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Notes to Accounts of James Hotels Ltd.

Mar 31, 2015

1.1. Contingent Liabilities & Commitments:

a) Estimated amount of contracts remaining to be executed and not provided for in the books of account - Nil (previous year - Nil).

b) Contingent Liabilities:

-Claims against the Company not acknowledged as debt (Rs. 8,460,929/-):

Third party claims arising from disputes relating to contracts aggregating to (Rs. 8,185,219/-) & an ex-employee claim (Rs. 275,710/-).

The Franchisor (Sarovar Hotels Pvt. Ltd.) has terminated the franchise agreement with the Company and filed a suit for the recovery of outstanding dues; the Company has also filed counter claim on account of deficiency of services etc.

The ultimate outcome of these matters cannot be determined & provision for liability, if any, cannot be estimated at this stage.

-Counter indemnity in respect of guarantee issued by United Bank of India, Punjab National Bank and State Bank of India in favour of Sales Tax Department (Rs. 50,000/-) and Director General of Foreign Trade (Rs. 14,703,980/-).

Fixed Deposits (Rs.17,976,877/- inclusive of interest accrued thereof) with United Bank of India, Punjab National Bank and State Bank of India have been pledged with Banks.

-Additional fee for increase in Authorised Share Capital - Rs. 1,500,000/- (previous year - Rs. 1,168,500/-).

-Liabilities in respect of Income Tax, Excise Duty, Service Tax, Sales Tax and other material statutory dues have been accounted for on the basis of respective returns filed with the relevant authorities. Additional demand, if any, arising at the time of assessments will be accounted for in the year in which assessments are completed.

1.2. Authorised Share Capital:

The Authorised Share Capital of the Company is Rs. 520,000,000/- (Rupees fifty two crores only) divided into 14,000,000 (One crore and forty lacs only) Equity shares of Rs. 10/- each (Rupees ten only) and ,38,000,000 (Three crores and eighty lacs) Equity and/or Preference Shares of Rs. 10/- each (Rupees ten only). However, the exact number of Equity Shares & Preference shares has not been specifically classified.

1.3. Share Application Money (pending allotment - Rs. 375,140,000/-) (read with Note 4.4(a) below)

A) Balance (As on 01st April, 2011 - Rs. 80,300,000/-):

i) Share Application Money (Rs. 80,300,000/-) had been received consequent to the resolution passed in the Annual General Meeting of the Company held on 29th September, 2007 in order to comply with the terms and conditions of the lending Bank as mentioned in para (ii) hereunder.

ii) State Bank of India sanctioned a term loan of Rs. 4 50,000,000/- to part finance the completion of hotel project (situated at Plot No. 10, Sector 17A, Chandigarh), with a stipulation that the remaining amount (i.e. Rs. 73,100,000/-) will be contributed by the promoters as Share Capital.

iii) The Shareholders at the Annual General Meeting held on 29th September, 2007 passed a resolution under Section 81(1A) of the Companies Act, 1956 for preferential allotment of equity shares in accordance with applicable provisions of the Companies Act, 1956 to Mr. Ajmair Singh Bhullar and Mr. Haravtar Singh Arora, the promoters of the Company.

iv) The Company, pursuant to the provisions of Clause 24 of the Listing Agreement, had applied for getting 'in principle' approval of Bombay Stock Exchange (BSE) for listing of new issue of shares. However, BSE had not granted the approval.

v) As per the stipulation of the Banks; monies already brought in by the promoters in the form of Share Capital, Share Application Money and Unsecured Loans not to be allowed to be withdrawn. According to the stipulation of the Banks, Share Application Mney had not be refunded to the promoters.

B) Received during the financial year 2011-2012 (Rs. 294,840,000/-):

i) Share Application Money (Rs. 294,840,000/-) had been received consequent to the special resolution (through Postal Ballot) passed by the shareholders of the Company on 14th December, 2011 (refer Note 4.3 supra) in order to comply with the terms and conditions of the lending Bank as mentioned in para (ii) hereunder.

ii) State Bank of India, while appraising the Company's request for grant of additional term loan in the month of October, 2011, desired that an amount of Rs. 37.53 crores of unsecured loans be converted into capital, before the disbursement of proposed additional term loan. 4.4 a) Petition was filed, in earlier years, by few minority shareholders (objecting preferential allotment to promoters) with the Company Law Board u/s 397 & 398 of the Companies Act, 1956. The Hon'ble Company Law Board vide its order no. CP No. 132(ND)/2011 dated 13th December, 2011 kept the resolution of offer, issue and allotment of Preference Shares in abeyance till the final decision of the Company Law Board; the hearing now stands adjourned to 17th July, 2015 - the matter is sub-judiced.

The Company had duly intimated regarding the above mentioned order of the Board to the Principal Stock Exchange (i.e. Bombay Stock Exchange); where the shares of the Company are listed,

b) The Registrar of Companies, Punjab & Chandigarh had issued show cause notice no. TS/209A/4249/2213 & No. TS/209A/4249/2221 both dated 29.01.2013 under Sections 383A and 224(8) of the Companies Act, 1956, respectively, against the Company and its Directors. The Company and its directors have filed application under Section 621A of the Companies Act, 1956 for compounding of offences under Section 383A and Section 224(8) of the Companies Act, 1956. The authorised representative appeared before the Company Law Board on 24th December, 2013 and submitted to withdraw the compounding application; thereafter, the Hon'ble Board disallowed the compounding application with the direction to the Bench Officer to inform ROC to take such further legal action as deemed fit. 4.5 The Company has defaulted in repayment of principal and interest due to State Bank of India, Punjab National Bank and United Bank of India; resultantly the accounts were classified as NPA.

Provision for interest accrued, in absence of confirmation of balances by banks, has been made on accrual basis.

State Bank of India assigned their debt to the Asset Reconstruction Company (India) Limited, Mumbai and charge was modified in their favour on 20.01.2015.

1.4 Long-term Borrowings:

State Bank of India (vide letter no. SCB/CHD/AMT-III/ 2012-2013/72 dated 19th January, 2013) and Punjab National Bank(vide letter no. LCB/2012 dated 29th November, 2012) have restructured/rescheduled the loans, as mentioned herein below: -

a) Secured

-Term Loans

From State Bank of India

Restructuring Credit Facilities

Repayments in monthly ballooned installments are as under:

Principal outstanding as on 01st January, 2012 (Rs. 398,000,000/-).

15 monthly instalments of Rs. 800,000/- each w.e.f. January, 2012.

12 monthly instalments of Rs. 1,000,000/- each w.e.f. April, 2013.

12 monthly instalments of Rs. 1,200,000/- each w.e.f. April, 2014.

12 monthly instalments of Rs. 1,700,000/- each w.e.f. April, 2015.

12 monthly instalments of Rs. 4,000,000/- each w.e.f. April, 2016.

12 monthly instalments of Rs. 6,000,000/- each w.e.f. April, 2017.

12 monthly instalments of Rs. 7,000,000/- each w.e.f. April, 2018.

12 monthly instalments of Rs. 5,000,000/- each w.e.f. April, 2019.

10 monthly instalments of Rs. 6,000,000/- each and last two monthly instalments of Rs. 7,600,000/- each w.e.f. April, 2020.

Funded Interest Term Loan -1 (Rs. 9,000,000/-)

45 monthly instalments of Rs. 200,000/-each w.e.f. 31st July, 2013.

Funded Interest Term Loan - II (Rs. 66,200,000/-)

09 monthly instalments of Rs. 300,000/-each w.e.f. 31st July, 2013.

12 monthly instalments of Rs. 500,000/- each w.e.f. 30th April, 2014.

12 monthly instalments of Rs. 500,000/-each w.e.f. 30th April, 2015.

12 monthly instalments of Rs. 2,100,000/- each w.e.f. 30th April, 2016.

11 monthly instalments of Rs. 2,200,000/- each and last instalment of Rs. 2,100,000/- w.e.f. 30th April, 2017.

Funded Interest Term Loan - III (Rs. 1,500,000/-)

30 monthly instalments of Rs. 50,000/-each w.e.f. 31st July, 2013.

From Punjab National Bank

Restructuring Credit Facilities

Restructured Term Loan (Rs. 273,000,000/-).

03 monthly instalments of Rs. 200,000/- each w.e.f. January, 2014.

24 monthly instalments of Rs. 200,000/- each w.e.f. April, 2014.

12 monthly instalments of Rs. 500,000/- each w.e.f. April, 2016.

12 monthly instalments of Rs. 2,500,000/- each w.e.f. April, 2017.

12 monthly instalments of Rs. 3,500,000/- each w.e.f. April, 2018.

12 monthly instalments of Rs. 2,000,000/- each w.e.f. April, 2019.

12 monthly instalments of Rs. 2,300,000/- each w.e.f. April, 2020.

10 monthly instalments of Rs. 13,800,000/- each w.e.f. April, 2021.

Fresh Term Loan (rs. 34,000,000/-)

48 monthly instalments of Rs. 100,000/- each w.e.f. April, 2015.

36 monthly instalments of Rs. 600,000/- each w.e.f. April, 2019.

07 monthly instalments of Rs. 1,000,000/- each and last instalment ofRs. 600,000/- w.e.f. April, 2022.

Funded Interest Term Loan (Rs. 33,800,000/-)

09 monthly instalments of Rs. 600,000/- each w.e.f. July, 2013.

12 monthly instalments of Rs. 1,000,000/- each w.e.f. April, 2014.

11 monthly instalments of Rs. 1,400,000/- each and last instalment of Rs. 1,000,000/- w.e.f. April, 2015.

From United Bank of India

Term Loan (Rs. 95,000,000/-).

76 monthly installments of Rs. 100,000/- each w.e.f. December, 2012 to March, 2019.

07 monthly installments of Rs. 10,900,000/- each w.e.f. April, 2019 to October, 2019.

01 monthly installment of Rs. 11,100,000/- due & payable in November, 2019.

Fresh Term Loan (Rs. 20,000,000/-)

82 monthly instalments of Rs. 244,000/- each w.e.f. October, 2013 to July, 2020.

-Interest on all the above term loans is payable on monthly basis.

b) Unsecured

-Unsecured loans from promoters were taken in pursuance of stipulations of the Banks.

-Unsecured loan (Rs. 23,162,704/-) from promoter is exempt deposit, inconformity with the provisions of Section 73 of the Companies Act, 2013 read with Rule 2(c)(xiii) of the Companies(Acceptance of Deposits) Rules, 2014. The Company, during the year, has repaid (Rs. 19,700,564/-) to the director and promoters of the Company.

-The Company has not entered into any contractual agreement(s) with the above referred parties with regard to payment of interest & repayment of principal. 4.7 Reserves & Surplus:

Adjustments (Rs. 37,316/-) represent excess of carrying value over residual value of assets whose useful life has expired as per Part-C of Schedule II of the Companies Act, 2013(refer note 4.14 below).

1.5 Other Non-Current Assets:

Unamortised Expenses (Rs. 1,900,000/-) represent fee for increase in Authorised Share Capital (i.e. normal fee for filing of Form-SH-7).

Since the case (refer note 4.4(a) supra) is pending with the Company Law Board, the Company has not deposited the above mentioned fee till date.

1.6 Other Long-term Liabilities (Rs. 5,246,922/-) include:

-Security Deposits (Rs. 610,688/-) i.e Rs. 320,688/- received from Australian Trade Commission, in earlier years, against renting of space in Hotel.

The Company, during the year, has received Rs. 290,000/- as security deposit for leasing of portion of Building i.e. Restaurants, Night Club, SPA, Banquet/Basement & First Floor.

Other Current Liabilities (Rs. 282,967,068/-):

-Taxes & Expenses payable (Rs. 13,166,465/-) include Service Tax( Rs. 5,574,961/-) for the financial year 2014-2015; however, interest on late deposit of Service Tax will be accounted for at the time of actual payment.

-Tax deducted at source (Rs. 1,113,819/-); interest on late deposit will be accounted for at the time of actual payment.

-Other Liabilities (Rs. 4,578,347/-) include (Rs. 1,990,000/-) due to Ministry of Corporate Affairs on account of fee for increase in Authorised Share Capital.

1.7 Related Party Disclosures (AS-18)

Related parties & their relationship and related parties transactions - As per Annexure - (A).

1.8 The Company has made provision for liability of gratuity on accrual basis; however Actuarial Valuation Report, as required under Accounting Standard 15, has not been obtained.

Note: Since the case (refer note 4.4(a) supra) is pending with the Company Law Board, the Company has not considered Share Application Money for computation of diluted earnings per equity share (as required by paragraph 28 of Accounting Standard - 20 on "Earnings Per Share" notified pursuant to the Companies (Accounting Standards) Rules, 2006 under Section 211(3C) (which continue to be applicable in terms of General Circular 15/2013 dated 13 September, 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013). 4.13 The Company had paid remuneration; Rs. 1,500,000/-) to the Managing Director of the Company, during financial year ended on 31st March, 2015. However, the same is in violation of part II of Schedule V of the Companies Act, 2013 due to default in repayment of debts due to Banks. Effective steps are being taken for filing an application with the Central Government for getting approval for the same. 4.14. Depreciation/Amortisation

- Pursuant to the applicability of the Companies Act, 2013 effective from 01st April, 2014, the Company has applied the estimated useful lives as specified in Part-C of Schedule II; accordingly the carrying value as on 01st April, 2014, is being depreciated over the remaining useful lives.

-Residual value of assets has been considered at 5% of the original cost of the assets.

-The assets, whose remaining useful life is nil and the carrying value of assets as on 01st April, 2014 is more than the residual value, the difference between the carrying value and residual value is adjusted against retained earnings under the head Reserves & Surplus (refer note 4.7 above).

-Depreciation on additions to fixed assets is calculated on month end balances, on written down value line method over the estimated useful lives as specified in Part-C of Schedule II of the Companies Act, 2013.

1.9 a) In the opinion of the Directors, "Current Assets" and "Loans & Advances" are approximately of the value stated in the Balance sheet, if realised in the ordinary course of business and to the best of their knowledge provisions for all the known liabilities have been made and, as certified, all the contractual and statutory obligations have been duly complied with.

b) Party balances have been incorporated in the financial statements at the value as per the books of account & are considered hopeful of recovery/good for payment.

1.10 Segment Reporting (AS-17)

Since the Company primarily operates in one segment (Hotel Industry) - therefore segment reporting as required under Accounting Standard - 17 is not applicable - there is no reportable geographical segment either.

1.11 Land (Leasehold) was allotted by the Chandigarh Administration to the Company. Accounting Standard -19 is not applicable in case of "lease agreements to use land".

1.12 Deferred Tax Asset & Liability (AS-22)

In absence of virtual certainty supported by convincing evidence that unabsorbed depreciation and carry forward losses can be set off against future taxable income, deferred tax asset as a measure of prudence has not been recognised.

1.13 Micro, Small & Medium Enterprises

Based on the information presently available, there are no amounts due to any micro or small enterprises under the Micro, Small and Medium Enterprises Development Act, 2006.

1.14 Figures for previous year have been regrouped/rearranged, where considered necessary to conform to the current year's presentation.

1.15 Figures have been rounded off to nearest rupee.


Mar 31, 2014

1. Reconciliation of share capital outstanding as at the beginning and at the end of the year

During the current year and in the previous year, there has been no movement in the number of equity shares outstanding.

* exclusive of interest accrued but not due (Rs. 14,438/-) on vehicle loans.

** repayments of principal amount due to the banks for the financial year 2013-2014.

2. Notes

1. Term Loans & Funded Interest Term Loans from State Bank of India, Punjab National Bank & United Bank of India are secured, pari passu, by first charge on the entire fixed assets including equitable mortgage of leasehold rights of commercial hotel land (measuring 9,602 sq. yards) alongwith building constructed thereon at Block No. 10, Sector 17A, Chandigarh and current assets of the Company and collateral security, pari passu, by first charge on 30% share capital of the Company in the name of Directors already pledged in favour of State Bank of India and personal guarantee of two promoters of the Company.

The rate of interest on the loans ranges from 11.00% to 16.00% per annum

3. Vehicle Loans from ICICI Bank are secured against specified vehicles.

* including cheques & drafts in hand (Rs. 230,389/-).

** pledged as security with United Bank of India, State Bank of India & Punjab National Bank for bank guarantees in favour of Sales Tax Department and Director General of. Foreign Trade, respectively.

4. Contingent Liabilities & Commitments:

a) Estimated amount of contracts remaining to be executed and not provided for in the books of account - Nil (previous year - Nil).

b) Contingent Liabilities:

* Claims against the Company not acknowledged as debt (Rs.8,460,929/-) which comprises: Third party claims arising from disputes relating to contracts aggregating to (Rs.8,185,219/-) & an ex-employee claim (Rs. 275,710/-).

It is not practicable for the Company to estimate the closure of these issues and the consequential timings of cash flows, if any, in respect of the above.

* Counter indemnity in respect of guarantees issued by United Bank of India, Punjab National Bank and State Bank of India in favour of Sales Tax Department (Rs. 50,000/-) and Director General of Foreign Trade (Rs.14,703,980/-).

Fixed Deposits (Rs.16,628,164/- inclusive of interest accrued thereon) with United Bank of India, Punjab National Bank and State Bank of India have been pledged with the banks.

* Additional fee for increase in Authorised Share Capital - Rs.1,168,500/- (previous year - Rs. 598,500/-).

5. Authorised Share Capital:

The Authorised Share Capital of the Company is Rs.520,000,000/- (Rupees fifty two crores only) divided into 14,000,000 (One crore and forty lacs only) Equity shares of Rs.10/- each (Rupees ten only) and 38,000,000 (Three crores and eighty lacs) Equity and/or Preference Shares of Rs.10/- each (Rupees ten only). However, the exact number of Equity Shares & Preference shares has not been specifically classified.

6. Share Application Money (pending allotment - Rs. 375,140,000/-) (read with Note 4.4 below)

A) Balance (As on 01st April, 2011 - Rs. 80,300,000/-):

i) Share Application Money (Rs. 80,300,000/-) had been received consequent to the resolution passed in the Annual General Meeting of the Company held on 29th September, 2007 in order to comply with the terms and conditions of the lending Bank as mentioned in para (ii) hereunder.

ii) State Bank of India sanctioned a term loan of Rs.450,000,000/- to part finance the completion of hotel project (situated at Plot No. 10, Sector 17, Chandigarh), with a stipulation that the remaining amount (i.e. Rs. 73,100,000/-) will be contributed by the promoters as Share Capital.

iii) The Shareholders at the Annual General Meeting held on 29th September, 2007 passed a resolution under Section 81(1A) of the Companies Act, 1956 for preferential allotment of equity shares in accordance with applicable provisions of the Companies Act, 1956 to Mr. Ajmair Singh Bhullar and Mr. Haravtar Singh Arora, the promoters of the Company.

iv) The Company, pursuant to the provisions of Clause 24 of the Listing Agreement, had applied for getting ''in principle'' approval of Bombay Stock Exchange (BSE) for listing of new issue of shares. However, BSE had not granted the approval.

v) As per the stipulation of the Banks; monies already brought in by the promoters in the form of Share Capital, Share Application Money and Unsecured Loans not to be allowed to be withdrawn. According to the stipulation of the Banks, Share Application Money had not be refunded to the promoters.

B) Received during the financial year 2011-2012 (Rs. 294,840,000/-):

i) Share Application Money (Rs.294,840,000/-) had been received consequent to the special resolution (through Postal Ballot) passed by the shareholders of the Company on 14th December, 2011(refer Note 4.3 supra) in order to comply with the terms and conditions of the lending Bank as mentioned in para (ii) hereunder.

ii) State Bank of India, while appraising the Company''s request for grant of additional term loan in the month of October, 2011, desired that an amount of Rs.37.53 crores of unsecured loans be converted into capital, before the disbursement of proposed additional term loan.

7. Petition was filed, in earlier years, by few minority shareholders (objecting preferential allotment to promoters) with the Company Law Board u/s 397 & 398 of the Companies Act, 1956. The Hon''ble Company Law Board vide its order no. CP No. 132(ND)/2011 dated 13th December, 2011 kept the resolution of offer, issue and allotment of Preference Shares in abeyance till the final decision of the Company Law Board; the hearing now stands adjourned to19th August, 2014 - the matter is subjudiced.

The Company had duly intimated regarding the above mentioned order of the Board to the Principal Stock Exchange (i.e. Bombay Stock Exchange); where the shares of the Company are listed.

8. Long-term Borrowings:

State Bank of India (vide letter no. SCB/CHD/AMT-III/ 2012-2013/72 dated 19th January, 2013) and Punjab National Bank (vide letter no. LCB/2012 dated 29th November, 2012) have restructured/rescheduled the loans, as mentioned herein below:-

a) Secured

*Term Loans

From State Bank of India

Restructuring Credit Facilities

Repayments in monthly ballooned installments are as under:

Principal outstanding as on 01st January, 2012 (Rs. 398,000,000/-).

15 monthly instalments of Rs. 800,000/- each w.e.f. January, 2012.

12 monthly instalments of Rs. 1,000,000/- each w.e.f. April, 2013.

12 monthly instalments of Rs. 1,200,000/- each w.e.f. April, 2014.

12 monthly instalments of Rs. 1,700,000/- each w.e.f. April, 2015.

12 monthly instalments of Rs. 4,000,000/- each w.e.f. April, 2016.

12 monthly instalments of Rs. 7,000,000/- each w.e.f. April, 2018.

12 monthly instalments of Rs. 5,000,000/- each w.e.f. April, 2019.

10 monthly instalments of Rs. 6,000,000/- each and last two monthly instalments of Rs. 7,600,000/- each w.e.f. April, 2020.

Funded Interest Term Loan - I (Rs. 9,000,000/-)

45 monthly instalments of Rs. 200,000/- each w.e.f. 31st July, 2013.

Funded Interest Term Loan - II (Rs.66,200,000/-)

09 monthly instalments of Rs.300,000/- each w.e.f. 31st July, 2013.

12 monthly instalments of Rs.500,000/- each w.e.f. 30th April, 2014.

12 monthly instalments of Rs.500,000/- each w.e.f. 30th April, 2015.

12 monthly instalments of Rs.2,100,000/- each w.e.f. 30th April, 2016.

11 monthly instalments of Rs.2,200,000/- each and last instalment of Rs. 2,100,000/- w.e.f. 30th April, 2017.

Funded Interest Term Loan - III (Rs.1,500,000/-)

30 monthly instalments of Rs. 50,000/- each w.e.f. 31st July, 2013.

From Punjab National Bank

Restructuring Credit Facilities

Restructured Term Loan (Rs.273,000,000/-)

03 monthly instalments of Rs.200,000/- each w.e.f. January, 2014.

24 monthly instalments of Rs.200,000/- each w.e.f. April, 2014.

12 monthly instalments of Rs.500,000/- each w.e.f. April, 2016.

12 monthly instalments of Rs. 2,500,000/- each w.e.f. April, 2017.

12 monthly instalments of Rs. 3,500,000/- each w.e.f. April, 2018.

12 monthly instalments of Rs. 2,000,000/- each w.e.f. April, 2019.

12 monthly instalments of Rs. 2,300,000/- each w.e.f. April, 2020.

10 monthly instalments of Rs.13,800,000/- each w.e.f. April, 2021.

Fresh Term Loan (Rs.34,000,000/-)

48 monthly instalments of Rs.100,000/- each w.e.f. April, 2015.

36 monthly instalments of Rs. 600,000/- each w.e.f. April, 2019.

07 monthly instalments of Rs. 1,000,000/- each and last instalment of Rs. 600,000/- w.e.f. April, 2022.

Funded Interest Term Loan (Rs.33,800,000/-)

09 monthly instalments of Rs. 600,000/- each w.e.f. July, 2013.

12 monthly instalments of Rs.1,000,000/- each w.e.f. April, 2014.

11 monthly instalments of Rs. 1,400,000/- each and last instalment of 1,000,000/- w.e.f. April, 2015.

From United Bank of India

Term Loan (Rs.95,000,000/-).

76 monthly installments of Rs. 100,000/- each w.e.f. December, 2012 to March, 2019

07 monthly installments of Rs. 10,900,000/- each w.e.f. April, 2019 to October, 2019

01 monthly installment of Rs. 11,100,000/- due & payable in November, 2019.

Fresh Term Loan (Rs. 20,000,000/-)

82 monthly instalments of Rs. 244,000/- each w.e.f. October, 2013 to July, 2020

* Interest on all the above term loans is payable on monthly basis.

* The Company has defaulted in repayment of dues (Rs. 4,650,000/-, Rs.2,400,000/- & Rs. 689,572/-) for the period from January, 2014 to March, 2014, and interest (Rs.7,163,332/-, Rs. 6,627,767/- & Rs. 2,465,651/-) for the month of January, 2014 and February, 2014, to State Bank of India, Punjab National Bank & United Bank of India, respectively; which remained unpaid as on 31st March, 2014.

b) Unsecured

* Unsecured loans from promoters were raised in pursuance of stipulations of the Banks.

* Unsecured loans (Rs. 42,863,268/-) from promoters [i.e. Director (Rs.4,650,251/-) & Others (Rs.38,213,017/-)] are exempt deposit, inconformity with the provisions of Section 58A of the Companies Act, 1956 read with Rule 2(b)(xi) of the Companies (Acceptance of Deposits) Rules, 1975.

* The Company has not entered into any contractual agreement(s) with the above referred parties with regard to payment of interest & repayment of principal.

9. a) In the opinion of the Directors, "Current Assets" and "Loans & Advances" are approximately of the value stated in the Balance sheet, if realised in the ordinary course of business and to the best of their knowledge provisions for all the known liabilities have been made and, as certified, all the contractual and statutory obligations have been duly complied with. b) Party balances have been incorporated in the financial statements at the value as per the books of account & are considered hopeful of recovery/good for payment.

10. Fixed Assets:

Capital Work-in-Progress :

Building (under construction - Rs. 302,756,081/- inclusive of interest on term loans - Rs.31,862,819/-), Plant & Machinery (under installation - Rs.30,654,661/- inclusive of interest on term loans - Rs. 2,584,072/-) and Miscellaneous Fixed Assets (under installation - Rs. 89,897,282/- inclusive of interest on term loans - Rs.8,376,740/-), on completion of construction/installation, have been capitalised to the respective assets.

11. Other Non-Current Assets:

Unamortised Expenses (Rs.1,900,000/-) represent fee for increase in authorised share capital (i.e. normal fee for filing of Form-SH-7).

Since the case (refer note 4.4 supra) is pending with the Company Law Board, the Company has not deposited the above mentioned fee till date.

12. The Registrar of Companies, Punjab & Chandigarh had issued show cause notice no. TS/209A/4249/2213 & No. TS/209A/4249/2221 both dated 29.01.2013 under Sections 383A and 224(8) of the Companies Act, 1956, respectively, against the Company and its Directors. The Company and its directors have filed application under Section 621A of the Companies Act, 1956 for compounding of offences under Section 383A and Section 224(8) of the Companies Act, 1956. The authorised representative appeared before the Company Law Board on 24th December, 2013 and submitted to withdraw the compounding application; thereafter, the Hon''ble Board disallowed the compounding application with the direction to the Bench Officer to inform ROC to take such further legal action as deemed fit.

13. Related Party Disclosures (AS-18)

Related parties & their relationship and related parties transactions - As per Annexure - (A).

14. The Company has the policy to account for gratuity on actual payment basis which is not inconformity with accounting for gratuity, as specified under Accounting Standard - 15 "Employee Benefits"; thus loss to that extent has been understated.

Note: Since the case (refer note 4.4 supra) is pending with the Company Law Board, the Company has not considered Share Application Money for computation of diluted earnings per equity share (as required by paragraph 28 of Accounting Standard - 20 on "Earnings Per Share" notified pursuant to the Companies (Accounting Standards) Rules, 2006.

15. Borrowing Costs (AS - 16)

Borrowing costs (Rs. 42,823,631 /-) attributable to construction/installation of fixed assets have been capitalised, during the year (refer note 4.7 supra).

16. Segment Reporting (AS - 17)

Since the Company primarily operates in one segment (Hotel Industry) - therefore segment reporting as required under Accounting Standard - 17 is not applicable - there is no reportable geographical segment either.

17. Land (Leasehold) was allotted by the Chandigarh Administration to the Company.

Accounting Standard - 19 is not applicable in case of "lease agreements to use land".

18. Deferred Tax Asset & Liability (AS-22)

In absence of virtual certainty supported by convincing evidence that unabsorbed depreciation and carry forward losses can be set off against future taxable income, deferred tax asset as a measure of prudence has not been recognised.

19. Micro, Small & Medium Enterprises

Based on the information presently available, there are no amounts due to any micro or small enterprises under the Micro, Small and Medium Enterprises Development Act, 2006.

20. Figures for previous year have been regrouped/ rearranged, where considered necessary to conform to the current year''s presentation.

21. Figures have been rounded off to nearest rupee.


Mar 31, 2013

1.1. Contingent Liabilities & Commitments:

a) Estimated amount of contracts remaining to be executed on capital account and not provided for in the books of account-Nil (previous year-Rs. 100,000,000/-).

b) Contingent Liabilities:

- Claims against the Company not acknowledged as debt - Nil (previous year - Nil) -Additional fee for increase in Authorised Share Capital - Rs. 598,500/- (previous year - Nil). Liabilities in respect of Income Tax and Sales Tax have been accounted for on the basis of respective returns filed with the relevant authorities. Additional demand, if any, arising at the time of assessments will be accounted for in the year in which assessments are completed.

1.2. Authorised Share Capital:

The Authorised Share Capital of the Company is Rs. 520,000,000/- (Rupees fifty two crores only) divided into 14,000,000 (One crore and forty lacs only) Equity shares of Rs. 10/- each (Rupees ten only) and 38,000,000 (Three crores and eighty lacs) Equity and/or Preference Shares ofRs.10/- each (Rupees ten only). However, the exact number of Equity Shares & Preference shares has not been specifically classified.

1.3. Share Application Money (pending allotment - Rs.375,140,000/-)

(read with Note 4.4 infra)

A) Balance (As on 01*April, 2011 - Rs. 80,300,000/-):

i) Share Application Money (Rs.80,300,000/-) had been received consequent to the resolution passed in the Annual General Meeting of the Company held on 29"'' September, 2007 in order to comply with the terms and conditions of the lending Bank as mentioned in para (ii) hereunder.

ii) State Bank of India sanctioned a term loan of Rs. 450,000,000/- to part finance the completion of hotel project (situated at Plot No. 10, Sector 17, Chandigarh), with a stipulation that the remaining amount (i.e. Rs.73,100,000/-) will be contributed by the promoters as Share Capital.

iii) The Shareholders at the Annual General Meeting held on 29''" September, 2007 passed a resolution under Section 81(1A) of the Companies Act, 1956 for preferential allotment of equity shares in accordance with applicable provisions of the Companies Act, 1956 to Mr. Ajmair Singh Bhullar and Mr. Haravtar Singh Arora, the promoters of the Company.

iv) The Company, pursuant to the provisions of Clause 24 of the Listing Agreement, had applied for getting ''in principle'' approval of Bombay Stock Exchange (BSE) for listing of new issue of shares. However, BSE had not granted the approval.

v) As per the stipulation of the Banks; monies already brought in by the promoters in the form of Share Capital, Share Application Money and Unsecured Loans not to be allowed to be withdrawn. According to the stipulation of the Banks, Share Application Money had not be refunded to the promoters.

B) Received during the financial year 2011-2012 (Rs. 294,840,000/-):

i) Share Application Money (Rs.294,840,000/-) had been received consequent to the special resolution (through Postal Ballot) passed by the shareholders of the Company on 14lh December, 2011 (refer Note 4.3 supra) in order to comply with the terms and conditions of the lending Bank as mentioned in para (ii) hereunder.

ii) State Bank of India, while appraising the Company''s request for grant of additional term loan in the month of October, 2011, desired that an amount of Rs. 37.53 crores of unsecured loans be converted into capital, before the disbursement of proposed additional term loan.

1.4 A few minority shareholders filed petition, in previous year, (objecting preferential allotment to promoters) with the Company Law Board u/s 397 & 398 of the Companies Act, 1956.The Hon''ble Company Law Board vide its order no. CP No. 132(ND)/2011 dated 13th December, 2011 kept the resolution of offer, issue and allotment of Preference Shares in abeyance till the final decision of the Company Law Board; and the scheduled hearing on 16* May, 2013 was adjourned to 30''" August, 2013 - the matter is subjoined.

The Company had duly intimated regarding the above mentioned order of the Board to the Principal Stock Exchange (i.e. Bombay Stock Exchange); where the shares of the Company are listed.

1.5 Long-term Borrowings:

State Bank of India (vide letter no. SCB/CHD/AMT-III/ 2012-2013/72 dated 19,h January, 2013) and Punjab National Bank (vide letter no. LCB/2012 dated 29,h November, 2012) have restructured/rescheduled the loans, as mentioned herein below:-

1.6 a) In the opinion of the Directors, "Current Assets" and "Loans & Advances" are approximately of the value stated in the Balance sheet, if realised in the ordinary course of business and to the best of their knowledge provisions for all the known liabilities have been made and, as certified, all the contractual and statutory obligations have been duly complied with.

b) Party balances have been incorporated in the financial statements at the value as per the books of account & are considered hopeful of recovery/good for payment.

1.7 Fixed Assets:

Capital Work-in-Progress (Rs.335,917,985/-) comprises of:

Building (under-construction Rs.256,130,069/-), Plant & Machinery and Miscellaneous

Fixed Assets (under-installation Rs. 17,496,9131- & Rs.62,291,003 respectively); the said amount, on completion of construction/installation will be capitalised to respective assets.

-To ascertain correct amount of profit or loss for the given period & in accordance with the generally accepted accounting principles and the policy consistently followed by the Company, depreciation on other fixed assets (under-construction/under-installation) has not been provided.

-The Company has commenced operations, during the year; therefore Pre-operative

Expenses have been capitalised.

Long-term Loans & Advances:

Advances for capital goods (Rs.10,154,489/-); the goods will be received in the ensuing year.

1.8 Other Non-Current Assets:

Unamortised Expenses ( Rs.1,900,000/-) represent fee for increase in authorised share capital (i. e. normal fee for filing ofForm-5).

Since the case (refernote 4.4 supra) is pending with the Company Law Board, the Company has not deposited the above mentioned fee till date.

1.9 The Registrar of Companies, Punjab & Chandigarh had initiated legal proceedings, in previous year, under Sections 154(2), 193, 301(4) and 303(2) of the Companies Act, 1956, against the Company and its Directors in the Court of Hon''ble Chief Judicial Magistrate, Chandigarh; the Court has compounded the offence and the Company has deposited the compounding fee as directed by the Court.

1.10 The Registrar of Companies, Punjab & Chandigarh has issued show cause notice No. TS/209A/4249/2213 & No. TS/209A/4249/2221 dated 29.01.2013 under Sections 383A and 224(8) of the Companies Act, 1956, respectively, against the Company and its Directors. The Company and its directors have filed compounding application under Section 621A of the Companies Act, 1956 for compounding of offences under Section 383A and Section 224(8) of the Companies Act, 1956.

1.11 The Company Secretary resigned w.e.f. 2fhDecember, 2011, thereafter the post remained vacant till 30" June, 2012. The Company has appointed the Company Secretary w.e.f. 01s''July, 2012.

1.12 Borrowing Costs (AS-16)

Borrowing costs (Rs. 96,350,703/-) attributable to construction/installation of fixed assets have been capitalised, during the year. Capitalisation of borrowing costs will cease when essentially all the activities necessary to prepare the qualifying assets for its intended use are completed.

1.13 Segment Reporting (AS-17)

Since the Company primarily operates in one segment (Hotel Industry) - therefore segment reporting as required under Accounting Standard - 17 is not applicable - there is no reportable geographical segment either.

1.14 Related Party Disclosures (AS-18) (As certified by the management)

a) Related Parties & their relationships: i) Key Management Personnel

-Haravtar Singh Arora (Managing Director) ii) Relatives of Key Management Personnel

-BhupinderSingh

-Paramjit Singh iii) Individual having control or significant influence

-Ajmair Singh Bhullar

4.16 Land (Leasehold) was allotted by the Chandigarh Administration to the Company.

Accounting Standard -19 is not applicable in case of "lease agreements to use land".

1.15 Deferred Tax Asset & Liability (AS-22)

In absence of virtual certainty of sufficient future taxable income, deferred tax asset as a measure of prudence has not been recognised on carry forward of business losses/unabsorbed depreciation under tax laws.

1.16 Micro, Small & Medium Enterprises

Based on the information presently available, there are no amounts due to any micro or small enterprises under the Micro, Small and Medium Enterprises DevelopmentAct, 2006.

1.17 No Managerial Remuneration has been paid during the year in wake of losses incurred by the Company.


Mar 31, 2012

1.1 a) Estimated amount of capital contracts remaining to be executed and not provided for in the books of account - Rs.1,000 lacs (previous year - Nil).

b) Contingent Liabilities:

- Claims against the Company not acknowledged as debt - Nil (previous year- Nil).

- Guarantee (Rs. 14,803,980/-) given by bank in favour of Department of Customs for import of machinery under EPCG licence.

- Liabilities in respect of Income Tax and Sales Tax have been accounted for on the basis of respective returns filed with the relevant authorities.

Additional demand, if any, arising at the time of assessments will be accounted for in the year in which assessments are completed.

1.2 In the opinion of the Directors, "Current Assets" and "Loans & Advances" are approximately of the value stated in the Balance sheet, if realised in the ordinary course of business and to the best of their knowledge provisions for all the known liabilities have been made and. as certified, all the contractual and statutory obligations have been duly complied with.

1.3 Party balances, in certain cases, are under reconciliation & subject to confirmation; however the same have been incorporated in the financial statements at the value as per the books of account & are considered hopeful of recovery/good for payment; therefore, provision for bad & doubtful debts/ unclaimed balances is not required.

1.4 The Authorised Share Capital of the Company is Rs. 520,000,000/- (Rupees fifty two crores only) divided into 14,000.000 (One crore and forty lacs only) Equity shares of Rs. 10/- each (Rupees ten only) and 3,80,00,000 (Three crores and eighty lacs) Equity and/or Preference Shares of Rs.10/- each (Rupees ten only). Whereas, the proposed allotment is of issue of 10% Optionally Convertible, Non-Cumulative Redeemable Preference Shares on preferential basis; however, the exact number of Equity Shares & Preference shares has not been specifically classified.

1.5 The Authorised Share Capital of the Company, with consequent amendments in the Memorandum of Association & Articles of Association of the Company, was increased by passing special resolution through postal ballot in terms of the provisions of Section 192A of the Companies Act. 1956 read with the Companies (passing of the resolution by postal ballot) Rules, 2011.

- The object of allotment of 10% Optionally Convertible Non-Cumulative Redeemable Preference Shares, on preferential basis, to the promoters of the Company, has not been adequately disclosed in notice for voting through postal ballot.

However, it has been mentioned in the said notice that the object of the preferential issue is to comply with the stipulation of State Bank of India to convert unsecured loans of the promoters to share capital by issuing and allotting 37,514,000 (three crores, seventy five lacs & fourteen thousand) 10% Optionally Convertible Non-Cumulative Redeemable Preference Shares to the four promoter directors (i.e. Mr. Ajmair Singh Bhullar, Mr. Haravtar Singh Arora, Mr. Ajit Pal Singh & Mr. Paramjit Singh) and the Company is required to maintain the debt-equity ratio as per bank norms.

- Notice for voting through postal ballot states that the shareholding pattern of post-preferential issue is not ascertainable at this stage; whereas, it is mandatory to disclose shareholding pattern of post-preferential issue, as required under the applicable provisions of rule 73(1 )(c) of ICDR Regulation, 2009 (the "Regulation"). - The Company is listed on the Stock Exchange and accordingly, pursuant to the provisions of Clause 24 of the Listing Agreement, has applied for getting 'in principle' approval from the Bombay Stock Exchange for listing of new issue of shares. However, approval of Bombay Stock Exchange is still awaited.

1.6 Share Application Money (pending allotment - Rs. 375,140,000/-)

A) Balance (As on 01 "April. 2011 -Rs. 80,300,000/-):

i) Share Application Money (Rs. 80,300,000/-) had been received consequent to the resolution passed in the Annual General Meeting of the Company held on 29th September, 2007 in order to comply with the terms and conditions of the lending Bank as mentioned in para (b) hereunder.

ii) State Bank of India sanctioned a term loan of Rs. 4,500 lacs to part finance the completion of hotel project (situated at Block No. 10, Sector 17-A, Chandigarh), with a stipulation that the remaining amount (i.e. Rs. 731 lacs) will be contributed by the promoters as Share Capital,

iii) The Shareholders at the Annual General Meeting held on 29th September, 2007 passed a resolution under Section 81(1A) of the Companies Act, 1956 for preferential allotment of equity shares in accordance with applicable provisions of the Companies Act, 1956 to Mr. Ajmair Singh Bhullar and Mr. Haravtar Singh Arora. the promoters of the Company,

iv) The Company, pursuant to the provisions of Clause 24 of the Listing Agreement, had applied forgetting 'in principle' approval of Bombay Stock Exchange (BSE) for listing of new issue of shares. However, BSE had not granted the approval.

v) As per the stipulation of the Banks; monies already brought in by the promoters in the form of Share Capital. Share Application Money and Unsecured Loans not to be allowed to be withdrawn. According to the stipulation of the Banks, Share Application Money had not be refunded to the promoters.

B) Received during the year (Rs. 294.840,000/-):

i) Share Application Money (Rs. 294,840,000/-) has been received consequent to the special resolution (through Postal Ballot) passed by the shareholders of the Company on 14th December, 2011 in order to comply with the terms and conditions of the lending Bankas mentioned in para (b) hereunder,

ii) State Bank of India, while appraising the Company's request for grant of additional term loan in the month of October. 2011, desired that an amount of Rs. 37.53 crores of unsecured loans be converted into Share Application Money, be converted into capital, before the disbursement of proposed additional term loan.

However, few minority shareholders filed petition (objecting preferential allotment to promoters) with the Company Law Board u/s 397 & 398 of the Companies Act, 1956. The Hon'ble Company Law Board vide its order no. CP NO. 132(ND)/2011 dated 13th December, 2011 kept the resolution of offer, issue and allotment of Preference Shares in abeyance till the final decision of the Company Law Board; and the scheduled hearing on 27th February, 2012 was adjourned to 01st June, 2012- the matter is subjudiced.

The Company has duly intimated regarding the above mentioned order of the Board to the Principal Stock Exchange (i.e. Bombay Stock Exchange); where the shares of the Company are listed.

1.7 Unsecured Loans:

- Unsecured loans from promoters were raised in pursuance of stipulations of the Banks.

- Unsecured loans (Rs. 28,713,268/-) from promoters (i.e. Promoter Directors (Rs. 150,251/-) Promoter

- Others (Rs. 28,563,017/-)) are exempt deposit, inconformity with the provisions of Section 58A of the Companies Act, 1956 read with Rule 2(b)(xi) of the Companies (Acceptance of Deposits) Rules, 1975.

- The Company has not entered into any contractual agreement(s) with the above referred parties with regard to payment of interest & repayment of principle.

1.8 The management has informed that:

"A" Employee Benefits

Short-term Employee Benefits:

- Leave Encashment, on the basis of actual computation, is accounted for on accrual basis, during the tenure of employment, the payment in respect thereof is made by the Company from its own funds as per the past practice consistently followed by the Company.

- Bonus is accounted for at the lime of actual payment. Post-Employment Benefits

(a) Defined Contribution Plans:

Contributions as required under the Statute/Rule are made to Employees State Insurance & Provident Fund and charged to the Statement of Profit & Loss of the year when the contributions to the funds are due. Provisions of Employees State Insurance & Provident Fund became applicable to the Company w.e.f. March, 2012.

(b) Defined Benefit Plan: Gratuity is accounted for at the time of actual payment.

"B" Others

- Fixed Assets:

Capital Work-in-Progress (Rs. 7.582.91 lacs) comprises of:

Building (under-construction Rs. 4.879.52 lacs). Plant & Machinery and Miscellaneous Fixed Assets (under-installation Rs. 1.641.01 lacs & Rs. 1.062.38 lacs respectively): the said amount, on completion of construction/installation will be capitalised to respective assets.

The Project is still under implementation and the Company intends to capitalised Pre-operative Expenses on commencement of commercial operations.

Funds raised for the implementation of hotel project were temporarily deployed & invested in Fixed Deposits with Banks; Bank Charges & Interest (Rs. 109,471,541/- net of interest earned on fixed deposits (Rs. 1,558,737/-) has been shown under the head Pre-operative Expenses (pending capitalisation).

- Long-Term Loans & Advances include advances for capital goods (Rs 10.524.655/- previous year

- Rs. 94.403,143/- shown under the head capital work-in-progress). the goods will be received in the ensuing year.

- Unamortised Expenses (Rs. 1,900,000/-) represent fee for increase in authorised share capital (i.e normal fee for filing of Form-5). As per the policy of the Company it will be amortised over the period of five years.

1.9 Depreciation & Amortisation Expense:

Depreciation (Rs. 763,279/-) on Furniture & Fixtures (Office), Equipment, Computers & Vehicles has been provided, on written down value method, as per the rates specified in Schedule XIV of the Companies Act, 1956.

To ascertain correct amount of profit or loss for the given period & in accordance with the generally accepted accounting principles and the policy consistently followed by the Company, depreciation on other fixed assets (under-construction/under-installation) has not been provided.

1.10 The Regional Director (NR) (Ministry of Corporate Affairs), vide their letter no. 1425/JDI/2009/12029 dated 01st June, 2009; initiated the proceedings for inspection of books of account & other records etc. under Section 209-A of the Companies Act, 1956; the desired information was furnished by the Company vide its letter dated 12th June, 2009.

Subsequently, the Regional Director (NR) (Ministry of Corporate Affairs), after conducting the inspection, directing the Company, Issued a letter no. 1425/JDI/2009/3194 dated 24th August, 2010, to furnish reply/information and explanations on violation of various Sections of the Companies Act, 1956 and other matters. The Company, vide its letter dated 07th September, 2010 furnished the requisite information with comments and explanations.

The Registrar of Companies, Punjab & Chandigarh on the recommendation of the Regional Director has initiated legal proceedings under Sections 154(2), 211(7), 217(3), and 303(c) of the Companies Act, 1956, against the Company and its Directors in the Court of Hon'ble Chief Judicial Magistrate. Chandigarh; the legal proceedings are pending in the said Court.

1.11 The Company, except We following, has complied with all the clauses of listing agreement entered into with the Stock Exchanges during the financial year ended on 31" March, 2012:

a) Clause 41 regarding Limited Review Report for the Quarter ended 30th September, 2011.

b) Clause 35 regarding filing of Share-holding pattern for the Quarters ended 31st December, 2011 & 31st March, 2012.

c) Regulation 55A of SEBI (Depositories and Participants) Regulations, 1996 regarding audit report on reconciliation of the records of dematerialised securities for the quarters ended 31st December, 2011 & 31st March, 2012.

1.12 The Company Secretary resigned w.e-f. 27th December, 2011 thereafter the post remained vacant till 31st March, 2012.

1.13 Long Term Borrowings Secured:

-Term Loans

From State Bank of India (Rs. 4.500 lacs) is repayable in 82 monthly installments with a moratorium period of 37 months as under:

16 monthly installments of Rs. 40 lacs each w.e.f. Dec, 2010 to Mar., 2012

24 monthly installments of Rs. 50 lacs each w.e.f. Apr..2012 to Mar., 2014

24 monthly installments of Rs. 55 lacs each w.e.f. Apr., 2014 to Mar., 2016

12 monthly installments of Rs. 60 lacs each w.e.f. Apr., 2016 to Mar., 2017

05 monthly installments of Rs. 95 lacs each w.e.f. Apr., 2017 to Aug., 2017

01 monthly installment of Rs. 145 lacs due & payable in Sep., 20l7.

From Punjab National Bank (Rs. 2,800 lacs) is repayable in 92 monthly installments with a moratorium period of 12 months as under:

78 monthly installments of Rs. 05 lacs each w.e.f. Apr., 2011 to Sep., 2017

06 monthly installments of Rs. 95 lacs each w.e.f. Oct., 2017 to Mar., 2018

08 monthly installments of Rs. 230 lacs each w.e.f. Apr., 2018 to Nov., 2018.

From United Bank of India (Rs. 950 lacs) is repayable in 84 monthly installments with a moratorium period of 12 months as under

76 monthly installments of Rs. 01 lacs each w.e.f. Dec., 2012 to Mar., 2019

07 monthly installments of Rs. 109 lacs each w.e.f. Apr., 2019 to Oct., 2019

01 monthly installment of Rs. 111 lacs due & payable in Nov., 2019.

- Interest on all the above term loans is payable on monthly basis.

- Interest accrued & due (Rs. 16,992,296/-) on term loan from State Bank of India includes interest (Rs. 10,564,125/-) for the months of January, 2012 & February, 2012, the said amount remained unpaid at the close of the year.

Interest accrued & due (Rs. 7,085,733/-) on term loan from Punjab National Bank includes (Rs. 3,409,094/-) for the month of February, 2012.

The installments of term loans from State Bank of India and Punjab National Bank aggregating to Rs. 12,000,000/- and Rs. 1,000,000/- respectively, due and payable till March, 2012, also remained unpaid.

1.14 Borrowing Costs (AS-16)

Borrowing costs amounting to Rs. 109,471,541/- (net) attributable to construction/installation of fixed assets have been transferred to Preoperative Expenses (pending capitalisation) to be capitalised on commencement of commercial operations. Capitalisation of borrowing costs will cease when essentially all the activities necessary to prepare the qualifying assets for its intended use are completed.

1.15 Segment Reporting (AS-17)

The business operations remained suspended & the Company did not carry on any activity, hence the Company has nothing to report on Accounting Standard-17 issued by the Institute of Chartered Accountants of India (ICAI).

1.16 Related Party Disclosures (AS-18)

(As certified by the management)

a) Related Parties & their relationships:

i) Key Management Personnel

- Haravtar Singh Arora (Managing Director)

- Ajit Pal Singh (Director)

ii) Relatives of Key Management Personnel

- Bhupinder Singh

- Paramjit singh

- Gurdiy Singh

- Kanwaljit Singh

iii) Individuals controlling or having substantial interest

- Ajmair Singh Bhullar

b) Transaction with related parties:

1.17 Land (Leasehold) was alloted by the Chandigarh Administration to the Company.

1.18 Deferred Tax Asset & Liability (AS-22)

The company has not carried out any commercial operation during the year and due to the existence of carry forward of business losses/unabsorbed depreciation under tax laws and in absence of virtual of certainty of sufficient future taxable income, deferred tax assets as a measure of prudence has not been recognised.

1.19 Micro, Small & Medium Enterprises

Based on the information presently available, there are no amounts due to any micro or small enterprises under the Micro, Small and Medium Enterprises Development Act, 2006.

1.20 General:

Statutory books, as required under the Companies Act, 1956, are being updated.

1.21 No Managerial Remuneration has been paid during the year in wake of losses incurred by the Company.

1.22 Figures for previous year have been regrouped/rearranged, where considered necessary to conform to the current year's presentation.

1.23 Figures have been rounded off to nearest rupee.


Mar 31, 2011

1. a) Estimated amount of contracts - remaining to be executed on capital account & not provided for in the books of account.

b) Contingent Liabilities not account for.

2. In the opinion of the Directors, "Current Assets" and "Lons & Advances" are approximately of the value stated in the Balance sheet, if realised in the ordinary course of business and to the best of their knowledge provisions for all the known liabilities have been made and, as certified, all the contractual and statuory obligations have been duly complied with.

3. The management has informed that party balances, in certain cases, are under reconciliation & subject to confirmation; however the same have been incorporated in the financial statements at the value as per the books of account & are considered hopeful of recovery/good for payment therefore provision for bad & doubtful debts / unclaimed balances is not required.

4. The Regional Director (NR) (Ministry of Corporate Affairs), vide their letter no. 1425/JDI/2009/12029 dated 01th June 2009; initiated the proceedings for inspection of books of account & other recorsds etc. under Section 209-A of the Companies Act, 1956; the desired information was furnished by the Company vide its letter dated 12th June, 2009. Subsequently, the Regional Director (NR) (Ministry of Corporate Affairs), after conducting the inspection, directing the Company, issued a letter no. 1425/JD/2009/3194 dated 24th August 2010, to frunish reply / information & explanations on violation of various of various sections of the Companies Act, 1956. The Company, vide its letter dated 07.09.2010, has furnished the requisite information with comments & explanations; however the final disposal by the concerned authority is awaited.

5. Secured Loans:

Interest accrued & due (Rs. 14,338,178/-) on term loan from State Bank of India includes interest (Rs.9,119,886/-) for the months of January, 2011, the said amount remained unpaid at the close of the year. Interest accrued & due (Rs, 8,469,291/-) on term loans of State Bank of Indoa & Punjab National Bank respectively, for the month of March, 2011 was paid in April, 2011. THe installment of term lan (State Bank of India) to the tune of Rs. 4,000,000/-, due and payable till March, 2011 also remained unpaid.

6. Unsecured Loans:

-Unsecured loans from Directors (Rs. 135,213,251) & Oriniters (Rs, 152,590,017) are exempt deposit, in conformity with the provisions of Sections 58A & 58AA & other relevant applicable provisions of the Companies Act, 1956 & the rules framed thereunder.

- Unsecured loans from promoters were raosed in pursuance of stipulations of Banks.

- The Company has not entered into any contractual agreement (s) with the above referred parties (others with regard to repayment/refund or payment of interest etc

7. Fixed Assets: Capital-Work-in-Progress (Rs.10,826,89 lacs) comprised of;

Building (under-construction Rs. 4,754,15 lacs), Plant & Machinery and Miscellaneous FIxed Assets (under-installation Rs. 1,414,02 lacs & Rs. 982,58 lacs respectively).

8. - The Project is still under implementation and the Company intends to capitalise Preoperative Expenses on commencement of commercial operations.

- Funds raised for the implementation of hotel project were temporarily deployed & invested in Fixed Deposits with Banks; interest paid (Rs. 77,619,061/- net of interest earned on fixed deposits Rs. 1,329,426/-) has been shown under the head Preoperative Expenses (pending capitalisation).

9. Depreciation:

- Depreciation (Rs. 1,052,068/-) on Furniture & Fixtures (Office), Equipment, Computers & Vehicles has been provided, on written down value method, as per the rates specified in Schedule XIV of the Companies Act, 1956.

-Depreciation on other assets, since under- construction/ under-installation, has not been provided; thus loss to that extent has been understated & fixed assets overstated.

10. The management has informed that:

"A" Employee Benefits

- The Company has been legally advised, regarding non application of the provision of Employees State Insurance, Provident Fund & Gratuity.

- Leave Encashment, on the basis of actual computation, is accounted for on accrual basis, during the tenure of Employment, the payment in respect thereof is made by the Company from its own funds as per the past practise consistently followed by the Company.

"B"Taxes

- The exact liability of Income Tax and other statutory dues is indeterminate pending finalisation of assessments and no undisputed amounts (except Fringe Benefit Tax- Rs. 66,070/-) /disputed amounts outstanding or remained unpaid as at 31st March, 2011.

"C" Others

- Share Application Money (pending allotment Rs. 80,300,000/-) - shares have not been allotted & statutory period in respect of the allotment has not yet elapsed.

11. Borrowing Costs (AS-16)

Interest (Rs. 78,267,690/-) paid to banks, during the year, has been capitalised and set out under the head Building.

12. Segment Reporting (AS-17)

The business operations remained suspended & the Company did not carry on any activity, hence the Company has nothing to report on Accounting Standard - 17 issued by the Institute of Chartered Accountant of India (ICAI).

13. Related Party Disclosures (AS-18)

a) Related Parties & their relationships:

i) Key Management Personnel

-Haravtar Singh Arora (Managing Director)

-Ajit Pal Singh (Director)

ii) Relatives of Key Management Personnel

-Paramjit Singh

iii) Individuals controlling or having substantial interest

-Aimair Singh Bhullar

14.Land (Leasehold) Was allotted by the Chandigarh Administration to the Company Accounting Standard- 19 excludes lease agreements to use land.

15. Deferred Tax Assets & Liablities(AS-22)

The Existance of unabsorbed depreciation and carry forward losses under tax laws (relating to suspended business activity) and in absence of virtual certainty of sufficient future taxable income and non Commencement of commercial operations;the deferred tax has not beeen recognised as a measure of prudence.

16. Micro, Small & Medium Enterprises

There is no repoted Micro, Small & Medium Enterprises as defined the Micro, Small & Medium Enterprises (Development) Act 2006, to whom the Company owes dues.

17. Statutory books, as required under the Companies Act, 1956, are being updated.

18. Managerial Remuneration

No Managerial Remuneration has been paid during the year in wake of losses incurred by the Company.

19. The Company did not carry on any manufacturing activity, therefore, the provisions of paragraphs 3, 4-cand 4-D of part-II of Schedule VI of the Companies Act 1956 are not applicable to the Company.

20. Figures for previous year have been regrouped/rearranged, Where Considered necessary.

21. Figures have been rounded off to nearest rupees.


Mar 31, 2010

1. There were capital contracts pending execution as on 31stMarch, 2010 is Rs. 362.03 lacs- net of advances (previous year Rs. 969.05 lacs).

2. The management as advised by an expert, is of the opinion that the provisions of Employees State Insurance & Provident Fund are not applicable to the Company; however in respect of the employees of the contractors such payments have been borne by the employer (contractor).

3. The Company had filed a writ petition in the Honable High Court of Punjab & Haryana for restoration of site. The division bench of the Honable High Court of Punjab & Haryana vide its order dated 24th February, 2009 finally decided the case in favour of the Company & clarified that the hotel building should now be completed within a period of eleven and a half months, beginning from the date of receipt of a copy of the said order. Construction of Building was completed within the time granted by Honable High Court of Punjab & Haryana, thereafter the Company, before the expiry of the extended period (i.e. 09th March, 2010) applied to S.D.O. (B), Chandigarh for grant of completion/occupation certificate.

4. Based on the submissions made by the Company, the internal committee of Bombay Stock Exchange Limited vide its order no. DCS/COMP/OT/KK/298/2009-10 dated 27th November,2009, revoked the suspension in the trading of securities of the Company subject to certain compliances i.e. payment of re-instatement penalty of Rs. 3.60 lacs, submission of Directors profile, Company profile & undertaking from the Company.

5. In the opinion of the Directors, "Current Assets" and "Loans & Advances" are approximately of the value stated in the Balance sheet, if realised in the ordinary course of business and to the best of their knowledge provisions for all the known liabilities have been made and, as certified, all the contractual and statutory obligations have been duly complied with.

6. The management has informed that party balances, in certain cases, are under reconciliation & subject to confirmation; however the same have been incorporated in the financial statements at the value as per the books of account & are considered hopeful of recovery/good for payment therefore provision for bad & doubtful debts / unclaimed balances is not required.

7. Unsecured Loans:

- Unsecured loans from Promoter Directors (Rs 184,973,234/-) are exempt deposit, in conformity with the provisions of Sections 58A & 58AA and other relevant applicable provisions of the Companies Act, 1956 and the rules framed there under Unsecured loans from promoter directors were raised in pursuance of stipulations of financial institutions.

The Company has not entered into any contractual agreement(s) with the above referred parties (others) with regard to repayment/refund or payment of interest etc.

8. Fixed Assets:

Capital-Work-in-Progress (Rs. 6,384.43 lacs) includes (Rs 2,446.85 lacs) incurred, during the year on implementation of Hotel Project. The total expenditure i.e. (Rs. 6,384.43lacs) comprises of Building (under construction Rs. 3,274.51 lacs), Plant & Machinery and Miscellaneous Fixed Assets (under installation Rs. 1,029.09 lacs & Rs. 241.20 lacs respectively) and Preoperative Expenses (pending capitalisation Rs. 1839.63 lacs). The said amount will be capitalised on completion of building & installation of Plant & Machinery and Miscellaneous Fixed Assets.

9. - The project is still under implementation and the Company intends to capitalise Preoperative Expenses on commencement of commercial operations.

Funds raised for the implementation of hotel project were temporarily deployed & invested in Fixed Deposits with Banks; interest earned (Rs.1,160,065/-)has been setoff against interest paid (net interest -Rs. 53,633,446/-) has been shown under the head Preoperative Expenses (pending capitalisation).

10. Depreciation:

Depreciation (Rs. 856,125/-) on Furniture & Fixtures (Office), Equipment, Computers & Vehicles has been provided, on written down value method, as per the rates specified on Schedule XIV of the Companies Act, 1956.

Depreciation on other assets, since under construction/installation, has not been provided.

11. As per the unaudited accounts, published in newspapers income & expenses were shown as Nil & 13.89 lacs respectively; whereas, loss as per the audited Balance Sheet as at 31st March, 2010 is Rs. 1,357,191/- (i.e. Administrative Expenses-Rs. 501,066/- & Depreciation - Rs. 856,125/-).

12. The management has informed that:

"A" Employee Benefits

-The Company has been legally advised, that the provisions of Employees State Insurance, Provident Fund & Gratuity are not yet applicable.

- Leave Encashment, on the basis of actual computation, is accounted for on accrual basis, during the tenure of Employment, the payment in respect thereof is made by the Company from its own funds as per the past practise consistently followed by the Company.

"B"Taxes

The exact liability of Income Tax and other statutory dues is indeterminate pending finalisation of assessments and no undisputed amounts (except Fringe Benefit Tax-Rs. 66,070/-)/disputed amounts outstanding or remained unpaid as at 31st March, 2010.

The existence of unabsorbed depreciation and carry forward losses under tax laws (relating to suspended business activity) and in absence of virtual certainty of sufficient future taxable income and non commencement of commercial operations; the deferred tax has not been recognized as a measure of prudence.

"C" Others

Share Application Money (pending allotment Rs. 80,300,000/-) - shares have not been allotted & statutory period in respect thereof has not yet elapsed.

Land (Leasehold) was allotted by the Chandigarh Administration to the Company; Lease agreements to use land are not covered by Accounting Standard -19.

13. Segment Reporting (AS-17)

The business operations remained suspended & the Company did not carry on any activity, hence the Company has nothing to report on Accounting Standard - 17 issued by the Institute of Chartered Accountant of India (ICAI).

14. Related Party Disclosures (AS-18)

- Key Management Personnel & their relatives. All the directors are independent & not related to each other

15. The Company has not received any communication from any of its suppliers/service providers confirming that they are registered under the Micro, Small and Medium Enterprises Development Act, 2006. In the absence of any positive confirmation the information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 could not be determined.

16. Statutory books, as required underthe CompaniesAct, 1956, are being updated.

17. Managerial Remuneration

No Managerial Remuneration has been paid during the year in wake of losses incurred by the Company.

18. The Company did not carry on any manufacturing activity, therefore, the provisions of paragraphs 3,4-C and 4-D of Part-ll of Schedule VI of the Companies Act, 1956 are not applicable to the Company.

19. Figures for previous year have been regrouped/rearranged, where considered necessary.

20. Figures have been rounded off to nearest rupees.

 
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