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Notes to Accounts of Kamat Hotels (India) Ltd.

Mar 31, 2015

1 CORPORATE INFORMATION:

Kamat Hotels (India) Limited ("the Company" or"Kamats") was incorporated in India on 21st March, 1986 as a public limited Company under the Companies Act, 1956 with its registered office located in Mumbai. The Company went public in April 1994 and the shares are currently listed on Bombay Stock Exchange and National Stock Exchange.

Kamats is operating in hospitality sector, with its hotels and restaurants located in the states of Maharashtra (Mumbai, Nashik, Pune, Murud, Manor, Panvel and Wagunde), Goa (Benaulim) and Orissa (Puri, Konark), Kamats also manages hotels and restaurants owned by others at Aurangabad, Pune, Shahpur, Nashikand Solapur.

2.1 The Company''s business, inter-alia, is to sell Time Share and provide holiday facilities to members for a specified period each year, over a number of years, for which membership fees is collected either in full upfront, or on a deferred payment basis. Out of the total membership fee, relevant portion reasonably attributable towards cost required to market Time Share, which is assessed and revised periodically, is recognized as Time Share income in the year in which the purchaser of Time Share becomes a member and the balance representing ''Advance towards members'' facilities is being recognized as Time Share income equally over a period for which holiday facilities are provided commencing from the year in which the member is entitled to benefits of membership under the scheme. Annual subscription fee dues from Times Share members is recognized as income.

2.1.2 DefinedBenefitPlan:

The employees'' gratuity fund scheme managed by Life Insurance Corporation of India is a defined benefit plan. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognises each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation. The obligations for leave encashment is recognised in the same manner as gratuity.

The estimates of rate of escalation in salary considered in actuarial valuation, take into account inflation, seniority, promotion and other relevant factors including supply and demand in the employment market. The above information is certified by the actuary.

The expected rate of return on plan asset is determined considering several applicable factors, mainly the composition of Plan assets held, assessed risk, historical results of return on plan assets and the Company''s policy for plan assets management.

2.3 Payment of remuneration to Dr. Vithal V. Kamat, Executive Chairman and Managing Director (ECMD) for the period from 1st October, 2010 to 30th September, 2013 was approved by the shareholders of the Company in the Annual General Meeting held on 25th September, 2010. However, in view of loss for the year ended 31st March, 2014, there was an excess remuneration of Rs. 24.72 lakhs for the period from 1st April, 2013 to 30th September, 2013 paid to ECMD and in terms of the decision of the Remuneration Committee in its meeting held on 28th May, 2014, the Company had made an application to the Central Government for waiver of recovery of the above excess remuneration. In the absence of such approval the Company has recovered the above excess remuneration during the year and included in other income in Note 25. Remuneration for the subsequent period from 1st October, 2013 and onwards has already been approved by the shareholders in the Annual General Meeting held on 21st September,2013 and by the Central Government vide approval dated 10th January, 2014. which is valid till 30th September, 2016.

3.1 The Municipal Corporation of Greater Mumbai (MCGM) has raised an additional demand for property tax ofRs. Nil lakhs (Previous Year Rs. 56.91 lakhs) for the year 2014-2015 in respect of Company''s hotels and offices based on newly introduced capital value method w.e.f 01.04.2010. The Company has filed objections to the said valuation which are pending disposal by MCGM in respect of The Orchid, Mumbai and The Orchid Privi Wing Mumbai. In respect of Company''s offices and Hotel Vits Mumbai, the Company has filed appeals before the appropriate Court, Mumbai which are pending. Pending such disposal, the Company has made provision for the same on the basis of invocies raised by MCGM and adjustment, if any will be made on disposal of Company''s objections and appeals.

3.2 The Company has paid Rs. 1.25 Lakhs (Previous YearRs. Nil) as tax audit fees, Rs. 0.25 Lakhs (Previous yearRs. Nil ) for attending to taxation matter, Rs. 0.60 Lakhs (Previous yearRs. Nil) for VAT audit fees and Rs. 0.26 lakhs (Previous YearRs. Nil) as service tax thereon to a partner of the auditors.

4.1 Interest expense includeRs. 1,085.61 lakhs (Prev. YearRs. Nil) being additional interest relating to period upto 31st March, 2014 payable on loans which was nececciated due to withdrawal of CDR Scheme during the year.

4.2 Reference is invited to note 39 relating to non provision of interest for the year due to disputes with certain lenders.

Rs In Lakhs

I Contingent liabilities:

AS AT 31ST AS AT 31ST MARCH, 2015 MARCH, 2014 A Claims Against Company / Disputed liabilities not acknowledged as debts.

i) DisputedIncome TaxDemand 261.91 164.53

ii) DisputedIndirectTaxDemand Nil 111.69

iii) OpenimportLicence 45.51 38.18

iv) Claims against the Company not acknowledged as debt. 584.83 59.00

v) Other Matters disputed 110.83 94.48

The Company is hopeful that on disposal of litigations as referred to in item (i) to (v)above, the disputed demands will not survive. In the event any of the said litigation is held against the company, it will be liable to pay the demand raised alongwith applicable interest thereon, which is presently unascertainable.

iv) The Company has put up an STP Unit on an adjacent immovable property owned by Kamats Amusements Private Limited in earlier years for its Orchid Hotel, Mumbai and continues to use the same. The Company is obliged to compensate appropriately to the owner for such user of property as explained in the Explanatory Statement under section 393 of the Companies Act ,1956 to the notice convening the meeting of the shareholders of the Company on 22nd October 2005 pursuant to Bombay High Court Order dated 2nd September 2005 and as approved by the Board of Directors of the Company in the meeting held on 26th July 2008. The modalities are being worked out.

v) Certain ex-employees of the Company have demanded re-instatement of their service along with arrears of wages, which is contested by the Company and the amount is indeterminate.

Note: Since the Diluted EPS in the previous year was anti-dilutive , the effect of anti-dilutive potential equity share was ignored in calculating diluted EPS in terms of Accounting Standard - 20 - Earnings per share (AS - 20)

5 Segment Reporting

The Company''s activities involve predominantly providing hospitality related services, which is considered to be a single business segment since these are subject to similar risks and returns. Further, services are not provided out of India and hence there are no reportable geographical segments. Accordingly, the financial statements are reflective of the information required by Accounting Standard 17 - Segment Reporting (AS-17).

6 Related Party Disclosures:

Related Parties where control exists:

(a) Subsidiary Companies:

Orchid Hotels Pune Private Limited (Formerly B W Highway Star Private Limited)

Fort Jadhav Gadh Hotels Private Limited Fort Mahodadhinivas Palace Private Limited Kamats Restaurant (India) Private Limited Green Dot Restaurants Private Limited

(b) Fellow Subsidiary Company:

Fort Jadhav Gadh Hotels Private Limited - (Ceased to be a fellow subsidiary w.e.f 1st March, 2014).

(c) Jointly Controlled Entity:

Ilex Developers and Resorts Limited (JointVenture)

(d) List of Associate Companies where control exists and with whom transactions have taken place during the year/ previous year:

Plaza Hotels Private Limited

Kamats Holiday Resorts (Silvassa) Limited

Kamats Amusements Private Limited

Talent Hotels Private Limited

Nagpur Ecohotel Private Limited

VITS Hotels (Bhubaneswar) Private Limited

(e) Key Management Personnel and their relatives:

Dr. Vithal V. Kamat - Executive Chairman & Managing Director

Mr. Ramesh N. Shanbhag - Whole Time Director (Resigned with effectfrom 30th August, 2013)

Mr. Vikram V. Kamat - Executive Director (Resigned during the year w.e.f 20th December, 2014 as Executive Director but continues as a Director and also relative.)

Mrs. Vidya V. Kamat - Relative

Mr. Vishal V. Kamat - Chief Executive Officer of Fort Jadhavgadh, Pune and a relative

(f) Other Related parties where key managerial personnel are able to exercise significant influence and with whom transactions have been taken place during the year:

Vithal . V. Kamat HUF

(g) Summary of transactions during the year with Related Parties entered into on commercial basis in the interest of the Company and approved by the Board and status ofoutstanding balances as on 31st March, 2015:

7 Leases

The Company''s significant leasing arrangements are in respect of operating leases for premises. These leasing arrangements, which are not non-cancelable, range between eleven months and Nine years generally or longer and are usually renewable by mutual consent on mutually agreeable terms.

The aggregate lease rentals payable are charged as rent and aggregate licence fees income from shops and other spaces on leave and licence basis are shown as Licence Fees.

Future commitments in respect of minimum lease payments payable for non-cancelable operating leases (other than land) entered into by the Company:

7.1 The Company has given a portion of its hotel buildings at the Orchid, Mumbai and VITS, Mumbai to party to conduct, operate and manage the banquet halls and restaurant under lease agreements during the year. The Company is entitled to fixed fee of a seven percent of the annual turnover of the banquet halls and restaurant. The Company has received the fee ofRs. 96.79 lakhs (Previous Year Rs. Nil) for the year which is included in Note 24.

8 Joint venture

In compliance with Accounting Standard 27 - ''Financial Reporting of Interests in Joint Ventures'' - (AS 27 ), notified by the Companies (Accounting Standards) Rules, 2006, the Company has interest in the following jointly controlled entities:

8.1 The Company has received Long Term trade Deposit ofRs. 80.00 lakhs (Previous YearRs. 80.00 lakhs) from the above Company as a security for the hotel property given for development and expansion for a period of twenty years.

8.2 Figures in the bracket are for previous year.

c Dividend to Non-resident Shareholders:

The Company has not made any remittance in Foreign Currencies on account of dividends during the year under report and does not have information as to the extent to which remittance in foreign currencies on account of dividends have been made by or on behalf of non-resident shareholders. The particulars of non-resident shareholders are as follows:

9 Pursuant to notification of Schedule II to the Companies Act, 2013 with effect from 1st April, 2014, depreciation for the year ended 31st March, 2015 has been provided on the basis of useful lives as prescribed therein except in respect of items of plant and machinery costing Rs. 10,000/- or less which are depreciated fully in the year of acquisition. Accrodingly, depreciation for the year ended 31st March, 2015 is higher by Rs. 150.78 lakhs due to change in the estimate of useful life of certain assets and an amount ofRs. 560.02 lakhs (Net of deferred tax) has been recognized in the opening balance of retained earnings in respect of assets in respect of which useful life is Nil.

10 The Company has borrowed funds from various banks, financial institutions and certain NBFCs in the past. Due to financial crisis faced by economic slow down and other factors, it was unable to repay its loan obligations in the year 2012-2013 and accordingly it had applied for debts restructuring under Corporate Debt Restructuring (CDR) mechanism. A majority of lenders participate in the CDR. A CDR package was worked out under which the debts of the participating lenders were restructured certain rate concessions were given and unpaid interest was converted into funded interest loan. Under the restructure scheme, the Company was obliged to pay a part of the borrower by 31.03.2014 to certain lenders out of sale proceeds of one of its hotel units. Despite best effort, the Company could not dispose off the said unit by 31.03.2014. Accordingly, Asset sale Committee formed by the lenders as per the direction of the CDR EG Committee approved the withdrawal of Company''s name from the CDR mechanism on account of failure in the meeting held on 23.07.2014. Due to failure of the CDR mechanism on account and due to financial stringencies, the Company could not repay the loan and interest dues to its lenders, including to those lenders who did not participating in CDR package during the year Consequently, the lenders issued notices Under Section 13(2) of the (The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002) and recalled the entire dues during the year. The Company has disputed the same. One of the lenders filed suit for recovery of the entire dues after the close of the financial year, which is pending before the Bombay High Court and the Company has disputed the claim Reference is invited to Notes 6.5 and 31regarding disputed interest and charges aggregating to Rs. 530.03 lakhs, which have not been provided in the accounts.

11 Company''s accumulated losses are in excess of its paid up Capital and reserves and surplus. As explained in Note 39, some of the lenders have recalled their loans. However, considering the future business prospects, the fact that four major lenders have assinged their loans and major part of the loans has been re-structured and that the fair values of the assets of the Company are far more than the liabilities, the financial statements have been prepared on a going concern basis.

12 Figures of the previous year have been regrouped /reclassified wherever necessary to conform to the Current year''s presentation.


Mar 31, 2014

1 CORPORATE INFORMATION:

Kamat Hotels (India) Limited ("the Company" or "Kamats") was incorporated in India on 21st March, 1986 as a public limited Company under the Companies Act, 1956 with its registered office located in Mumbai. The Company went public in April 1994 and the shares are currently listed on Bombay Stock Exchange and National Stock Exchange.

Kamats is operating in hospitality sector, with its hotels and restaurants located in the states of Maharashtra (Mumbai, Nashik, Pune, Murud, Manor, Panvel and Wagunde), Goa (Benaulim) and Orissa (Puri, Ramchandi). Kamats also manages hotels and restaurants owned by others at Aurangabad, Pune, Thane, Kalyan, Shahpur, Nashik, Mulsi Dam and Solapur.

2.1 The above deposits include Rs. 80.00 Crores (Previous Year Rs. 80.00 Crores) paid to Plaza Hotels Private Limited for hotel properties (a Company wherein some directors of the Company are directors).

3.1 Payment of taxes is net of provision for tax of Rs. 1,004.25 lakhs (Previous Year Rs. 928.20 Lakhs).

3.2 Include advances to suppliers and for expenses.

4.1 The Company''s business, inter-alia, is to sell Time Share and provide holiday facilities to members for a specified period each year, over a number of years, for which membership fees is collected either in full upfront, or on a deferred payment basis. Out of the total membership fee, relevant portion reasonably attributable towards cost required to market Time Share, which is assessed and revised periodically, is recognized as Time Share income in the year in which the purchaser of Time Share becomes a member and the balance representing ''Advance towards members'' facilities is being recognized as Time Share income equally over a period for which holiday facilities are provided commencing from the year in which the member is entitled to benefits of membership under the scheme. Annual subscription fee dues from Times Share members is recognized as income.

4.1.2 Defined benefit Plan:

The employees'' gratuity fund scheme managed by Life Insurance Corporation of India is a Defined benefit plan. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognises each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation. The obligations for leave encashment is recognised in the same manner as gratuity.

5.1 Payment of remuneration to Dr. Vithal V. Kamat, Executive Chairman and Managing Director (CMD) for the period from 1st October, 2010 to 30th September, 2013 was approved by the shareholders of the Company in the Annual General Meeting held on 25th September, 2010. However, in view of loss for the year ended 31st March, 2014, there is an excess remuneration of Rs. 24.72 lakhs for the period from 1st April, 2013 to 30th September, 2013 (Previous year Rs. 48.78 lakhs for full year) paid to CMD and in terms of the decision of the Remuneration Committee in its meeting held on 28th May, 2014, the Company is proposing to make an application to the Central Government for waiver of recovery of above excess remuneration and the required particulars are being placed before the shareholders in the ensuing Annual General Meeting of the Company. Accordingly, the above remuneration is subject to these approvals. Remuneration for the subsequent period from 1st October, 2013 and onwards has already been approved by the shareholders in the Annual General Meeting held on 21st September, 2013 and by the Central Government vide approval dated 10th January, 2014, which is valid till 30th September, 2016.

6.1 The Municipal Corporation of Greater Mumbai (MCGM) has raised an additional demand for property tax of Rs. 56.91 lakhs (Previous Year Rs. 216.96 lakhs) for the year 2013-2014 in respect of Company hotels and offices based on newly introduced capital value method during the previous year. The Company has fled objections to the said valuation which are pending disposal by MCGM. Pending such disposal, the Company has made provision for the same and adjustment, if any will be made on disposal of Company''s objections.

7.1 The Company had executed an Agreement-cum-Memorandum of Undertaking with a party to dispose off its VITS Hotel, Bhubaneswar on 27th April, 2013 on as is where basis for an agreed consideration, against which an earnest money deposit of Rs. 300.00 lakhs was paid by the said party pending completion of stipulated obligations by both the parties to complete the sale, which was to be adjusted against the agreed sale consideration. The Company completed its obligations but the said party did not complete its obligations under the above agreement within the agreed time and time was the essence of the agreement. Accordingly and as provided in the aforesaid agreement, the deal has come to end and the above earnest money deposit has been forfeited by the Company during the year ended 31st March, 2014 and included as an item of Exceptional income.

7.2 In terms of the Memorandum of Understanding with a Public Trust owning a plot of land in Mumbai, the Company had paid Rs. 488.62 lakhs as security deposit and incurred expenditure of Rs. 207.93 lakhs for a proposed hospitality project on the said land in earlier years. The owner did not fulfll his obligation to complete the infrastructure for the aforesaid project despite follow up by the Company. In view of inordinate delay in the project, the expenditure incurred on the said incomplete project has been written off and a provision has been made in the previous year for the deposit paid to the said party. In the meantime, the Company had initiated legal proceedings against the owners by fling Arbitration Application before the Bombay High Court for appointment of Arbitrator. The Bombay High Court vide order dated 22nd February, 2013 has referred the matter to a sole arbitrator. The Company fled its Statement of Claims before the arbitrator. The owners also fled their reply and also made a counter claim for compensation and interest thereon before the arbitrator besides claiming that the claim of the Company was barred by limitation of time. Subsequently, vide letter dated 12th September, 2013, the arbitrator resigned and the matter could not proceed further thereafter. The Company is contemplating to approach the High Court again for directions. Adjustments, if any, to the expenditure written off and provision made as above, will be made on disposal / conclusion of the Arbitration Proceedings in the above matter.

8 Contingent Liabilities and Commitments.

Rs. In Lakhs

AS AT 31ST AS AT 31ST MARCH, 2014 MARCH, 2013

I Contingent liabilities:

A Claims Against Company /Disputed liabilities not acknowledged as debts.

i) Disputed Income Tax Demand 164.53 743.50

ii) Disputed MVAT Demand 111.69 -

iii) Open import Licence 38.18 75.61

iv) Claims against the Company not acknowledged as debt. 59.00 66.29

v) Other Matters disputed 94.48 17.72

B Guarantees:

i) Corporate guarantee given to a bank given in respect of credit facilities availed by 20,434.00 20,434.00 Subsidiary Company.

ii) Counter Guarantees issued by the Company to secure Bank Guarantees. 43.11 111.40

C Other Money for which the Company is contingently liable.

i) Obligation towards payments to project creditors of subsidiary company. - 64.01

ii) Monetary value of unredeemed points in respect of Guest Loyalty program for Sales 0.27 26.98

Promotion. D Refer Note 30.2 in respect of dispute regarding Bandra-Kurla Project

II Commitments.

A Estimated amount of capital commitments to be executed on capital accounts and not 1.20 14.22 provided for (net of advances)

B Other Commitments

i) Undertaking given by the Company in favour of a lender to repay the loan to the extent of 1,736.82 3,106.19 50% of sale proceeds of the Assets sold.

ii) Commitment to the V Privilege Scheme members for providing Hospitality services during 80.33 67.70 the year 2013-14 as per membership sale value

iii) Obligations under CDR Scheme to the lenders to repay part of the term loans and funded 22,500.00 22,500.00 interest term loan out of the sale proceeds of specified assets of the Company by 31st March, 2014, though the specified asset could not be sold as stipulated. The Company has given a proposal to the CDR lenders to repay the dues which is not yet disposed off.

iv) The Company has put up an STP Unit on an adjacent immovable property owned by Kamats Amusements Private Limited in earlier years for its Orchid Hotel, Mumbai and continues to use the same. The Company is obliged to compensate appropriately to the owner for such user of property as explained in the Explanatory Statement under section 393 of the Companies Act, 1956 to the notice convening the meeting of the shareholders of the Company on 22nd October 2005 pursuant to Bombay High Court Order dated 2nd September 2005 and as approved by the Board of Directors of the Company in the meeting held on 26th July 2008. The modalities are being worked out.

v) Certain ex-employees of the Company have demanded re-instatement of their service along with arrears of wages, which is contested by the Company and the amount is indeterminate.

9 Segment Reporting

The Company''s activities involve predominantly providing hospitality related services, which is considered to be a single business segment since these are subject to similar risks and returns. Further, services are not provided out of India and hence there are no reportable geographical segments. Accordingly, the financial statements are refective of the information required by Accounting Standard 17 - Segment Reporting (AS-17).

10 Related Party Disclosures: Related Parties where control exists:

(a) Subsidiary Companies:

Orchid Hotels Pune Private Limited (Formerly B W Highway Star Private Limited)

Fort Jadhav Gadh Hotels Private Limited

Fort Mahodadhinivas Palace Private Limited

Kamats Restaurant (India) Private Limited

Green Dot Restaurants Private Limited

(b) Fellow Subsidiary Company:

Jadhav Gadh Hotels Private Limited - (Ceased to be a fellow subsidiary w.e.f 1st March, 2014).

(c) Jointly Controlled Entity:

Ilex Developers and Resorts Limited (Joint Venture)

(d) List of Associate Companies where control exists and with whom transactions have taken place during the year:

Plaza Hotels Private Limited

Kamats Holiday Resorts (Silvassa) Limited

Vishal Amusements Limited

Indira Investments Private Limited

Kamburger Foods Private Limited:

Kamat Eateries Private Limited

Kamats Amusements Private Limited

Talent Hotels Private Limited

Karaoke Amusements Private Limited

Karwar Hotels Private Limited

Busybee Developers Private Limited

Grasshoppers Developers Private Limited

Nagpur Ecohotel Private Limited

VITS Hotels (Bhubaneswar) Private Limited

(e) Key Management Personnel and their relatives:

Dr. Vithal V. Kamat - Executive Chairman & Managing Director

Mr. Ramesh N. Shanbhag - Whole Time Director (Resigned during the year with effect from 30th August, 2013)

Mr. Vikram V. Kamat - Executive Director & also relative

Mrs. Vidya V. Kamat - Relative

Mr. Vishal V. Kamat - Chief Executive officer of Fort Jadhavgadh, Pune and a relative

(f) Other Related parties where key managerial personnel are able to exercise significant infuence and with whom transactions have been taken place during the year : Vithal . V. Kamat HUF

(g) Summary of transactions during the year with Related Parties entered into on commercial basis in the interest of the Company and approved by the Board and status of outstanding balances as on 31st March, 2014:

11 Leases

The Company''s significant leasing arrangements are in respect of operating leases for premises. These leasing arrangements, which are not non-cancelable, range between eleven months and Nine years generally or longer and are usually renewable by mutual consent on mutually agreeable terms.

The aggregate lease rentals payable are charged as rent and aggregate licence fees income from shops and other spaces on leave and licence basis are shown as Licence Fees.

Future commitments in respect of minimum lease payments payable for non-cancelable operating leases (other than land) entered into by the Company:

12 Joint venture

In compliance with Accounting Standard 27 – ''Financial Reporting of Interests in Joint Ventures'' – (AS 27 ), notifed by the Companies (Accounting Standards) Rules, 2006, the Company has interest in the following jointly controlled entities:

13.1 Figures in the bracket are for previous year.

13.2 The Company has received Long Term trade Deposit of Rs. 700.00 lakhs (Previous Year Rs. 700.00 lakhs) from the above Company as a security for the hotel property given for development and expansion for a period of twenty years out of which Rs. 620.00 lakhs (Previous year Nil) has been refunded during the year by mutual consent.

14 Figures of the previous year have been regrouped /reclassified wherever necessary to conform to the Current year''s presentation.


Mar 31, 2013

1 CORPORATE INFORMATION:

Kamat Hotels (India) Limited ("the Company" or "Kamats") was incorporated in India on 21st March, 1986 as a public limited Company under the Companies Act, 1956 with its registered offce located in Mumbai. The Company went public in April 1994 and the shares are currently listed on Bombay Stock Exchange and National Stock Exchange.

Kamats is operating in hospitality sector, with its hotels and restaurants located in the states of Maharashtra (Mumbai, Nashik, Pune, Murud, Manor, Panvel, Kudal, Wagunde and Navi Mumbai), Goa (Benaulim) and Orissa (Puri, Ramchandi). Kamats also manages hotels and restaurants owned by others at Aurangabad, Pune, Panvel, Thane, Kalyan, Shahpur, Nashik, Mulsi Dam and Navi Mumbai.

2.1 In terms of the Memorandum of Understanding with a party owning a plot of land in Mumbai, the Company had paid Rs. 488.62 lakhs as security deposit and incurred expenditure of Rs. 207.93 lakhs for a proposed hospitality project on the said land in earlier years. The owner did not fulfll his obligation to complete the infrastructure for the aforesaid project despite follow up by the Company. In view of inordinate delay in the project, the expenditure incurred on the said incomplete project has been written off and a provision has been made in the current year for the deposit paid to the said party. In the meantime, the Company has initiated legal proceedings against the owners by fling Arbitration Application before the Bombay High Court for appointment of Arbitrator. The Bombay High Court vide order dated 22nd February, 2013 has referred the matter to a sole arbitrator and further proceedings including fling a claim in the matter by the Company is in progress. Adjustments, if any, to the expenditure written off and provision made as above, will be made on disposal of the Arbitration Proceedings in the above matter.

3 Segment Reporting

The Company''s activities involve predominantly providing hospitality related services, which is considered to be a single business segment since these are subject to similar risks and returns. Further, services are not provided out of India and hence there are no reportable geographical segments. Accordingly, the fnancial statements are refective of the information required by Accounting Standard 17 - Segment Reporting (AS-17) as notifed by the Companies (Accounting Standards) Rules, 2006.

4 Related Party Disclosures: Related Parties where control exists:

(a) Subsidiary Companies:

Orchid Hotels Pune Private Limited (Formerly B W Highway Star Private Limited)- (w.e.f 21st May, 2009) Fort Jadhav Gadh Hotels Private Limited- (w.e.f 20th February, 2012) Fort Mahodadhinivas Palace Private Limited - (w.e.f 30th April, 2011) Kamats Restaurant (India) Private Limited- (w.e.f 28th May, 2011) Green Dot Restaurants Private Limited- (w.e.f 25th October, 2012)

(b) Jointly Controlled Entity:

Ilex Developers and Resorts Limited (Joint Venture) (w.e.f. 1st March, 2010)

(c) List of Associate Companies where control exists and with whom transactions have taken place during the year:

Plaza Hotels Private Limited

Kamats Holiday Resorts (Silvassa) Limited

Vishal Amusements Limited

Indira Investments Private Limited

Kamburger Foods Private Limited:

Kamat Eateries Private Limited

Kamats Amusements Private Limited

Talent Hotels Private Limited

Karaoke Amusements Private Limited

Karwar Hotels Private Limited

Busybee Developers Private Limited

Grasshoppers Developers Private Limited

Nagpur Ecohotel Private Limited

VITS Hotels (Bhubaneswar) Private Limited

(d) Key Management Personnel and their relatives:

Dr. Vithal V. Kamat - Executive Chairman & Managing Director

Mr. Ramesh N. Shanbhag - Whole Time Director

Mr. Vikram V. Kamat - Executive Director & also relative

Mrs. Vidya V. Kamat - Relative

Mr. Vishal V. Kamat - Chief Executive Offcer of Fort Jadhavgadh, Pune and a relative

(e) Other Related parties where key managerial personnel are able to exercise signifcant infuence and with whom transactions have been taken place during the year :

V. V. Kamat HUF

(f) Summary of transactions during the year with Related Parties entered into on commercial basis in the interest of the Company and approved by the Board and status of outstanding balances as on 31st March, 2013:

5 Leases

The Company''s signifcant leasing arrangements are in respect of operating leases for premises. These leasing arrangements, which are not non-cancelable, range between eleven months and Nine years generally or longer and are usually renewable by mutual consent on mutually agreeable terms.

The aggregate lease rentals payable are charged as rent and aggregate licence fees income from shops and other spaces on leave and licence basis are shown as Licence Fees.

6 Income Tax

Provision for tax for the year has been made at Rs. 152.00 lakhs under normal provisions of Income Tax Act (Previous year Rs. 14.00 lakhs u/s 115JB of the Act).

In accordance with Guidance Note issued by The Institute of Chartered Accountants of India, the Company (i) has recognised MAT Credit Entitlement of Rs. Nil (Previous Year Rs. 14.00 lakhs) and (ii) has availed MAT Credit of Rs. 152.00 lakhs (Previous Year Rs. Nil) against Provision for Current tax for the year.

7 Subsidiary Company

In terms of the Minutes of the Order by consent dated 10th February, 2010 of the High Court of Bombay, the Company had agreed to buy the remaining 25% being 29,41,176 shares of Orchid Hotels Pune Private Limited (OHPPL) (formerly B W Highway Star Private Limited) held by minority shareholders for a consideration of Rs. 2,400.00 Lakhs, which was agreed to be paid over a period of three years accordingly the company paid the last of the installment during the year and acquired the remaining shares making its holding to 100%.

8 Joint venture

In compliance with Accounting Standard 27 – ''Financial Reporting of Interests in Joint Ventures'' – (AS 27 ), notifed by the Companies (Accounting Standards) Rules, 2006, the Company has interest in the following jointly controlled entities:

8.1 Figures in the bracket are for previous year.

8.2 The Company has received Long Term trade Deposit of Rs. 700.00 lakhs (Previous Year Rs. 700.00 lakhs) from the above Company as a security for the hotel property given for development and expansion for a period of Twenty years.

9 Figures of the previous year have been regrouped /reclassifed wherever necessary to conform to the Current year''s presentation.


Mar 31, 2012

1 CORPORATE INFORMATION:

Kamat Hotels (India) Limited ("the Company" or "Kamats") was incorporated in India on 21st March, 1986 as a public limited Company under the Companies Act, 1956 with its registered office located in Mumbai. The Company went public in April 1994 and the shares are currently listed on Bombay Stock Exchange and National Stock Exchange.

The Company is operating in hospitality sector, with its hotels and restaurants located in the states of Maharashtra (Mumbai, Nashik, Pune, Murud, Manor, Panvel, Kudal, Nigdi and Navi Mumbai), Goa (Benaulim) and Orissa (Puri, Ramchandi, Konark, Dhauli, and Cuttack). The Company also manages hotels and restaurants owned by others at Aurangabad, Pune, Thane, Kalyan, Nashik and Navi Mumbai.

2.1 Terms/ rights attached to equity shares

The Company has only one class of equity shares having a face value of Rs. 10/- per share. Each holder of equity share is entitled to one vote per share. The Company declares and pays dividend in Indian rupees.

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity share held by the shareholders.

2.2 The Company allotted 40,52,189 (Previous Year 18,43,810) Equity Shares of Rs. 10/- each as fully paid up at a premium of Rs. 125/- per Equity Share to the FCCB holder on conversion of balance FCCBs during the year (Refer Note 10.2).

3 COMPOSITE SCHEME OF ARRANGEMENT AND AMALGAMATION:

In terms of the "Composite Scheme of Arrangement and Amalgamation" ("the Scheme") for (i) amalgamation of Kamat Holiday Resorts Private Limited (KHRPL) and Kamats Restaurants Private Limited (KRPL) into the Company; and (ii) Demerger of "Lotus Resorts Goa Undertaking' (Lotus Resorts, Goa) of Kamats Holiday Resorts (Silvassa) Limited (KHRSL) and merger thereof into the Company, as approved by the Shareholders of the Company in the court convened meeting held on 24th September, 2011 and subsequently sanctioned by the Hon'ble High Court of Judicature at Bombay under Section 391 to 394 of the Companies Act, 1956 vide its Order dated 13th January, 2012, a certified copy thereof has been filed with the Registrar of Companies on 25th February, 2012, all the assets and liabilities of the said erstwhile KHRPL and KRPL and all the assets and liabilities pertaining to Lotus Resorts, Goa, erstwhile undertaking of KHRSL were transferred and vested in the Company with effect from the appointed date being 1st April, 2011 and the aforesaid Scheme has been given effect to in the accounts for the year ended 31st March, 2012 as under:

(i) Amalgamation of Kamat Holiday Resorts Private Limited (KHRPL) and Kamats Restaurants Private Limited (KRPL) into the Company:

(a) KHRPL was engaged in the business of resort and was running the 40 Room resort at Murud, Dapoli in the name of "Lotus Beach Resort, Murud". KRPL was engaged in the business of Restaurants and was running the Restaurants across Maharashtra in the name of "Vithal Kamats Original Family Restaurants".

(b) The entire business and undertaking of the erstwhile KHRPL and KRPL including all the assets, liabilities, debts and obligations, and related to the period up to the Effective Date i.e. 25th February, 2012 have been incorporated in the books of account of the Company as per "Pooling of Interest" method as prescribed by Accounting Standard (AS-14) - "Accounting for Amalgamation" notified by the Companies (Accounting Standards) Rules, 2006.

(c) The excess of book value of the net assets of the erstwhile KHRPL and KRPL over the paid up value of the equity shares to be issued to the shareholders of the erstwhile KHRPL and KRPL has been credited to "Amalgamation Reserve Account". Further all the reserves including Share Premium and Profit and Loss Account of the erstwhile KHRPL and KRPL as on 1st April, 2011 have been transferred to the respective reserves account in the books of the Company. Further all inter-company loans, advances, deposit balances and other obligations between the erstwhile KHRPL and KRPL on one hand and the Company on the other hand have been eliminated.

(d) 6,07,142 Equity Shares of Rs. 10/- each, fully paid up are to be issued to the equity shareholders of the erstwhile KHRPL without payment being received in cash and 17,41,072 Equity Shares of Rs. 10/- each, fully paid up are to be issued to the equity shareholders of the erstwhile KRPL without payment being received in cash. These shares will be issued after the expiry of the "Offer Period", in respect of open offer made by erstwhile FCCB holder, the Acquirer, which is presently open.

(e) From the Effective Date, the Authorized Share Capital of KHRPL and KRPL, the amalgamating companies, has been added to the Authorized Share Capital of the Company and accordingly the Authorized Capital of the Company has become Rs. 34,25,00,000/- divided into 3,42,50,000 Equity Shares of Rs. 10/- each.

(ii) Demerger of "Lotus Resorts Goa Undertaking' (Lotus Resorts, Goa) of Kamats Holiday Resorts (Silvassa) Limited (KHRSL)

and merger thereof into the Company:

(a) KHRSL is engaged in the business of resort and was, interlaid, owning and running the 48 Room Resort with all the usual resort facilities at Goa in the name of "Lotus Resorts, Goa".

(b) With effect from the Appointed date, all the assets, rights, titles and interest of the Lotus Resorts, Goa have been transferred and vested in the Company as a going concern. Likewise all the liabilities and obligations of the Lotus Resorts, Goa including a proportion of the multipurpose borrowings outstanding on the effective date, have been transferred to the Company.

(c) The excess of book value of the net assets of erstwhile Lotus Resorts, Goa of KHRSL over the paid up value of the equity shares to be issued to the shareholders of erstwhile KHRSL has been credited to "Amalgamation Reserve Account".

(d) 5,12,821 Equity Shares of Rs. 10/- each, fully paid up are to be issued to the equity shareholders of KHRSL without payment being received in cash. These shares will be issued after the expiry of the "Offer Period", in respect of open offer made by erstwhile FCCB holder, the Acquirer, which is presently open.

(iii) Common effect:

(a) In terms of the Scheme, the closing credit balance of the Amalgamation Reserve Account of Rs. 280.06 Lakhs as disclosed herein below, shall constitute the General Reserve of the Company. However, the same shall not be utilized for the purpose of declaring dividend by the Company in future.

(c) Pending allotment of shares, the paid up value of the shares to be issued has been shown under "Share Application Money - Pending Allotment" in the Balance Sheet.

(d) Pending completion of the relevant formalities of transfer of certain assets and liabilities acquired pursuant to the Scheme of Amalgamation, certain assets and liabilities remain in the name of erstwhile KHRPL, KRPL and KHRSL and the Company has taken steps to transfer the same to its name.

(e) Since the effect of the Scheme is given from the effective date on 25th February, 2012 from the appointed date of 1st April, 2011, the financial results of the Company for the year ended 31st March, 2012 are inclusive of the figures of the erstwhile KHRPL, KRPL and Lotus Resorts, Goa, erstwhile Undertaking of KHRSL for the year ended 31st March, 2012. Consequently, the same are not comparable with the figures of the previous year.

(f) As directed by the Hon'ble High Court, the Company has made an application to the Superintendent of Stamps for the purpose of adjudication of stamp duty payable on the Scheme of Arrangement and Amalgamation. Provision for stamp duty payable will be made in the books of accounts on completion of adjudication by the stamp authorities, the amount of which is presently unascertainable.

4.1 Term loans from Banks are secured by first ranking pari-passu charge on lands at "The Orchid" at Vile Parle (East) (owned by Plaza Hotels Private Limited) together with hotel buildings and all appurtenances thereon, first ranking pari-passu mortgage on Company's immovable property being Hotel "VITS" at Andheri (East), hypothecation on movable fixed assets of Company's hotels at Fort Jadhav Gadh Pune and VITS, Nashik, Credit Card receivables, equitable mortgage of hotel property at Lotus Goa, mortgage / hypothecation of Land and Building / Other Movable assets of the Lotus Resorts, Silvassa owned by promoter group company, personal and corporate guarantees of certain promoter directors and entities.

4.2 Term Loans under Structured Mezzanine credit facility from Banks are secured by first ranking pari-passu charge on lands at "The Orchid" at Vile Parle (East) (owned by Plaza Hotels Private Limited) together with hotel buildings and all appurtenances thereon, Credit Card receivables personal and corporate guarantees of certain promoter directors and entities and certain other collateral securities.

4.3 Term loans from Financial Institution and Others are secured by first ranking pari-passu charge on lands at "The Orchid" at Vile Parle (East) (owned by Plaza Hotels Private Limited) together with hotel buildings and all appurtenances thereon, first ranking pari-passu mortgage on Company's immovable property being Hotel "VITS" at Andheri (East), hypothecation of all movable assets thereat, Credit Card receivables personal and corporate guarantees of certain promoter directors and entities and certain other collateral securities.

5.1 The Company has deferred its Sales tax liability in term of entitlement granted for availing sales tax incentives issued by the Sales Tax Department, Maharashtra. This liability will be due in installments from the year 2013 to 2022.

5.2 The Company has received Long term trade deposit of Rs. 700.00 Lakhs (Prev. Year Rs. 700.00 Lakhs) from Ilex Developers & Resorts Limited a jointly controlled entity, as a security for the hotel property given for development and expansion for a period of 20 years.

6.1 Working Capital loan from Banks are secured by hypothecation of stocks and book debts of the Company and first ranking pari-passu mortgage of immovable property being Hotel "VITS" at Andheri (East), hypothecation of all movable assets thereat, Credit Card receivables and personal and corporate guarantees of certain promoter directors and entities.

6.2 The Company has issued 5.50% Foreign Currency Convertible Bonds (FCCBs) during 2006-07 aggregating USD 18.00 million (Rs. 7,956 Lakhs), with an option to the investors to convert the FCCBs into the equity shares at any time from the Issue Date and ten business days prior to 14th March, 2012. The Bonds were listed on the Singapore Exchange Securities Trading Limited, Singapore. In terms of the supplemental Trust Deed on 13th August, 2010, the conversion price was reset at Rs.135/- per share for mandatory conversion of FCCBs within specified timeframe into equity shares. Accordingly 5,629 bonds (FCCB) were converted into 18,43,810 equity shares ofRs.10/- each at a premium of Rs.125/- per share in the previous year. The Balance 12,371 bonds have been converted into 40,52,189 equity shares of Rs.10/- each at a premium of Rs.125/- per share in the current year. All these shares have been listed on BSE and NSE.

7.1 There is no amount due and outstanding to be credited to Investors Education and Protection Fund as on 31st March 2012.

7.2 Includes employees dues, statutory dues, security deposits.

8.1 The Company has loyalty programmes, which enable its customers to accumulate points based on their spends at the Company's hotels. Such points can be encased at the Company's hotels or by purchase of merchandise. The above Rs. Nil (Previous Year Rs. 25.68 Lakhs) is the estimated liability against the loyalty schemes.

9.1 Out of 98,03,922 (Previous Year 93,13,726), 57,64,701 (Previous Year 57,64,701) shares have been pledged by the Company to lenders as security for loans taken by the Company (Refer Note 6.3)

9.2 Figures in brackets are in respect of previous year.

10.1 Include Rs. 0.07 Lakhs (Previous Year Rs. Nil) due from Fort Jadhavgadh Hotels Private Limited a subsidiary wherein some directors of the Company are directors.

10.2 Payment of taxes is net of provision for tax of Rs. 803.90 Lakhs (Prev. Year Rs. 807.70 Lakhs)

10.3 Include advances to suppliers and advances for expenses.

11.1 The Company's business, inter-alia, is to sell Time Share and provide holiday facilities to members for a specified period each year, over a number of years, for which membership fees is collected either in full upfront, or on a deferred payment basis. Out of the total membership fee, relevant portion reasonably attributable towards cost required to market Time Share, which is assessed and revised periodically, is recognized as Time Share income in the year in which the purchaser of Time Share becomes a member and the balance representing "Advance towards members" facilities is being recognized as Time Share income equally over a period for which holiday facilities are provided commencing from the year in which the member is entitled to benefits of membership under the scheme. Annual subscription fee dues from timeshare members is recognized as income.

12.1.1 Defined Benefit Plan:

The employees' gratuity fund scheme managed by Life Insurance Corporation of India is a defined benefit plan. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation. The obligations for leave encashment is recognized in the same manner as gratuity.

The estimates of rate of escalation in salary considered in actuarial valuation, take into account inflation, seniority, promotion and other relevant factors including supply and demand in the employment market. The above information is certified by the actuary.

The expected rate of return on plan asset is determined considering several applicable factors, mainly the composition of Plan assets held, assessed risk, historical results of return on plan assets and the Company's policy for plan assets management.

g) ( ) The figures of previous year shown above have been re-grouped / re-cast on the basis of revised valuation of gratuity liability issued by the Actuary.

Amount of Gratuity liability of Rs.80.52 Lakhs recognized in the Balance Sheet at 31st March, 2011 is adjusted in the current year by

(ii) Rs. 42.85 Lakhs for excess provision which has been written back in the current year and included in other income (Refer Note 25.1).

12.2 Payment of remuneration to Dr. Vithal V. Kamat, Executive Chairman and Managing Director, was approved by the shareholders of the Company in the Annual General Meeting held on 25th September, 2010. However, in view of inadequacy of the profits for the year ended 31st March, 2012, there is an excess remuneration of Rs. 43.13 Lakhs paid to Dr. Vithal V. Kamat Executive Chairman and Managing Director and in terms of the decision of the Remuneration Committee in its meeting held on 26th May, 2012, the company is proposing to make an application to the Central Government for waiver of recovery of above excess remuneration and the required particulars are being placed before the shareholders in the ensuing Annual General Meeting of the Company. Accordingly, the above remuneration is subject to these approvals.

13 Contingent Liabilities and Commitments:

Rs. In Lakhs

I Contingent liabilities: AS AT 31ST AS AT 31ST MARCH 2012 MARCH 2011

A Claims Against Company / Disputed liabilties not acknowledged as debts.

i) Disputed Income Tax Demand 737.50 731.29 The above includes a disputed demand of Rs. 728.40 Lakhs (Previous Year Rs. 728.40 Lakhs)

raised on completion of assessment for assessment year 2008-09 during earlier year, which has been disputed by the Company in appeal, which is pending. Pending disposal of this appeal, the appeals of erst while The Himco (India) Limited, which got merged with the Company in earlier years have been decided in favour of the Company entit ling it to the benefit of brought forward loss and unabsorbed depreciation, which is available for set off against the income assessed for the assessment year 2008-09. On giving ef fect to these appeals and setting off the losses, etc., the disputed demand will be substantially reduced to Rs. 198.26 Lakhs. The matter is being followed up by the Company.

ii) Open Import License 69.87 129.24

B Guarantees:

i) Corporate guarantee given to a bank given in respect of credit facilities availed by 16,434.00 16,434.00 Subsidiary Company.

ii) Counter Guarantees issued by the Company to secure Bank Guarantees. 173.71 104.62

C Other Money for Which the Company is contingently liable.

i) Obligation towards payments to project creditors of subsidiary company. 396.11 2,560.81

ii) Monetary value of unredeemed points in respect of Guest Loyalty program for Sales 26.70 102.73 Promotion.

II Commitments:

A Estimated amount of capital commitments to be executed on capital accounts and not 123.14 1,233.61

provided for (net of advances)

B Other Commitments:

i) Undertaking given by the Company in favor of a Financial Institution to repay the loan to 3,106.19 - the extent of 50% of sale proceeds of the Assets sold.

ii) Commitment to the V Privilege Scheme members for providing Hospitality services during 41.34 3.36 the year 2012-13 as per membership sale value

iii) The Company has put up an STP Unit on an adjacent immovable property owned by Kamats Amusements Private Limited in earlier years for its Orchid Hotel, Mumbai and continues to use the same. The Company is obliged to compensate appropriately to the owner for such use of property as explained in the Explanatory Statement under section 393 of the Companies Act ,1956 to the notice convening the meeting of the shareholders of the Company on 22nd October, 2005 pursuant to Bombay High Court Order dated 2nd September 2005 and as approved by the Board of Directors of the Company in the meeting held on 26th July 2008. The modalities are being worked out.

iv) Refer Note 38 for Company's Commitment to buy balance shares of its subsidiary Company referred to therein and other connected matters.

14 Exceptional Items:

i) Current Year : Loss of Rs.192.77 Lakhs (Previous Year Rs. Nil) due to write off of fixed assets on closure of certain unviable hotels during the year, Loss of Rs.17.66 Lakhs (Previous Year Rs. Nil) on compulsory acquisition of a portion of the Company's land at Nagpur by the Government and after adjusting profit ofRs. 83.99 Lakhs (Previous Year of Rs. Nil) on disposal of certain non productive land and buildings.

ii) Previous Year : Input Service Tax Credit of Rs. Nil (Previous Year Rs. 55.07 Lakhs) available to the Company in respect of cost of certain input services availed and charged to Statement of Profit and Loss in earlier years, which has been recognized based on an experts' advice.

15 Prior Periods Items:

i) Liabilities and Provisions of Rs. 249.19 Lakhs (Previous Year Rs. 50.85 Lakhs) under Other Income (Note 25) includes excess gratuity provisions of Rs. 51.71 Lakhs (Previous Year Rs. Nil) written back which was made in earlier years.

ii) Miscellaneous expenses of Rs.135.58 Lakhs (Previous Year Rs. 82.66 Lakhs) under Other Expenses (Note 28) includes expenses of Rs. 10.94 Lakhs (Previous Year Rs. 19.70 Lakhs) relating to earlier years.

16 Segment Reporting:

The Company's activities involve predominantly providing hospitality related services, which is considered to be a single business segment since these are subject to similar risks and returns. Further, services are not provided out of India and hence there are no reportable geographical segments. Accordingly, the financial statements are reflective of the information required by Accounting Standard 17 - Segment Reporting (AS-17) as notified by the Companies (Accounting Standards) Rules, 2006.

17 Related Party Disclosures:

Related Party where control exists:

(a) Subsidiary Companies:

Orchid Hotels Pune Private Limited (Formerly B W Highway Star Private Limited)- (w.e.f. 21st May, 2009)

Fort Jadhav Gadh Hotels Private Limited - (w.e.f. 15th March, 2012)

Fort Mahodadhi Palace Private Limited - (w.e.f. 30th April, 2011)

Kamats Restaurants (India) Private Limited - (w.e.f. 28th May, 2011)

(b) Jointly Controlled Entity:

Ilex Developers and Resorts Limited (Joint Venture) (w.e.f. 1st March, 2010)

(c) Companies in which some directors of the Company are directors/members:

Plaza Hotels Private Limited

Kamats Holiday Resorts (Silvassa) Limited

Vishal Amusements Limited

Kamats Restaurants Private Limited (merged with the Company w.e.f. 1st April, 2011) (Refer Note 5)

Kamat Holiday Resorts Private Limited (merged with the Company w.e.f. 1st April, 2011) (Refer Note 5)

Indira Investments Private Limited

Kamburger Foods Private Limited

Kamat Eateries Private Limited

Kamats Amusements Private Limited

Talent Hotels Private Limited

Karaoke Amusements Private Limited

Karwar Hotels Private Limited

Busybee Developers Private Limited

Grasshoppers Developers Private Limited

(d) Key Management Personnel :

Dr. Vithal V. Kamat -Executive Chairman & Managing Director

Mr. Ramesh N. Shanbhag -Whole Time Director

Mr. Vikram V. Kamat -Executive Director

(e) Other Related parties with whom transactions have taken place during the year :

V. V. Kamat HUF

(f) Summary of transactions during the year with Related Parties entered into on commercial basis in the interest of the Company and approved by the Board and status of outstanding balances as on 31st March, 2012:

18 Leases:

The Company's significant leasing arrangements are in respect of operating leases for premises. These leasing arrangements, which are not non-cancelable, range between eleven months and Nine years generally or longer and are usually renewable by mutual consent on mutually agreeable terms.

The aggregate lease rentals payable are charged as rent and aggregate licence fees income from shops and other spaces on leave and licence basis are shown as Licence Fees.

19 Income Tax

Provision for tax for the year has been made at Rs. 14.00 Lakhs (Previous Year Rs. 182.00 Lakhs) under section 115JB of the Act.

In accordance with Guidance Note issued by The Institute of Chartered Accountants of India, the Company has accounted for MAT Credit Entitlement of Rs. 14.00 Lakhs (Previous Year Rs. 182.00 Lakhs) for the year ended 31st March, 2012.

20 Subsidiary Company

In terms of the Minutes of the Order by consent dated 10th February, 2010 of the High Court of Bombay, the Company agreed to buy the remaining 25% being 29,41,176 shares of Orchid Hotels Pune Private Limited (OHPPL) (formerly B W Highway Star Private Limited) held by minority shareholders for a consideration of Rs. 2,400.00 Lakhs, which was agreed to be paid over a period of three years against which the Company paid Rs. 300.00 Lakhs in earlier years.

During the year under reference, the Company by paying Rs. 400.00 lakhs purchased 4,90,196 equity shares of Rs. 10/- each, fully paid being 4.16% of the equity share capital of OHPPL from an existing shareholder of that Company making its aggregate holding to 83.33%.

The Company has also issued a Corporate Guarantee to guarantee the due performance / obligations of OHPPL for repayment of Loan of Rs. 2,200.00 Lakhs to the lender and payment of creditors' dues of Rs. 864.19 Lakhs. During the year, the subsidiary has repaid loan of Rs. 800.00 lakhs (Previous Year Rs. 800.00 Lakhs) to the lender and paid to creditors Rs. 864.19 Lakhs. Dr. Vithal V. Kamat as Executive Chairman and Managing Director and Mr. Vikram V. Kamat as Executive Director of the Company have also issued personal guarantees to guarantee the due performance / obligations of the Company and OHPPL for purchase of shares and due payment of amounts due. OHPPL has also agreed to take over the liability and claims of certain creditors aggregating to Rs. 1,928.42 Lakhs and the Company has agreed to indemnify the minority shareholder and others against any claim or loss made by these creditors in respect of hotel projects of OHPPL. During the year, the subsidiary has paid to certain creditors Rs. 1,532.31 Lakhs.

21.1 Figures in the bracket are for previous year.

21.2 The Company has received Long Term trade Deposit of Rs. 700.00 Lakhs (Previous Year Rs. 700.00 Lakhs) from the above Company as a security for the hotel property given for development and expansion for a period of Twenty Five years.

 
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