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Notes to Accounts of Graviss Hospitality Ltd.

Mar 31, 2014

1. A Contingent Liabilities:

(a) Bank Guarantees given to the extent of Rs. 13.61 lacs (previous year Rs. 13.61 lacs).

(b) Income tax demand of Rs. 528.25 lacs. The Company has received income tax demands for the aforesaid amount in respect of Assessment years 2009-10 to 2011-12 on account of certain disallowances/additions to income and has preferred appeals with the appellate authorities /Tribunal. The Company is hopeful of getting the appellate/Tribunal order in favor and has not made any provision for the same in the financial statements.

(c) VAT demand and penalty of Rs. 88 lacs for the year 2010-11 which is contented before the Appellate Tribunal, Delhi. The Company is hopeful of getting the Tribunal order in favor and has not made any provision for the same in the financial statements.

B Capital and Other Commitments

(a) Estimated amount of contracts remaining to be executed on capital account NIL (Previous year NIL).

(b) Lease commitments are disclosed under Note B-3 below.

Note: Commitments which are material and which will result in a penalty disproportionate to the benefits involved, based on the judgment of the management are only disclosed.

2. Retirement benefit

Disclosure pursuant to Accounting Standard -15 (Revised) Employee Benefits:

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

Defined Contribution Plans:

The company has recognized contribution to Provident Fund of Rs.58.02 lacs in the Profit & Loss Account.

3. Information relating to Related Party Disclosures as per Accounting Standard issued by the Institute of Chartered Accountants of India, is given below:

A. List of Related Parties (relied on the details provided by the management):

i Shareholders/Directors

Mr Ravi Ghai, Mr Gaurav Ghai, Mr RKP Shankardass.

ii Other related parties where the common control exists

Graviss Holdings Pvt Ltd., Graviss Foods Pvt Ltd., Graviss Catering Pvt Ltd, Rich Graviss Products Private Limited, Graviss Brands Pvt Ltd., *Gaylord Pvt Ltd..Graviss Hotels & Resorts Limited, Crossword Beverages Pvt. Ltd*., Brown Hills Realty Pvt. Ltd.*

"West Hills Realty Pvt Ltd., ''Pure Ice Cream (LLC) *Baskin Robins India Pvt Ltd., "Graviss Food Solution Pvt. Ltd

"Oregon Realtys Pvt Ltd., "Perfect Live Stock Pvt Ltd., "Blue Ocean Holding Ltd.,"Pure Foods & Ice Cream, "G.L. Ice Creams, "IX. Ghai Trust,

"I.K. Ghai (Kwality Bombay) Foundation, Ghai Family Trust.

"Satinetta Finelease & Investments Pvt. Ltd., "Kwality Walls Fantasy Ltd. *PIC Gujarat Pvt Ltd. "Ambition Trading Pvt Ltd.

"Vishal Holdings Pvt Ltd., "Mayfair Hospitality Pvt Ltd, "Vanila Star Jeans (India) Pvt Ltd., "Amphitrite Investments

"Indomark Dairy & Equipments Pvt Ltd. *Kwality Real Estate Pvt Ltd.

(*no transactions during the year)

iii Managing and Joint Managing Director

Mr Ravi Ghai and Mr Gaurav Ghai

4. Amounts if any due to Micro, Small and Medium Enterprises under Micro, Small and Medium Enterprises Development Act, 2006 could not be disclosed as such parties could not be identified from the records of the Company.

13. The Company has opted for accounting the exchange difference arising on reporting of long term foreign currency monetary items in line with paras 46 and 46A Companies (Accounting Standards) Amendment Rules 2009/2011 on Accounting Standard (AS)11 notified by Government of India on March 31, 2009 and on 29th December, 2011 respectively. Accordingly an amount of Rs. NIL has been charged to Profit & Loss Account.

5. Due to losses, no provision for current tax has been made.

6. Current and non-current classification of assets and liabilities in the balance sheet has been made based on the professional judgement of the management.

7. Hospitality business is the Company''s only business segment and hence disclosure of segment-wise information is not applicable under Accounting Standard 17- ''Segment Reporting''.

8. The Company has an investment in the equity shares of Graviss Catering Private Limited, a subsidiary, with a share capital of Rs. 7.65 lacs and has also granted interest free loans to the said subsidiary of Rs. 195.80 lacs. The accumulated losses of the said subsidiary exceed its net worth. In the opinion of the management, having regard to the long term interest of the Company in the said subsidiary and considering that the subsidiary is able to get regular orders of decoration and earn sufficient margin to meet the fixed costs, there is no diminution in the value of investments and the Company is also hopeful of recovering the loan.

The Company has an investment in the equity shares of Graviss Hotels and Resorts Limited, a subsidiary, with a share capital of Rs. 5 lacs and also has granted interest free loan to the said subsidiary of Rs. 8,867.82 lacs. The accumulated losses of the said subsidiary exceed its net worth. The said subsidiary had purchased lands at various places for developing hotels. Due to change in the business plans, the subsidiary is exploring to sell these lands along with the buildings constructed so far. In the assessment of the management, the market value of the lands acquired would be more than the original cost and hence there is no diminution in the value of investment and company is also hopeful of recovering the loan

9. In the opinion of the management there are no indications that the assets of the company may be impaired as on the balance sheet date.

10. Previous year figures:

Previous year''s figures have been reclassified/regrouped wherever necessary to conform to current year''s classification / grouping. Figures in brackets are in respect of the previous year.


Mar 31, 2013

1. A Contingent Liabilities:

(a) Bank Guarantees given to the extent of Rs. 13.61 lacs (previous year Rs. 13.61 lacs).

(b) The company has received Income Tax demand of Rs. 452.22 lacs in respect of AY 2009-10 and Rs. 66.03 lacs in respect of AY 2010-

2 on account of certain disallowances / additions to income and has preferred appeals with the appellate authorities. The company is hopeful of getting the appellate orders in its favour and therefore has not made any provision for the same in the financial statements.

A Capital and Other Commitments

(a) Estimated amount of contracts remaining to be executed on capital account NIL (Previous year NIL)

(b) Lease commitments are disclosed under Note B-3 below.

Note: Commitments which are material and which will result in a penalty disproportionate to the benefits involved, based on the judgement of the management are only disclosed

3. Retirement benefit

Disclosure pursuant to Accounting Standard -15 (Revised) Employee Benefits:

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

Defined Contribution Plans:

The company has recognized contribution to Provident Fund of Rs.64.37 lacs in the Profit & Loss Account.

4. Finance Lease:

The Company has taken on finance lease, cost of assets having an aggregate value of Rs.132.30 lacs (previous year Rs. 132.30 lacs) upto March 2013 against which the future obligations aggregate to Rs. 60.22 lacs (previous year Rs.80.37 lacs) excluding the lease charge Rs. 9.62 lacs (previous year Rs. 16.33 lacs) and the same are payable as under:

5. Information relating to Related Party Disclosures as per Accounting Standard issued by the Institute of Chartered Accountants of India, is given below:

A. List of Related Parties (relied on the details provided by the management):

i Shareholders/Directors

Mr Ravi Ghai, Mr Gaurav Ghai, Mr RKP Shankardass.

ii Other related parties where the common control exists

Graviss Holdings Pvt Ltd., Graviss Foods Pvt Ltd., Graviss Catering Pvt Ltd, Rich Graviss Products Private Limited,

*Mahaniya Investments Pvt Ltd.,Graviss Hotels & Resorts Limited,Crossword Beverages Pvt. Ltd*., Brown Hills Realty Pvt. Ltd.*

*West Hills Realty Pvt Ltd., *Pure Ice Cream (LLC) *Baskin Robins India Pvt Ltd., *Graviss Food Solution Pvt. Ltd.

*Satinetta Finelease & Investments Pvt. Ltd.,* Kwality Walls Fanatasy Ltd.*PIC Gujarat Pvt Ltd. *Ambition Trading Pvt Ltd.

*Vishal Holdings Pvt Ltd., *Mayfair Hospitality Pvt Ltd, *Vanila Star Jeans (India) Pvt Ltd., *Amphitrite Investments.

*Indomark Dairy & Equipments Pvt Ltd. *Kwality Real Estate Pvt Ltd.

(*no transactions during the year)

iii Managing and Joint Managing Director

Mr Ravi Ghai and Mr Gaurav Ghai

6. Amounts if any due to Micro, Small and Medium Enterprises under Micro,Small and Medium Enterprises Development Act, 2006 could not be disclosed as such parties could not be identified from the records of the Company.

7. The Company has opted for accounting the exchange difference arising on reporting of long term foreign currency monetary items in line with paras 46 and 46A Companies (Accounting Standards) Amendment Rules 2009/2011 on Accounting Standard (AS)11 notified by Government of India on March 31, 2009 and on 29th December, 2011 respectively. Accordingly an amount of Rs. 12.14 lacs (loss) has been charged to Profit & Loss Account.

8. Provision for current tax during the year has been made on regular basis.

9. As approved by the shareholders by a special resolution in their Extra-ordinary General meeting held on 25th October, 2012, the Company bought back 1,59,25,925 equity shares of Rs. 2 each at a price of Rs. 27 per equity share for an aggregate amount of Rs. 4,300 lacs during the year by debiting share capital to the extent of Rs. 318.52 lacs and share premium to the extent of Rs. 3981.48 lacs. This buyback represented 18.42% of the issued, subscribed and paid up equity share capital of the Company. The Company has complied with the requirements of Regulation 12 (3) of the Securities and Exchange Board of India (Buyback of Securities) Regulation 1998 (as amended) and Section 77A of the Companies Act 1956. In accordance with the provisions of section 77AA of the Companies Act an amount of Rs. 318.52 lacs being the nominal value of shares bought back, has been transferred to the Capital redemption reserve account out of the profits of the Company.

10. Current and non-current classification of assets and liabilities in the balance sheet has been made based on the professional judgement of the management.

11. Hospitality business is the Company''s only business segment and hence disclosure of segment-wise information is not applicable under Accounting Standard 17- ''Segment Reporting''.

12. The Company has an investment in the equity shares of Graviss Catering Private Limited, a subsidiary, with a share capital of Rs. 7.65 lacs and has also granted interest free loans to the said subsidiary of Rs. 265.11 lacs. The accumulated losses of the said subsidiary exceed its net worth. In the opinion of the management, having regard to the long term interest of the Company in the said subsidiary and considering that the subsidiary is able to get regular orders of decoration and earn sufficient margin to meet the fixed costs, there is no diminution in the value of investments and the Company is also hopeful of recovering the loan.

The Company has an investment in the equity shares of Graviss Hotels and Resorts Limited, a subsidiary, with a share capital of Rs. 5 lacs and also has granted interest free loan to the said subsidiary of Rs. 8,502.34 lacs. The accumulated losses of the said subsidiary exceed its net worth. The said subsidiary has purchased lands at various places for developing hotels and is in the process of construction/development. In the opinion of the management, having regard to the long term interest of the Company in the subsidiary and the assessment of the management that the market value of the land acquired would be more than the original cost and that the subsidiary would be able to generate profits after it commences its operations, there is no diminution in the value of investment and company is also hopeful of recovering the loan.

13. In the opinion of the management there are no indications that the assets of the company may be impaired as on the balance sheet date.

14. Previous year figures:

Previous year''s figures have been reclassified/regrouped wherever necessary to conform to current year''s classification / grouping. Figures in brackets are in respect of the previous year.


Mar 31, 2012

1. A Contingent Liabilities:

(a) Bank Guarantees given to the extent of Rs. 13.61 lacs (previous year Rs. 236.66 lacs).

(b) Disputed property tax demand NIL (previous year Rs.259.48 lacs).

(c) The company has received Income Tax demand of Rs. 452.22 lacs in respect of AY 2009-10 on account of certain disallowances / additions to income and has preferred an appeal with the appellate authorities. The company is hopeful of getting the appellate order in its favour and therefore has not made any provision for the same in the financial statements.

B Capital and Other Commitments

(a) Estimated amount of contracts remaining to be executed on capital account NIL (Previous year NIL)

(b) Lease commitments are disclosed under Note B-3 below

Note: Commitments which are material and which will result in a penalty disproportionate to the benefits involved, based on the judgement of the management are only disclosed.

2. Retirement benefit

Disclosure pursuant to Accounting Standard -15 (Revised) Employee Benefits:

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

3. Information relating to Related Party Disclosures as per Accounting Standard issued by the Institute of Chartered Accountants of India, is given below:

A List of Related Parties (relied on the details provided by the management):

I Shareholders/Directors

Mr Ravi Ghai, Mr Gaurav Ghai, Mr. RKP Shankardass.

ii Other related parties where the common control exists

Graviss Holdings Pvt Ltd., Graviss Foods Pvt Ltd., Graviss Catering Pvt Ltd, Rich Graviss Products Private Limited,

Pure Foods & Ice Creams

'Mahaniya Investments Pvt Ltd., 'Graviss Hotels & Resorts Limited,

'Crossword Beverages Pvt. Ltd., *Brown Hills Realty Pvt. Ltd.

*ldar Hotels Pvt. Ltd., "Gaylord Pvt. Ltd., *Oregaon Realtys Pvt Ltd, 'Perfect Livestock Pvt. Ltd.,

*Satinetta Finelease & Investments Pvt. Ltd., 'Kwality Walls Fanatasy Ltd.

(*no transactions during the year)

iii Managing and Joint Managing Director

Mr Ravi Ghai and Mr Gaurav Ghai

4. Amounts if any due to Micro, Small and Medium Enterprises under Micro,Small and Medium Enterprises Development Act, 2006 could not be disclosed as such parties could not be identified from the records of the Company.

5. The Company has opted for accounting the exchange difference arising on reporting of long term foreign currency monetary items in line with paras 46 and 46A Companies (Accounting Standards) Amendment Rules 20/09/2011 on Accounting Standard (AS)11 notified by Government of India on March 31, 2009 and on 29th December, 2011 respectively. Accordingly an amount of Rs. 52.77 lacs (loss) has been charged to Profit & Loss Account.

6. Provision for current tax during the year has been made on regular basis.

7. The Company's banquet operations at Corinthians Club, Pune were sold during the year ended 31 March 2012. Profit on sale of Rs.30.46 lacs has been credited to the profit and loss account. (Loss on discontinued operations of Rs. 267 lacs for the year ended 31 March 2011).

8. Current and non-current classification of assets and liabilities in the balance sheet has been made based on the professional judgement of the management.

9. Hospitality business is the Company's only business segment and hence disclosure of segment-wise information is not applicable under Accounting Standard 17- 'Segment Reporting'.

10. The Company has an investment in the equity shares of Graviss Catering Private Limited, a subsidiary, of Rs. 7.65 lacs and has also granted interest free loans to the said subsidiary of Rs. 383.90 lacs. The accumulated losses of the said subsidiary exceed its net worth. In the opinion of the management, having regard to the long term interest of the Company in the said subsidiary there is no diminution in the value of investments and the Company is also hopeful of recovering the loan.

The Company has an investment in the equity shares of Graviss Hotels and Resorts Limited, a subsidiary, of Rs. 5 lacs and also has granted interest free loan to the said subsidiary of Rs. 10,555.67 lacs. The said subsidiary has purchased lands at various places for developing hotels and is in the process of construction / development. In the opinion of the management, having regard to the long term interest of the Company in the subsidiary and steps taken by the management to complete the projects, there is no diminution in the value of investment and company is also hopeful of recovering the loan.

11. In the opinion of the management there are no indications that the assets of the company may be impaired as on the balance sheet date.

12. Previous year figures:

Till the year ended 31st March 2011, the company was using pre-revised Schedule VI to the Companies Act, 1956, for preparation and presentation of its financial statements. During the year ended 31st March 2012, the revised Schedule VI notified under the Companies Act 1956, has become applicable to the company. The company has reclassified previous year figures to conform to this year's classification.


Mar 31, 2011

1. The Company is contingently liable in respect of:

(a) Bank Guarantees given to the extent of Rs. 236.66 lacs (previous year Rs. 509.68 lacs).

(b) Estimated amount of contracts remaining to be executed on capital account and not provided for is Rs. Nil (previous year Rs. 96.82 lacs).

(c) Disputed property tax demand Rs. 259.48 lacs (previous year Rs. 222.41 lacs).

2. Amounts if any due to Micro Enterprises, Small Enterprises and Medium Enterprises under Micro Enterprises, Small Enterprises and Medium Enterprises Development Act, 2006 could not be disclosed as such parties could not be identified from the records of the Company.

3. The Company has opted for accounting the exchange difference arising on reporting of long term foreign currency monetary items in line with Companies (Accounting Standards) Amendment Rules 2009 on Accounting Standard (AS)11 notified by Government of India on March 31, 2009. Accordingly an amount of Rs. 71.24 lacs (loss) being the balance in Foreign Currency Monetary item Translation difference account as on 31st March 2011 has been transferred to the Exchange Difference Account.

4. Retirement benefit:

Disclosure pursuant to Accounting Standard -15 (Revised) Employee Benefits: The Company has classified the various benefits provided to employees as under:

Defined Contribution Plans:

The company has recognized contribution to Provident Fund of Rs.83.34 lacs in the Profit & Loss Account.

5. Provision for current tax during the year has been made on regular basis after considering the MAT credit entitlements of earlier years which have been set off.

6. Amalgamation expenses are written off over a period of five years.

7. (b) Confirmations of balances from some of sundry debtors and creditors have not been received.

8. Information relating to Related Party Disclosures as per Accounting Standard issued by the Institute of Chartered Accountants of India, is given below:

A. List of Related Parties (relied on the details provided by the management):

I Shareholders/Directors

Mr Ravi Ghai, Mr Gaurav Ghai, Mr. RKP Shankardass.

II Other related parties where the common control exists

Graviss Holdings Pvt Ltd., Graviss Foods Pvt Ltd., Graviss Catering Pvt. Ltd, Rich Graviss Products Private Limited, Mahaniya Investments Pvt Ltd., Graviss Hotels & Resorts Limited, Crossword Beverages Pvt. Ltd.,* Great Indian Cigar Co. Pvt. Ltd.*

*ldar Hotels Pvt. Ltd., *Gaylord Pvt. Ltd., *Oregaon Realtys Pvt Ltd,* Perfect Livestock Pvt. Ltd., *Satinetta Finelease & Investments Pvt. Ltd.,* Kwality Walls Fanatasy Ltd. (*no transactions during the year)

III Managing and Joint Managing Director

Mr Ravi Ghai and Mr Gaurav Ghai

9. As the turnover of the Company consists of sale of food and beverages, quantitative details of the turnover and food and beverages consumed are not available and hence have not been given.

10. Hospitality business is the Companys only business segment and hence disclosure of segment-wise information is not applicable under Accounting Standard 17- Segment Reporting.

11. The Company has granted 50,000 share options under the Companys Employees Stock Option Scheme 2007. Since the employee to whom the said options were granted, resigned from the services of the company during the year, the options are not exercisable.

12. The Company has an investment in the equity shares of Graviss Catering Private Limited, a subsidiary, of Rs. 7.65 lacs and has also granted interest free loans to the said subsidiary of Rs. 369.07 lacs. The accumulated losses of the said subsidiary exceed its net worth. In the opinion of the management, having regard to the long term interest of the Company in the said subsidiary there is no diminution, other than temporary, in the value of investments and the Company is also hopeful of recovering the loan.

The Company has an investment in the equity shares of Graviss Hotels and Resorts Limited, a subsidiary, of Rs. 5 lacs and also has granted interest free loan to the said subsidiary of Rs. 9,204.21 lacs. The said subsidiary has purchased lands at various places for developing hotels and is in the process of construction / development. In the opinion of the management, having regard to the long term interest of the Company in the subsidiary and steps taken by the management to complete the projects, there is no diminution, other than temporary, in the value of investment and company is also hopeful of recovering the loan.

13. In the opinion of the management there are no indications that the assets of the company may be impaired as on the balance sheet date.

14. Previous years figures have been regrouped/rearranged wherever necessary to conform to the current years groupings.

 
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