INR 100.00 Million each. Repayment will be complete in July 2017.

The Finance Lease obligations are secured by hypothecation of vehicles taken under Lease. Repayments are done by equated monthly installments over 36 to 60 months.

Two pieces of land under Finance Lease are under Lease upto 2064-65. Another piece of land is under perpetual lease. Rent is payable on a monthly basis.

(i) Defined benefit plans

a) Gratuity

The company provides for gratuity for employees in India as per the Payment of Gratuity Act, 1972. The Company operates a gratuity plan through the "EIH Employees'' Gratuity Fund". Gratuity plan is a funded plan and the Company through Gratuity Trust makes contributions to Life Insurance Corporation of India funds.

b) Leave Encashment

As per the policy of the company, obligations on account of encashment of accumulated leave of an employee is settled only on termination/ retirement of the employee. Such liability is recognized on the basis of actuarial valuation following Project Unit Credit Method. It is an unfunded plan.

(ii) Defined contribution plans

The company also has certain defined contribution plans. Contributions are made to provident fund in India for employees at the rate of 12% of basic salary as per regulations. The contributions are made to registered provident fund administered by the government. The obligation of the company is limited to the amount contributed and it has no further contractual nor any constructive obligation.

The above sensitivity analyses are based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method i.e. projected unit credit method has been applied as that used for calculating the defined benefit liability recognized in the balance sheet.

* Gratuity trust pays contribution to LIC which in turn invests the amount in various instruments. As it is done by LIC in totality basis along with contributions from other participants, the Company wise investment in planned assets - category / class wise is not available.

(vii) Risk exposure

The defined benefit obligations have the under mentioned risk exposures :

Interest rate risk : The defined benefit obligation is calculated using a discount rate based on government bonds. If bond yields fall, the defined benefit obligation will tend to increase.

Salary Inflation risk : Higher than expected increases in salary will increase the defined benefit obligation.

Demographic risk : This is the risk of variability of results due to unsystematic nature of decrements that include mortality, withdrawal, disability and retirement. The effect of these decrements on the defined benefit obligation is not straight forward and depends upon the combination of salary increase, discount rate and vesting criteria.

(viii) Defined benefit liability and employer contributions

Expected contribution to post employment benefit plan for the year ending March 31, 2018 is INR 117.25 Million.

The weighted average duration of the defined benefit obligation is 9 years in case of Gratuity and 11 years in case of Leave encashment in all the three years.

* Net of current account balances.

PARTICULARS OF SHORT TERM BORROWINGS : i) Security :

Cash Credit facilities from banks and short term loan from HSBC are secured by way of hypothecation of all stock of inventories, book debts and other current assets of the company, both present and future, ranking pari passu. Cash Credit with United Bank of India is additionally secured by way of second charge in respect of the Company''s hotel in Kolkata known as The Oberoi Grand.

ii) Terms of repayment and Interest rate :

Cash Credit from United Bank Of India is repayable on demand and carries Interest at bank''s base rate 0.80%

Cash Credit from HSBC is repayable on demand and carries Interest at banks base rate 2.90%

Cash Credit from ICICI is repayable on demand and carries Interest at 6 months MCLR 1.15%

Short term loan from HSBC is repayable on maturity and carries Interest @ 8.90%.

Short term loan from Federal Bank Limited is repayable on maturity and carries Interest @ 8.70%.

*The Company''s investments (Note No. 6) include holding of 16% equity shares in the capital of Golden Jubilee Hotels Private Limited (GJHPL). GJHPL has failed to service its debts. Some of the lending banks have recalled the loan given to GJHPL and declared the same as NPA. There is also winding up petition filed by a creditor. Company generally follows an accounting policy of making provision in case of permanent diminution only. However, considering the facts of the case, Company feels that the viability of GJHPL is at stake and provision has been made for abundant caution.

(ii) Fair value hierarchy

This section explains the judgments and estimates made in determining the fair values of the financial instruments that are (a) recognized and measured at fair value and (b) measured at amortized cost and for which fair values are disclosed in the financial statements. To provide an indication about the reliability of the inputs used in determining fair value, the company has classified its financial instruments into the three levels prescribed under the accounting standard.

Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices. This includes listed equity instruments that have quoted price. The fair value of all equity instruments which are traded in the stock exchanges is valued using the closing price as at the reporting period.

Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximize the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. This is the case for unlisted equity securities, security deposits included in level 3.

(iii) Assets and liabilities which are measured at amortized cost for which fair values are disclosed

All the financial asset and financial liabilities measured at amortized cost, carrying value is an approximation of their respective fair value.

(iv) Valuation technique used to determine fair value

Specific valuation techniques used to value financial instruments include:

- Investment in Green Infra Wind Generation Limited and ReNew Wind Energy (Karnataka) Pvt. Ltd. are made pursuant to the contract for procuring electricity supply at the hotels units. Investment in said companies is not usually traded in market. Considering the terms of the electricity supply contract and best information available in the market, cost of investment is considered as fair value of the investments.

- For the investment in Golden Jubilee Hotels Private Limited (GJHPL), the management was of the view that carrying value of the investment is representative of its fair value as on April 1, 2015. As on April 1, 2015, no indicators of impairment were existing. However, during the financial year 2015-16, due to the non-payment of bank borrowings and other obligations, petition for the winding up has been filed by the creditors and lenders of the GJHPL. Considering the financial position of the GJHPL and legal proceedings initiated by lenders, the management has fully provided for the investment in GJHPL as on March 31, 2016.

- Fair valuation of Mercury Travels Limited has been computed using discounted cash flow valuation method ("DCF Method").

*There were no significant inter-relationships between unobservable inputs that materially affect fair values.

(vii) Valuation processes

The fair value of unlisted equity securities has been determined on the basis of valuation done by independent valuer. The main level 3 inputs for unlisted equity securities used by the company are derived and evaluated as follows:

As per the independent valuer, the discounted cash flow valuation method ("DCF Method") provides the most appropriate basis for valuing the equity shares of MTL. However, to reduce the bias of this single valuation methodology, value of equity shares of MTL has been also determine under the Net Asset Value method ("Net Asset Value") and, thereafter, final value of the equity shares of MTL has been determine giving appropriate weight age to the value per equity share under the foregoing DCF Method and Net Asset Value Method respectively.

The discount rates are determined using the capital asset pricing model to calculate pre-tax rate that reflects current market assessment of time value of money and the risk specific to the asset.

Significant estimates

The fair value of financial instruments that are not traded in an active market is determined using valuation techniques. The company uses its judgment to select a variety of methods and make assumptions that are mainly based on market conditions existing at the end of each reporting period.

4 FINANCIAL RISK MANAGEMENT

The company''s activities expose it to market risk (including currency risk, interest rate risk and other price risk), liquidity risk and credit risk.

This note explains the sources of risk which the entity is exposed to and how the entity manages the risk :

The company''s risk management is carried out by a treasury department under policies approved by the Board of Directors, Company Treasury identifies, evaluates and hedges financial risks in close co-operation with the company''s operating units. The board provides principles for overall risk management, as well as policies covering specific areas, such as foreign exchange risk, interest rate risk, credit risk, use of non-derivative financial instruments, and investment of excess liquidity.

(A) Market risk

(i) Foreign currency risk

Foreign currency risk arises from future commercial transactions and recognized assets or liabilities denominated in a currency that is not the Company''s functional currency (INR).

(iii) Price risk

The company''s exposure to equity securities price risk arises from investments held by the company in equity securities and classified in the balance sheet as at fair value through profit and loss (note 6). However, company does not have a practice of investing in market equity securities with a view to earn fair value changes gain. As per the company policies, whenever any investment is made by the company in equity securities, the same is made either with some strategic objective or as a part of contractual arrangement. Further, at the reporting date company does not hold material value of quoted securities. Accordingly, company is not exposed to significant market price risk.

(B) Credit risk

Credit risk arises when a counter party defaults on contractual obligations resulting in financial loss to the company.

Trade receivables consist of large number of customers, spread across diverse industries and geographical areas. In order to mitigate the risk of financial loss from defaulters, the Company has an ongoing credit evaluation process in respect of customers who are allowed credit period. In respect of walk-in customers the company does not allow any credit period and therefore, is not exposed to any credit risk.

In general, it is presumed that credit risk has significantly increased since initial recognition if the payments are more than 30 days past due.

(C) Liquidity risk

The Company has a liquidity risk management framework for managing its short term, medium term and long term sources of funding vis-a-vis short term and long term utilization requirement. This is monitored through a rolling forecast showing the expected net cash flow, likely availability of cash and cash equivalents, and available undrawn borrowing facilities.

(ii) Maturities of financial liabilities

The table below analyses the company''s all non-derivative financial liabilities into relevant maturity based on their contractual maturities.

The amounts disclosed in the table are the contractual undiscounted cash flows.

RELATED PARTY TRANSACTIONS 40 (a) List of Related Parties

Key Management Personnel of the company and close member of Key Enterprises in which Key Management Personnel and close member of

Management Personnel of the company Key management Personnel have Joint Control

Mr. P.R.S. Oberoi Oberoi Hotels Private Limited

Mr. S.S. Mukherji Oberoi Properties Private Limited

Mr. Vikram Oberoi Oberoi Holdings Private Limited

Mr. Arjun Oberoi Oberoi Investments Private Limited

Mrs. Nita M. Ambani Oberoi Buildings and Investments Private Limited

Mrs. Renu Sud Karnad Oberoi Plaza Private Limited

Mr. Manoj Harjivandas Modi Oberoi Leasing and Finance Company Private Limited

Mr. Rajeev Gupta Bombay Plaza Private Limited

Mr. S.K. Dasgupta Oberoi International LLP

Mr. Anil K. Nehru Aravalli Polymers LLP

Mr. Sudipto Sarkar Oberoi Holdings Hong Kong Limited

Mr. L. Ganesh Bhagwanti Oberoi Charitable Trust

Mr. S.N. Sridhar Ishran Devi Oberoi Family Trust

Mr. Biswajit Mitra Oberoi Foundation

Mrs. Goodie Oberoi (Wife of Mr. P.R.S. Oberoi) Vikramaditya Exports Private Limited

Ms. Priyanka Mukherjee (Daughter of Mr. S.S. Mukherji) Arpwood Consultants LLP

Arpwood Partners Investments Advisors LLP

Subsidiaries Arpwood Investments Advisors LLP

Mumtaz Hotels Limited Vidhya Bharati Trust

Mashobra Resort Limited M/s Krishna Enterprises

Oberoi Kerala Hotels & Resorts Limited M/s Durga Enterprises

EIH International Ltd M/s Deepak Associates

EIH Flight Services Limited M/s Sonal Enterprises

EIH Holdings Ltd M/s Alpha Enterprises

EIH Marrakech Ltd* M/s Balaji Realty

J&W Hong Kong Limited M/s TMP Enterprises LLP

EIHH Corporation Limited** Reliance Group Corp.

EIH Investments N.V. Reliance Corp.

EIH Management Services B.V. Shivapriya Corporation

PT Widja Putra Karya Chakradev Enterprises LLP

PT Waka Oberoi Indonesia Janardan Commercials LLP

Pt Astina Graha Ubud Shripal Enterprises LLP

Shivangi Commercials LLP

Associates & Joint Ventures Rane Foundation, Chennai

Mercury Car Rentals Private Limited Oberoi Investments (BVI) Limited

Oberoi Mauritius Ltd Oberoi Services International Limited

EIH Associated Hotels Limited Oberoi Services Pte Limited

Island Resort Ltd Oberoi Holdings (Singapore) Pte. Ltd

Oberoi Corporation Limited

Enterprises which are post employment benefit plan for the Komensi Pty Limited benefit of employees

EIH Employees'' Gratuity Fund Oberoi UK Limited

EIH Executive Superannuation Scheme Oberoi Hotels (Australia) Pty Limited

OBHR Pty Limited OBHR (Australia) Pty Limited Saudi Oberoi Company Limited La Roseraie De L''atlas Silhouette Beauty Parlour

5 LEASES (a) Non-cancellable operating leases As a Lessee

The Company has entered into operating lease arrangements primarily for office premises, site offices, airport/flight services, land for hotels and residential premises for its employees. These leases are generally not non-cancellable in nature and may generally be terminated by either party by serving a notice. During the year, the company has recognized lease rent expense of INR 15.46 Million (2016: INR 13.61 Million) related to such non-cancelable operating lease. The future minimum lease payments payable by the company taken under non-cancellable operating lease, are as under:-

6 First-time adoption of Ind AS Transition to Ind AS

These are the Company''s first financial statements prepared in accordance with Ind AS.

The accounting policies set out in note 1 have been applied in preparing the financial statements for the year ended March 31, 2017,the comparative information presented in these financial statements for the year ended March 31, 2016 and in the preparation of an opening Ind AS balance sheet at April 1, 2015 (date of transition to Ind AS). 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.

Set out below are the applicable Ind AS 101 optional exemptions and mandatory exceptions applied in the transition from previous GAAP to Ind AS.

A. Exemptions and exceptions availed A.1 Ind AS optional exemptions

(a) 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. This exemption is also used for intangible assets covered by Ind AS 38 Intangible Assets.

Accordingly, the Company has elected to measure all of its property, plant and equipment and intangible assets at their previous GAAP carrying value, which has been considered as deemed cost.

(b) Investments in subsidiaries, joint ventures and associates

Ind AS 101 permits a first-time adopter to measure its investments in subsidiaries, joint ventures and associates at deemed cost, which should be either:

(i) fair value at the entity''s date of transition to Ind ASs in its separate financial statements; or

(ii) previous GAAP carrying amount at that date

The company has elected to measure in its separate financial statements all of its investments in subsidiaries, joint ventures and associates at their previous GAAP carrying amount on the date of transition.

(c) Classification and measurement of Lease land

In accordance with Ind AS 101, when a lease includes both land and building elements, a first time adopter may assess the classification of each element as finance or an operating lease at the date of transition to Ind AS on the basis of the facts and circumstances existing as at the date of transition. Accordingly, applying the same exemption, the Company has classified its land leases into finance lease and operating lease on the basis of the facts and circumstances existing as at the date of transition.

A.2 Ind AS mandatory exceptions (a) Estimates

Estimates made under Ind AS as at April 1, 2015 are consistent with the estimates as under previous GAAP.

(b) Classification and measurement of financial assets

Ind AS 101 requires that an entity should assess the classification of its financial assets on the basis of facts and circumstances exist on the date of transition. Accordingly, in its Opening Ind AS Balance Sheet, the company has classified all the financial assets on basis of facts and circumstances that existed on the date of transition, i.e. April 1, 2015.

i. Deferred revenue on Customer Loyalty Programs

The company operates multiple customer reward points program under its hotel business. The programs allows customers to accumulate points/complimentary room nights on hotel bookings. The points can be redeemed by the customers on future bookings and other services such as dinning, SPA, etc. Under the previous GAAP, the company was creating provision towards its liability under the programs on full value without considering the estimated lapses.

Under Ind AS, sales consideration received has been allocated between the hospitality services and the reward points/ complimentary room nights issued. The consideration allocated to the customer reward points/complimentary room nights has been deferred and will be recognized as revenue when the reward points/complimentary room nights are redeemed or lapsed. The consideration to be allocated to the customer reward points/complimentary room nights has been determined considering the past estimated lapses on the basis of past trend. Accordingly, the company has recognized deferred revenue with corresponding adjustment to retained earnings. The provision created under previous GAAP has been reversed with a credit to retained earnings.

ii. Fair valuation of equity investments

The company holds investment in Equity Shares of entities other than subsidiaries, associate and joint venture. Under previous GAAP such investments were measured at cost less provision for other than temporary nature diminution in the value of investment.

Under Ind AS, these investments has been measured at fair value. The company has categorized these investments as fair value through profit and loss (FVTPL) and any changes in fair value of those investment has been recognized in the statement of profit and loss.

iii. Fair valuation of security deposits

Under the previous GAAP, interest free lease security deposits assets (that are refundable in cash on completion of the contract term) are recorded at their transaction value. Under Ind AS, all financial assets are required to be recognized at fair value at initial recognition and subsequently at amortized cost. Accordingly, The company has fair valued these security deposits under Ind AS. Difference between the fair value and transaction value of the security deposit has been recognized as prepaid rent.

Under the previous GAAP, interest free lease security deposits liability (that are refundable in cash on completion of the contract term) are recorded at their transaction value. Under Ind AS, these financial liabilities are required to be recognized at fair value at initial recognition and subsequently at amortized cost. Accordingly, The company has fair valued these security deposits under Ind AS. Difference between the fair value and transaction value of the security deposit has been recognized as advance rent.

iv. Reclassification of leases

Under Previous GAAP due to no availability of guidance on how land leases should be classified, the company has capitalized the leasehold land with the initial cost incurred to enter into the lease agreement along with the upfront payment of future lease rent. Annual lease rent payment were charged to the profit and loss on annual basis.

Under Ind AS, land lease has been classified into finance and operating leases. In cases where land leases has been classified as finance lease on the basis of factors such as renewal right with the company, etc., finance lease obligations has been recognized for the future lease rent payable over the primary period of lease with corresponding impact to the retained earnings as these lands were already revalued at their fair value under previous GAAP.

In cases where land leases has been classified as operating leases, carrying value of the respective leasehold land has been reclassified to prepaid rent from property, plant and equipments.

v. Other GAAP adjustments

Other GAAP adjustments include adjustment related to remeasurnment and recognition of certain assets and liabilities in accordance with Ind AS which are not material in nature.

vi. Proposed Dividend including dividend tax

Under the previous GAAP, dividends proposed by the board of directors after the balance sheet date but before the approval of the financial statements were considered as adjusting events. Accordingly, provision for proposed dividend was recognized as a liability. Under Ind AS, such dividends are recognized when the same is approved by the shareholders in the general meeting. Accordingly, the liability for proposed dividend included under provisions has been reversed with corresponding adjustment to retained earnings.

vii. Tax effects of adjustments

Additional deferred tax asset/(liability) has been recognized corresponding to the adjustments to retained earnings/profit and loss as a result of Ind AS Implementation.

viii. Remeasurement of Post-employment benefit obligations (Net of Tax)

Under Ind AS, all items of income and expense recognized in a period should be included in profit and loss for the period, unless a standard requires or permits otherwise. Items of income and expense that are not recognized in profit and loss but are shown in the statement of profit and loss as ''other comprehensive income'' includes remeasurements of defined benefit plans. The concept of other comprehensiveincomedidnotexistunderpreviousGAAP.Accordingly,lossonremeasurementsofpost-employmentbenefitobligation has been reclassified to the Other Comprehensive Income for the period.

7. The financial statements were authorized for issue by the Board of Directors on 30th May, 2017.


Mar 31, 2014

1. (A) Contingent Liabilities and commitments (to the extent not provided) -

(i) Claims against the Company pending appellate/judicial decisions not acknowledged as debts :

(a) Value Added tax Rs. 38.76 Million (2013 - Rs. 20.08 Million)

(b) Income-tax Rs. 717.50 Million (2013 - Rs. 603.90 Million)

(c) tax deducted at source Rs. 28.87 Million (2013 - Rs. 14.16 Million)

(d) service tax Rs. 132.60 Million (2013 - Rs. 103.71 Million)

(e) property tax Rs. 50.43 Million (2013 - Rs. 5.93 Million)

(f) entertainment tax Rs. 4.31 Million (2013 - Rs. 10.45 Million)

(g) Customs duty Rs. 429.66 Million (2013 - Rs. 429.66 Million)

(h) employees state Insurance dues Rs. nil (2013 - Rs. 1.57 Million) (i) excise duty Rs. 99.07 Million (2013 - Rs. 99.07 Million) (j) others Rs. 13.48 Million (2013 - Rs. 15.36 Million)

(ii) Guarantees :

a. Guarantees given to Banks & Financial Institutions for Rs. 1,199.19 Million (2013 - Rs. 1,086.89 Million) against financial facilities availed by the subsidiary companies.

b. Counter guarantees issued to banks and remaining outstanding Rs. 199.45 Million (2013 - Rs. 32.72 Million).

(B) Commitments:

a. the estimated amount of contracts remaining to be executed on capital account and not provided for net of advances Rs. 581.64 Million (2013 - Rs. 602.23 Million).

b. Investment commitment in subsidiary and joint venture companies Rs. 365.63 Million (2013 - Rs. 424.63 Million)

2. the Company sold part of its shareholding in Mercury Car rentals Limited (MCrL) to the other joint venture partner on 30.09.2013. the profit arising from this sale has been shown as exceptional item during the year ended 31.03.2014. As a result of this sale Company''s ownership interest in MCrL was reduced from 66.67% to 40% and MCrL ceased to be a subsidiary of the Company with effect from 30.09.2013. subsequently, with effect from 17.01.2014 MCrL was converted to a private limited company.

3. details of dues to Micro enterprises and small enterprises as Defined under Micro, small & Medium enterprises development Act, 2006 are given below. this is based on information made available to the Company.

4. (a) Freehold/Leasehold Land of perpetual nature and Buildings at some locations were revalued on 31st March, 1982 and 31st March, 1993 resulting in a surplus of Rs. 2,863.88 Million which is included in the original cost. the valuation was carried out by an approved valuer on the basis of depreciated replacement cost. the surplus was transferred to revaluation reserve.

(b) Buildings include construction cost of 850 car parking spaces amounting to Rs. 292.81 Million which as per the lease agreement dated 4th May, 2001 with MMrd Authority will have to be transferred to the said Authority through a licence agreement for a licence fee of re.1 per annum as a condition precedent to the lease of the land for the Company''s hotel in Mumbai known as trident, Bandra Kurla.

(c) By virtue of West Bengal estate Land Acquisition Act, 1953, the Company became the owner of Leasehold Land of erstwhile the oberoi, Mount everest at darjeeling which has been included in Freehold Land during the year at a nominal value.

5. (a) depreciation has been provided for in the Accounts on "straight Line Method" at the rates prescribed in schedule XIV to the Companies Act, 1956 except for Specific assets which are depreciated over the useful lives of the assets, which are not less than those prescribed under the Companies Act, 1956.

(b) depreciation for the year as per Fixed Assets schedule (note-12) includes Rs. 29.99 Million (2013 - Rs. 29.99 Million) being depreciation on the increased value of building due to the effect of revaluation and, accordingly, the same has been adjusted from revaluation reserve Account.

6. Fixed Assets acquired under finance lease amounted to Rs. 369.20 Million (2013 - Rs. 391.32 Million) being assets acquired between 1st April, 2001 to 31st March, 2014. these include an amount of Rs. 26.03 Million (2013 - Rs. 32.74 Million) being assets acquired during the year under finance lease and capitalised in line with the requirements of Accounting standard (As-19). depreciation for the year includes an amount of Rs. 84.45 Million (2013 - Rs. 120.93 Million) being depreciation charged on these assets.

7. disclosures in respect of Company''s operating lease arrangements entered on or after 1st April, 2001 under Accounting standard (As-19) on Leases.

8. In the case of Mashobra resort Limited ("MrL"), several disputes with the Government of Himachal pradesh, the joint venture partner, were referred by the High Court of Himachal pradesh on 17th december, 2003 to an arbitral tribunal consisting of a single arbitrator whose award has been challenged by both the Company and MrL, amongst others. the operation of the arbitration award has been stayed pending substantive hearing of the applications by the High Court. Consequently, the status quo ante of the entire matter stands restored to the position as on 17th december, 2003 and the hotel is being operated by MrL accordingly. the Company vide its letter dated 4th April, 2012 requested MrL to account for the entire amount of Rs. 1,361.93 Million provided to MrL upto 31st March, 2012 as ''Advance towards equity'', including Rs. 130.00 Million being the opening balance of ''Advance towards equity''. In view of the above, the Company has shown the said amount of Rs. 1,361.93 Million as ''Advance towards equity'' in its books.

An extraordinary general meeting of MrL was called on 14.10.2010 to pass a resolution for issue and offer of equity shares of MrL to the Company against the above advance for shares. the Government of Himachal pradesh obtained a stay order from the High Court of Himachal pradesh and the passing of the said resolution was deferred by the High Court. Consequently the issue of equity shares against the said advance has become subjudice and dependent upon the resolution of the legal cases.

ML is earning profits in the last couple of years and has proposed dividend for the year 2013-14. It also has accumulated funds of Rs. 310.48 Million in fixed deposit pursuant to Court direction.

9. (a) Inventory of provision, Wines & others includes stock of paper, Ink etc. at year end Rs. 69.66 Million (2013 - Rs. 56.92 Million) (b) Consumption of provisions, Wines and others includes consumption of paper, Ink etc. Rs. 356.74 Million (2013 - Rs. 325.62 Million)

10. segment reporting :

There are no reportable segments other than hotels as per Accounting standard (As-17) on segment reporting.

11. the previous year''s figures have been regrouped, rearranged and reclassified wherever necessary. Amounts and other disclosures for the preceding year are included as an integral part of the current financial statements and are to be read in relation to the amounts and other disclosures relating to the current year.


Mar 31, 2013

1 EXTRAORDINARY ITEMS

L&T Bangalore Airport Hotel Limited (BAHL), a joint venture with L&T Urban Infrastructure Limited started construction of a hotel on the land alloted by Bangalore International Airport Limited (BIAL) pursuant to the Framework Agreement with them. The same had to be abandoned due to extraordinary circumstances involving refusal by Airport Authority of India (AAI) to permit the agreed height of the building as per Framework Agreement. BIAL also failed to honour their commitment to give additional land to compensate the reduction in height. BAHL went for arbitration proceedings and the Arbitral Tribunal gave the award directing BIAL to take over the incomplete building and pay compensation fixed by the Tribunal. BAHL has accounted for the award and the resultant loss in its account for the year ended 31.03.13. Consequently, there is a diminution in value of Company''s investments to the extent of Rs. 116.96 million, being loss due to extraordinary unusual events.

2. Contingent Liabilities and commitments (to the extent not provided)

(A) Contingent Liabilities not provided for in respect of :

(i) Claims against the Company pending appellate/judicial decisions not acknowledged as debts :

(a) Value Added Tax Rs. 20.08 Million (2012 - Rs. 25.92 Million)

(b) Income Tax Rs. 603.90 Million (2012 - Rs. 528.18 Million)

(c) Tax Deducted at Source Rs. 14.16 Million (2012 - Rs. 25.88 Million)

(d) Service Tax Rs. 103.71 Million (2012 - Rs. 64.03 Million )

(e) Property Tax Rs. 5.93 Million (2012 - Rs. 75.36 Million)

(f) Entertainment Tax Rs. 10.44 Million (2012 - Rs. 11.62 Million)

(g) Customs Duty Rs. 429.66 Million (2012 - Rs. 429.66 Million)

(h) Employees State Insurance dues Rs. 1.57 Million ( 2012 - Rs. 12.61 Million)

(i) Excise Duty Rs. 99.07 Million (2012 - Rs. 99.07 Million)

(j) Others Rs. 15.36 Million (2012 - Rs. 22.45 Million)

(ii) Guarantees :

a. Guarantees given to Banks & Financial Institutions for Rs. 1,089.89 Million (2012 - Rs. 1,591.00 Million) against financial facilities availed by the subsidiary companies.

b. Counter guarantees issued to banks and remaining outstanding Rs. 32.72 Million (2012 - Rs. 30.31 Million).

(B) Commitments:

a. The estimated amount of contracts remaining to be executed on capital account and not provided for net of advances Rs. 602.23 Million (2012 - Rs. 340.23 Million).

b. Investment commitment in subsidiary companies Rs. 424.63 Million (2012 - Rs. 353.92 Million)

3. Details of dues to Micro Enterprises and Small Enterprises as defined under Micro, Small & Medium Enterprises Development Act, 2006 are given below. This is based on information made available to the Company.

4. (a) Freehold/Leasehold Land of perpetual nature and Buildings at some locations were revalued on 31st March, 1982 and 31st March, 1993 resulting in a surplus of Rs. 2,863.88 Million which is included in the original cost. The valuation was carried out by an approved valuer on the basis of depreciated replacement cost. The nature of indices was not mentioned in the report. The surplus was transferred to Revaluation Reserve.

(b) Buildings include construction cost of 850 car parking spaces amounting to Rs. 292.81 Million which as per the lease agreement dated 4th May, 2001 with MMRD Authority will have to be transferred to the said Authority through a licence agreement for a licence fee of Rs. 1 per annum as a condition precedent to the lease of the land for the Company''s hotel in Mumbai known as Trident, Bandra Kurla.

5. (a) Depreciation has been provided for in the Accounts on "Straight Line Method" at the rates prescribed in Schedule XIV to the Companies Act, 1956 except for specific assets which are depreciated over the useful lives of the assets, which are not less than those prescribed under the Companies Act, 1956.

(b) Depreciation for the year as per Fixed Assets Schedule (Note-12) includes Rs. 29.99 Million (2012 - Rs. 29.99 Million) being depreciation on the increased value of building due to the effect of revaluation and, accordingly, the same has been adjusted from Revaluation Reserve Account.

6. Fixed Assets acquired under finance lease amounted to Rs. 391.32 Million (2012 - Rs. 390.41 Million) being assets acquired between 1st April, 2001 to 31st March, 2013. These include an amount of Rs. 32.74 Million (2012 - Rs. 44.32 Million ) being assets acquired during the year under finance lease and capitalised in line with the requirements of Accounting Standard (AS-19). Depreciation for the year includes an amount of Rs. 120.93 Million (2012 - Rs. 103.43 Million) being depreciation charged on these assets.

7. Disclosures in respect of Company''s operating lease arrangements entered on or after 1st April, 2001 under Accounting standard (As-19) on Leases.

a) The Company gives shops located at various hotels on operating lease arrangements. These leases are generally not non- cancellable in nature and may generally be terminated by either party by serving a notice. some shops have been given under non-cancellable operating lease, the future minimum lease payments recoverable by the company are as under:-

b) The Company has entered into operating lease arrangements primarily for office premises, site offices, airport/flight services and residential premises for its employees. these leases are generally not non-cancellable in nature and may generally be terminated by either party by serving a notice. the future minimum lease payments payable by the company for office space taken under non-cancellable operating lease, are as under:-

8. In the case of Mashobra Resort Limited ("MRL"), several disputes with the Government of Himachal Pradesh, the joint venture partner, were referred by the High Court of Himachal Pradesh on 17th December, 2003 to an arbitral tribunal consisting of a single arbitrator whose award has been challenged by both the Company and MRL, amongst others. The operation of the arbitration award has been stayed pending substantive hearing of the applications by the High Court. Consequently, the status quo ante of the entire matter stands restored to the position as on 17th December, 2003 and the hotel is being operated by MRL accordingly. The Company vide its letter dated 4th April, 2012 requested MRL to account for the entire amount of Rs. 1,361.93 Million provided to MRL upto 31st March, 2012 as ''Advance Towards Equity'', including Rs. 130.00 Million being the opening balance of ''Advance Towards Equity''. In view of the above, the Company has shown the said amount of Rs. 1,361.93 Million as ''Advance Towards Equity'' in its books.

An extraordinary general meeting of MRL was called on 14.10.2010 to pass a resolution for issue and offer of equity shares of MRL to the Company against the above advance for shares. The Government of Himachal Pradesh obtained a stay order from the High Court of Himachal Pradesh and the passing of the said resolution was deferred by the High Court. Consequently the issue of equity shares against the said advance has become subjudice and dependent upon the resolution of the legal cases.

MRL is earning profits in the last couple of years and has accumulated funds of Rs. 247.51 Million in fixed deposit pursuant to Court direction.

9. The Company has calculated its tax liability after considering Minimum Alternate Tax (MAT). MAT credit entitlement has been shown under Long Term Loans & Advances.

10. (a) Inventory of Provision, Wines & Others includes Stock of Paper, Ink etc. at year end Rs. 56.92 Million (2012 - Rs. 58.42 Million)

(b) Consumption of Provisions, Wines and Others includes consumption of Paper, Ink etc. Rs. 325.62 Million (2012 - Rs. 355.60 Million)

11. segment Reporting :

There is no reportable segment other than hotel as per Accounting standard (As-17) on segment Reporting.

a) Contingent liability that EIH Limited has incurred in relation to its interests in joint ventures and its share in each of the contingent liabilities which have been incurred jointly with other venturers :-

Guarantees given to Banks & Financial Institutions for Rs. nil (2012 - Rs. 610.00 Million) against financial facilities availed by the jointly controlled entities.

b) EIH Limited''s share of the contingent liabilities of the joint ventures themselves: Rs. 141.55 Million (2012 - Rs. 12.98 Million)

c) EIH Limited is not liable for the liabilities of the other venturers of any joint venture.

d) EIH Limited has a capital commitment for Rs. 260.20 Million (2012 - Rs. nil) in relation to its interest in joint ventures and there are no other capital commitments that have been incurred jointly with other venturer.

e) EIH Limited''s share of capital commitments of the joint ventures themselves amounts to Rs. 171.05 Million (2012 - Rs. 162.18 Million).

12. The previous year''s figures have been regrouped, rearranged and reclassified wherever necessary. Amounts and other disclosures for the preceding year are included as an integral part of the current financial statements and are to be read in relation to the amounts and other disclosures relating to the current year.


Mar 31, 2012

1. Contingent Liabilities and commitments (to the extent not provided)

(A) Contingent Liabilities not provided for in respect of :

(i) Claims against the Company pending appellate/judicial decisions :

(a) Value Added tax Rs. 25.92 Million (2011 - Rs. 31.17 Million)

(b) Income tax Rs. 528.18 Million (2011 - Rs. 593.62 Million)

(c) Tax deducted at source Rs. 25.88 Million (2011 - Rs. 14.62 Million)

(d) Service tax Rs. 64.03 Million (2011 - Rs. 50.38 Million )

(e) Property tax Rs. 75.36 Million (2011 - Rs. 7.40 Million)

(f) Entertainment tax Rs. 11.62 Million (2011 - Rs. 12.93 Million)

(g) Customs duty Rs. 429.66 Million (2011 - Rs. 429.66 Million) (h) esi dues Rs. 12.61 Million ( 2011 - Rs. 12.22 Million)

(i) Excise duty Rs. 99.07 Million (2011 - Rs. 35.33 Million) (j) others Rs. 22.45 Million (2011 - Rs. 14.92 Million)

(ii) Guarantees :

a. Guarantees given to Banks & Financial institutions for Rs. 1,591.00 Million (2011 - Rs. 1,947.00 Million) against financial facilities availed by the subsidiary companies.

b. Counter guarantees issued to banks and remaining outstanding Rs. 30.31 Million (2011 - Rs. 128.91 Million).

(B) Commitments:

a. The estimated amount of contracts remaining to be executed on capital account and not provided for net of advances Rs. 340.23 Million (2011 - Rs. 357.28 Million).

b. Investment in EIH international Limited, a wholly owned subsidiary Rs. 353.92 Million (2011 - Rs. Nil)

2. The Company issued 178,615,442 equity shares of Rs. 2 each on rights basis at a premium of Rs. 64 per share. These shares were allotted on 26th March, 2011 and the total proceeds of the rights issue were Rs. 11,788.62 Million the Gratuity expenses have been recognised in "Contribution to provident Fund and other Funds" and Leave encashment in "salaries & Wages".

3. (a) Freehold/Leasehold Land of perpetual nature and Buildings at some locations were revalued on 31st March, 1982 and 31st March, 1993 resulting in a surplus of Rs. 2,863.88 Million which is included in the original cost. The valuation was carried out by an approved valuer on the basis of depreciated replacement cost. the nature of indices was not mentioned in the report. The surplus was transferred to revaluation reserve.

(b) Buildings include construction cost of 850 car parking spaces amounting to Rs. 292.81 Million which as per the lease agreement dated 4th May, 2001 with MMrd Authority will have to be transferred to the said Authority through a licence agreement for a licence fee of Rs. 1 per annum as a condition precedent to the lease of the land for the Company's hotel in Mumbai known as trident, Bandra Kurla.

4. (a) depreciation has been provided for in the Accounts on "straight Line Method" at the rates prescribed in schedule XIV to the Companies Act, 1956 except for specific assets which are depreciated over the useful lives of the assets, which are not less than those prescribed under the Companies Act, 1956.

(b) Depreciation for the year as per Fixed Assets schedule (Note-12) includes Rs. 29.99 Million (2011 - Rs. 29.99 Million) being depreciation on the increased value of building due to the effect of revaluation and, accordingly, the same has been adjusted from revaluation reserve Account.

5. Fixed Assets acquired under finance lease amounted to Rs. 390.41 Million (2011 - Rs. 379.52 Million) being assets acquired between 1st April, 2001 to 31st March, 2012. these include an amount of Rs. 44.32 Million (2011 - Rs. 56.30 Million) being assets acquired during the year under finance lease and capitalised in line with the requirements of Accounting standard (As-19). depreciation for the year includes an amount of Rs. 103.43 Million (2011 - Rs. 48.46 Million) being depreciation charged on these assets.

6. Disclosures in respect of Company's operating lease arrangements entered on or after 1st April, 2001 under Accounting standard (As-19) on Leases.

(a) General description of the Company's operating lease arrangements :

The Company has entered into operating lease arrangements primarily for office premises, site offices, airport/fight services and residential premises for its employees. some of the significant terms and conditions of the arrangements are :

– Agreements are not non-cancellable in nature and may generally be terminated by either party by serving a notice;

– The lease arrangements which are not non cancellable are generally renewable by mutual consent on mutually agreeable terms.

(b) The Company has given shops on rental basis which are not non cancellable and can be terminated by either party by serving a notice.

(c) Rent in respect of the above is charged/credited to the statement of profit and Loss.

7. In the case of Mashobra resort Limited ("MRL"), several disputes with the Government of Himachal pradesh, the joint venture partner, were referred by the High Court of Himachal pradesh on 17th December, 2003 to an arbitral tribunal consisting of a single arbitrator whose award has been challenged by both the Company and MRL, amongst others. the operation of the arbitration award has been stayed pending substantive hearing of the applications by the High Court. Consequently, the status quo ante of the entire matter stands restored to the position as on 17th December, 2003 and the hotel is being operated by MRL accordingly. the Company vide its letter dated 4th April, 2012 requested MRL to account for the entire amount of Rs. 1,361.93 Million provided to MRL upto 31st March, 2012 as 'Advance towards equity', including Rs. 130.00 Million being the opening balance of 'Advance towards equity'. In view of the above, the Company has shown the said amount of Rs. 1,361.93 Million as 'Advance towards equity' in its books.

An extraordinary general meeting of MRL was called on 14.10.2010 to pass a resolution for issue and offer of equity shares of MRL to the Company against the above advance for shares. the Government of Himachal pradesh obtained a stay order from the High Court of Himachal pradesh and the passing of the said resolution was deferred by the High Court. Consequently the issue of equity shares against the said advance has become subjudice and dependent upon the resolution of the legal cases.

However, MRL has now started earning profits in the last couple of years and has accumulated funds of Rs. 184.52 Million in fixed deposit pursuant to Court direction.

7. The Company has calculated its tax liability after considering Minimum Alternate tax (MAT). this has resulted in an additional expense of Rs. 260.24 Million and balance carried forward is to be set off against any future liability. MAT credit entitlement has been shown under Long term Loans & Advances.

Auditors remuneration excludes Rs. 6.62 Million paid to auditors during the year ended 31st March, 2011 for services rendered in connection with the rights issue and debited to securities premium Account.

8. The Company and L&T urban infrastructure Limited, the two joint venture partners in L&T Bangalore Airport Hotel Limited (BAHL), had decided to terminate the joint venture, by transfer of the shareholding to a prospective buyer. The negotiation with the buyer is still continuing. in the opinion of the Company, the cost at which the investment in BAHL appears in the Balance sheet of the Company, will be recovered in full.

a) Contingent liability that EIH Limited has incurred in relation to its interests in joint ventures and its share in each of the contingent liabilities which have been incurred jointly with other venturers :- Guarantees given to Banks & Financial institutions for Rs. 610.00 Million (2011 - Rs. 1,024.00 Million) against financial facilities availed by the jointly controlled entities.

b) EIH Limited's share of the contingent liabilities of the joint ventures themselves: Rs. 12.98 Million (2011 - Rs. 39.95 Million)

c) EIH Limited is not liable for the liabilities of the other venturers of any joint venture.

d) There are no capital commitments of EIH Limited in relation to its interest in joint ventures and there are no capital commitments that have been incurred jointly with other venturer.

e) EIH Limited's share of capital commitments of the joint ventures themselves amounts to Rs.162.18 Million (2011 - Rs. 414.65 Million).

9. The previous year's figures have been regrouped, rearranged and reclassified wherever necessary. Amounts and other disclosures for the preceding year are included as an integral part of the current financial statements and are to be read in relation to the amounts and other disclosures relating to the current year.


Mar 31, 2011

1. the estimated amount of contracts remaining to be executed on capital account and not provided for net of advances Rs. 357.28 Million (2010 - Rs. 597.03 Million).

2. Contingent Liabilities not provided for in respect of -

(i) Claims against the Company pending appellate/judicial decisions :

(a) sales tax Rs. 31.17 Million (2010 - Rs. 24.64 Million)

(b) income tax Rs. 593.62 Million (2010 - Rs. 572.07 Million)

(c) tax deducted at source Rs. 14.62 Million (2010 - Rs. Nil)

(d) service tax Rs. 50.38 Million (2010 - Rs. Nil)

(e) property tax Rs. 7.40 Million (2010 - Rs. 170.64 Million)

(f) entertainment tax Rs. 12.93 Million (2010 - Rs. 9.65 Million)

(g) Customs duty Rs. 429.66 Million (2010 - Rs. 452.50 Million) (h) esi dues Rs. 12.22 Million (2010 - Rs. 11.12 Million)

(i) excise duty Rs. 35.33 Million (2010 - Rs. 19.49 Million)

(j) others Rs. 14.92 Million (2010 - Rs. 21.47 Million)

(ii) Guarantees given to Banks & Financial institutions for Rs. 1,947.00 Million (2010 - Rs. 2,249.50 Million) against financial facilities availed of by the subsidiary, joint venture and associate companies.

(iii) Counter guarantees issued to banks and remaining outstanding Rs. 128.91 Million (2010 - Rs. 14.27 Million)

3. the Company issued 178,615,442 equity shares of Rs. 2 each on rights basis at a premium of Rs. 64 per share. these shares were allotted on 26th March, 2011 and the total proceeds of the rights issue was Rs. 11,788.62 Million. Accordingly, share Capital of the Company has gone up by Rs. 357.23 Million and securities premium has gone up by Rs. 11,431.39 Million. expenses incurred in relation to the rights issue, Rs. 111.14 Million have been written off against securities premium.

4. (i) the Company accounted for Rs. 967.60 Million and Rs. 526.76 Million under the head "other income” during the Financial Years 2008-09 and 2009-10 respectively, on estimated basis on account of claims for loss of Profit due to business interruption caused by terrorist attack on 26th November, 2008 in Mumbai. during the year, the insurance Company fnally assessed the claim at Rs. 1,124.53 Million. Accordingly the resultant defcit of Rs. 369.83 Million has been treated as exceptional loss.

(ii) the claim of the Company for material damage caused by terrorist attack on 26th November, 2008 in Mumbai has been assessed by the insurance Company at Rs. 174.22 Million on replacement value basis. the net book value of the assets damaged was Rs. 107.17 Million. the resultant surplus of Rs. 67.05 Million has been treated as exceptional income.

5. details of dues to Micro enterprises and small enterprises as defned under Micro, small & Medium enterprises development Act, 2006 are given below. this is based on information made available to the Company.

6. Fixed deposits & 7 Year National savings Certifcates aggregating to Rs. 13.38 Million (2010 - Rs. 20.17 Million) have been lodged with the Banks/Government Authorities for obtaining guarantees or as security deposits.

7. (a) Freehold/Leasehold Land of perpetual nature and Buildings at some locations were revalued on 31st March, 1982 and 31st March, 1993 resulting in a surplus of Rs. 2,863.88 Million which is included in the original cost. the valuation was carried out by an approved valuer on the basis of depreciated replacement cost. the nature of indices was not mentioned in the report. the surplus was transferred to revaluation reserve.

(b) Buildings include construction cost of 850 car parking spaces amounting to Rs. 292.81 Million which as per the lease agreement dated 4th May, 2001 with MMrd Authority will have to be transferred to the said Authority through a licence agreement for a licence fee of re. 1 per annum as a condition precedent to the lease of the land for the Companys hotel in Mumbai known as trident, Bandra Kurla.

8. (a) depreciation has been provided for in the Accounts on "straight Line Method” at the rates prescribed in schedule xiv to the Companies Act, 1956 except for specifc assets which are depreciated over the useful lives of the assets, which are not less than those prescribed under the Companies Act, 1956.

(b) depreciation for the year as per Fixed Assets schedule (schedule-6) includes Rs. 29.99 Million (2010 - Rs. 29.99 Million) being depreciation on the increased value of building due to the effect of revaluation and, accordingly, the same has been adjusted from revaluation reserve Account.

9. Fixed Assets acquired under fnance lease amounted to Rs. 379.52 Million (2010 - Rs. 346.77 Million) being the assets acquired between 1st April, 2001 to 31st March, 2011. these include an amount of Rs. 56.30 Million (2010 - Rs. 32.39 Million) being assets acquired during the year under fnance lease and capitalised in line with the requirements of Accounting standard (As-19). depreciation for the year includes an amount of Rs. 48.46 Million (2010 - Rs. 42.08 Million) being depreciation charged on these assets.

10. disclosures in respect of Companys operating lease arrangements entered on or after 1st April, 2001 under Accounting standard (As-19) on Leases.

(a) General description of the Companys operating lease arrangements : the Company has entered into operating lease arrangements primarily for offce premises, site offces, airport/fight services and residential premises for its employees. some of the signifcant terms and conditions of the arrangements are :

- agreements are not non-cancellable in nature and may generally be terminated by either party by serving a notice;

- the lease arrangements which are not non-cancellable are generally renewable by mutual consent on mutually agreeable terms.

(b) the Company has given shops on rental basis which are not non cancellable and can be terminated by either party by serving a notice.

(c) rent in respect of the above are charged/credited to the Profit and Loss Account.

11. investments held by the Company which are long term in nature are stated at cost unless there is any permanent diminution in value where provision for diminution is made on individual investment basis. earnings on investments are accounted for on accrual basis.

12. inventories are valued at cost which is based on First-in-First-out method or net realisable value, whichever is lower. unserviceable / damaged / discarded stocks and shortages are charged to the Profit and Loss Account.

13. in the case of Mashobra resort Limited ("MrL”), several disputes with the Government of Himachal pradesh, the joint venture partner, were referred by the High Court of Himachal pradesh on 17th december, 2003 to an arbitral tribunal consisting of a single arbitrator whose award has been challenged by both the Company and MrL, amongst others. the operation of the arbitration award has been stayed pending substantive hearing of the applications by the High Court. Consequently, the status quo ante of the entire matter stands restored to the position as on 17th december, 2003 and the hotel is being operated by MrL accordingly. the Company vide its letter dated 4th April, 2011 requested MrL to account for the entire amount of Rs. 1,293.03 Million provided to MrL upto 31st March, 2011 as ‘Advance towards equity, including Rs. 130.00 Million being the opening balance of ‘Advance towards equity. in view of the above, the Company has shown the said amount of Rs. 1,293.03 Million as ‘Advance towards equity in its books. Considering this and the intrinsic value of the hotel property, the ‘Advance towards equity in MrL has been considered good.

14. interest debited to the Profit and Loss Account is net of interest capitalised amounting to Rs. 17.73 Million (2010 - Rs. 253.14 Million).

15. the Company has calculated its tax liability after considering Maximum Alternative tax (MAt). this has not resulted in an additional expense as MAt is to be set off against any future tax liability and accordingly MAt credit entitlement has been shown under Loans & Advances in the Balance sheet.

16. the Company is not required to give any quantitative and value-wise information in respect of purchase, consumption, turnover, stocks etc. as the same is exempted vide Notifcation No. s.o. 301(e) dated 8th February, 2011 issued under section 211(3) of the Companies Act, 1956 by the Ministry of Corporate Affairs, Government of india.

17. in respect of printing business, the installed printing capacity as on 31st March, 2011 was 850 Million standard impressions (2010 – 850 Million). the actual production during the year was 690 Million standard impressions (2010 – 575 Million). the installed printing capacity and actual production have have been certifed by the management and relied upon by the Auditors, being a technical matter.

18. (a) inventory of provision, Wines & others includes stock of paper, ink etc. at year end Rs. 57.19 Million (2010 - Rs. 50.87 Million)

(b) Consumption of provisions, Wines and others includes consumption of paper, ink etc. Rs. 382.28 Million (2010 - Rs. 402.27 Million)

19. the Company and L&t urban infrastructure Limited, the two joint venture partners in L&t Bangalore Airport Hotel Limited (BAHL), have decided, subsequent to Balance sheet date, to terminate the joint venture, by transfer of the shareholding to a prospective buyer. in the opinion of the Company, the cost at which the investment in BAHL appears in the Balance sheet of the Company will be recovered in full.

20. the details of transactions entered into with related parties during the year are as follows:

NAMES OF THE RElATED PARTIES

(I) Subsidiary companies country of

Incorporation

(i) Mercury Car rentals Limited india

(ii) Mashobra resort Limited india

(iii) oberoi Kerala Hotels and resorts Limited india

(iv) Mumtaz Hotels Limited india

(v) eiH Flight services Limited Mauritius

(vi) eiH international Ltd. British virgin islands

(vii) eiH Holdings Limited British virgin islands

(viii) eiH Marrakech Ltd. British virgin islands

(ix) J&W Hongkong Ltd Hongkong

(x) oberoi turtle Bay Ltd. Mauritius

(xi) eiHH Corporation Ltd. Hongkong

(xii) eiH investments Nv Netherlands Antilles

(xiii) eiH Management services Bv the Netherlands

(xiv) pt Widja putra Karya indonesia

(xv) pt Waka oberoi indonesia indonesia

(xvi) pt Astina Graha ubud indonesia

(II) Associates & Joint Ventures

(i) EIH Associated Hotels Limited india

(ii) L & t Bangalore Airport Hotel Limited india

(iii) Golden Jubilee Hotels Limited india

(iv) oberoi Mauritius Ltd. British virgin islands

(III) Enterprises in which key Management Personnel have signifcant infuence

(i) oberoi Hotels private Limited india

(ii) oberoi properties private Limited india

(iii) oberoi Holdings private Limited india

(iv) oberoi investments private Limited india

(v) oberoi Buildings and investments private Limited india

(vi) oberoi plaza private Limited india

(vii) Bombay plaza private Limited india

(viii) oberoi Leasing & Finance Company private Limited india

(ix) Aravali polymers LLp india

(x) island Hotel Maharaj Limited india

(IV) key Management Personnel

(i) Mr. p.r.s. oberoi - Chairman & Chief executive

(ii) Mr. s.s. Mukherji - vice Chairman

(iii) Mr. v.s. oberoi - Chief operating officer and Joint Managing director

(iv) Mr. A.s. oberoi - Chief planning officer and Joint Managing director

a) Contingent liability that eiH Limited has incurred in relation to its interests in joint ventures and its share in each of the contingent liabilities which have been incurred jointly with other venturers :- Guarantees given to Banks and Financial institutions for Rs. 1,024.00 Million (2010 - Rs. 1,150.00 Million) against financial facilities availed by the jointly controlled entities.

b) eiH Limiteds share of the contingent liabilities of the joint ventures themselves : Rs. 39.95 Million (2010 - Rs. 11.87 Million).

c) eiH Limited is not liable for the liabilities of the other venturers of any joint venture.

d) there are no capital commitments of eiH Limited in relation to its interest in joint ventures and there are no capital commitments that have been incurred jointly with other venturers.

e) eiH Limiteds share of capital commitments of the joint ventures themselves amounts to Rs. 414.65 Million (2010 - Rs. 209.42 Million).

21. the previous years fgures have been regrouped, rearranged and reclassifed wherever necessary. Amounts and other disclosures for the preceding year are included as an integral part of the current financial statements and are to be read in relation to the amounts and other disclosures relating to the current year.


Mar 31, 2010

1. (a) The oberoi, Mumbai was operational in the previous year upto 25th November, 2008. the hotel remained out of operation throughout the fnancial year ended 31st March, 2010.

(b) Trident, Bandra Kurla, Mumbai started operation from 1st december, 2009.

(c) Trident, Nariman point, Mumbai remained out of operation from 26th November, 2008 upto 20th december, 2008.

2. The estimated amount of contracts remaining to be executed on capital account and not provided for net of advances rs. 597.03 Million (2009-rs. 423.65 Million).

3. Contingent Liabilities not provided for in respect of -

(i) Claims against the Company pending appellate/judicial decisions :

(a) Sales tax rs. 24.64 Million (2009-rs. 24.52 Million)

(b) Income-tax rs. 572.07 Million (2009-rs. 394.50 Million)

(c) property tax rs. 170.64 Million (2009-rs. 217.58 Million)

(d) Entertainment tax rs. 9.65 Million (2009-rs. 9.13 Million)

(e) Customs duty rs. 452.50 Million (2009-rs. 452.50 Million)

(f) Esi claims rs. 11.12 Million (2009-rs. 3.13 Million)

(g) Excise duty rs. 19.49 Million (2009-rs. 9.86 Million) (h) others rs. 21.47 Million (2009-rs. 14.59 Million)

(ii) Guarantees given to Banks & Financial institutions for rs. 2,249.50 Million (2009-rs. 1,349.50 Million) against fnancial facilities availed of by the subsidiary, joint venture and associate companies.

4. The Company is adequately insured against damage caused by terrorist attack on its two Mumbai Hotels, i.e., trident, Nariman point, Mumbai and the oberoi, Mumbai. the insurance coverage is on replacement value basis. No fnal adjustment has been made in the books of account in respect of damage to the properties pending settlement of claim.

The Company has recognised rs. 526.76 Million (2009-rs. 967.60 Million) as income during the fnancial year on account of insurance claim for losses due to business interruption in respect of trident, Nariman point, Mumbai and the oberoi, Mumbai. Against the total claim of rs. 1,494.36 Million recognised as income by the Company, the insurance company has paid rs. 800 Million. Final settlement of the claim is pending.

5. There are no reportable amount of dues on account of principal and interest or any such payments during the year as required by Micro, small and Medium enterprises development Act, 2006, in respect of Micro enterprises and small enterprises as defned in the Act. this is based on information made available to the Company by such enterprises.

6. Fixed deposits & 7 Year National savings Certifcate aggregating to rs. 20.17 Million (2009-rs. 23.13 Million) have been lodged with the Banks/Government Authorities for obtaining guarantees or as security deposits.

7. Defned Beneft plans/Long term Compensated Absences on 31st March, 2010 as per Actuarial valuations using projected unit Credit Method and recognised in the Financial statements in respect of employee Beneft schemes:

8. (a) Freehold/Leasehold Land of perpetual nature and Buildings at some locations were revalued on 31st March, 1982 and 31st March, 1993 resulting in a surplus of rs. 2,863.88 Million which is included in the original cost. the valuation was carried out by an approved valuer on the basis of depreciated replacement cost. the nature of indices was not mentioned in the report. the surplus was transferred to revaluation reserve.

(b) Buildings include construction cost of 850 car parking spaces amounting to rs. 292.81 Million which as per the lease agreement dated 4th May, 2001 with MMrd Authority will have to be transferred to the said Authority through a licence agreement for a licence fee of re. 1 per annum.

9. (a) Depreciation has been provided for in the Accounts on “straight Line Method” at the rates prescribed in schedule xiv to

The Companies Act, 1956 except for specifc assets which are depreciated over the useful lives of the assets, which are not less than those prescribed under the Companies Act, 1956.

(b) Depreciation for the year as per the Fixed Assets schedule (schedule-6) includes rs. 29.99 Million (2009-rs. 29.99 Million) being depreciation on the increased value of building due to the effect of revaluation and, accordingly, the same has been adjusted from the revaluation reserve Account.

10. Fixed Assets acquired under fnance lease amounted to rs. 346.77 Million (2009-rs. 345.01 Million) being the assets acquired between 1st April, 2001 to 31st March, 2010. these include an amount of rs. 32.39 Million (2009-rs. 272.68 Million) being assets acquired during the year under fnance lease and capitalised in line with the requirements of Accounting standard (As-19). depreciation for the year includes an amount of rs. 42.08 Million (2009-rs. 23.64 Million) being depreciation charged on these assets.

11. Disclosures in respect of Companys operating lease arrangements entered on or after 1st April, 2001 under Accounting standard (As-19) on Leases.

(a) General description of the Companys operating lease arrangements :

The Company has entered into operating lease arrangements primarily for offce premises, site offces, airport/fight services and residential premises for its employees. some of the signifcant terms and conditions of the arrangements are :

- Agreements may generally be terminated by either party by serving a notice;

- The lease arrangements are generally renewable on the expiry of the lease period subject to mutual agreement;

- The Company shall not sublet, assign or part with the possession of the premises without prior written consent of the lessor.

(b) Rent in respect of the above are charged to the proft and Loss Account.

12. Investments held by the Company which are long term in nature are stated at cost unless there is any permanent diminution in value where provision for diminution is made on individual investment basis. earnings on investments are accounted for on accrual basis.

13. Inventories are valued at cost which is based on First-in-First-out method or net realisable value, whichever is lower. unserviceable / damaged / discarded stocks and shortages are charged to the proft and Loss Account.

14. In the case of Mashobra resort Limited (“MrL”), several disputes with the Government of Himachal pradesh, the joint venture partner, were referred by the High Court of Himachal pradesh on 17th december, 2003 to an arbitral tribunal consisting of a single arbitrator whose award has been challenged by both the Company and MrL, amongst others. the operation of the arbitration award has been stayed pending substantive hearing of the applications by the High Court. Consequently, the status quo ante of the entire matter stands restored to the position as on 17th december, 2003 and the hotel is being operated by MrL accordingly. the Company, by its letter dated 15th June, 2009, requested MrL to convert rs. 1,005.63 Million of loans provided by the Company to MrL into its equity. MrL is in the process of holding the meeting of the Board of directors for which it has requested the nominees of Himachal pradesh Government on the Board, for a suitable date for holding the meeting which is still awaited. the Company has now been legally advised to take necessary steps in this matter. in view of the above and the proposed conversion of loan into equity, loan to MrL has been considered good as the net worth of MrL will become positive on conversion.

15. Interest debited to the proft and Loss Account is net of interest capitalised amounting to rs. 253.14 Million (2009-rs. 218.34 Million).

a) Contingent liability that eiH Limited has incurred in relation to its interests in joint ventures and its share in each of the contingent liabilities which have been incurred jointly with other venturers :- Guarantees given to Banks and Financial institutions for rs. 1,150.00 Million (2009-rs. 1,110.00 Million) against fnancial facilities availed of by jointly controlled entities.

b) EIH Limiteds share of the contingent liabilities of the joint ventures themselves : rs. 11.87 Million (2009-rs. 27.61 Million).

c) EIH Limited is not liable for the liabilities of the other venturers of any joint venture.

d) There are no capital commitments of eiH Limited in relation to its interest in joint ventures and there are no capital commitments that have been incurred jointly with other venturers.

e) EIH Limiteds share of capital commitments of the joint ventures themselves amounts to rs. 209.42 Million (2009-rs. 295.41 Million).

f) CCA Leisure services private Limited has ceased to be a jointly controlled entity during the year.

16. The previous years fgures have been regrouped, rearranged and reclassifed wherever necessary. Amounts and other disclosures for the preceding year are included as an integral part of the current statements and are to be read in relation to the amounts and other disclosures relating to the current year.

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