Home  »  Company  »  Kamat Hotels (In  »  Quotes  »  Notes to Account
Enter the first few characters of Company and click 'Go'

Notes to Accounts of Kamat Hotels (India) Ltd.

Mar 31, 2023

1. The Company had made a strategic and long term investment of Rs. 9,327.75 lakhs in the shares of OHPPL in earlier years. Considering the adverse financial position of OHPPL and arrangement with lenders of OHPPL, in the earlier years, the Company had made full provision for diminution of investment. Since, the financial performance of the hotel business of OHPPL has improved and also during the year ended 31st March, 2023, the secured loan of lender has been settled, reversal of impairment on Property, plant and equipment, the Company has partially reversed the provision for diminution upto Rs. 5,000.00 lakhs and is shown as exceptional income. Provision for diminution of investment remaining as on 31st March, 2023 amounts to Rs. 4,327.75 lakhs.

2. The Company has made a strategic and long term investment of Rs. 533.00 lakhs (Previous year: Rs.533.00 lakhs) in earlier years in the equity shares of Ilex Developers & Resorts Limited (Ilex), a 32.92% joint venture of the Company. In the earlier years, the Company had made full provision for impairment of investment based on assessment carried out by the management.

3. Company''s investment in equity shares of wholly owned subsidiaries [Kamats Restaurants (India) Private Limited, Fort Jadhavgadh Hotels Private Limited, Mahodadhi Palace Private Limited, Orchid Hotels Eastern (India) Private Limited and Orchid Hotels Pune Private Limited] and equity shares held in joint venture entity [ILEX Developers and Resorts Limited] is given as security against issue of 14% Rated Listed Secured Redeemable Non-Convertible Debentures by the Company [Also refer note 26.1].

12.2 Loan to subsidiaries include outstanding loan of Rs. 418.74 lakhs as at 31st March 2023 (Previous year: Rs. 418.74 lakhs) given to Mahodadhi Palace Private Limited (MPPL) (wholly owned subsidiary), whose financial position have been affected due to adverse factor. Considering these adverse factors, in the earlier years the Company had made a provision of Rs. 418.74 lakhs for doubtful of recovery from this subsidiary. Further, in view of various adverse factors and request made to holding company by MPPL for waiver of interest, the Company has waived off interest on this unsecured loan granted until there is improvement in the financial position of this entity. Considering there is no improvement in current year also, interest is continued to be waived off. This waiver is effective since 28th February 2017.

12.3 In the earlier years, considering the adverse financial position of Orchid Hotels Pune Private Limited (OHPPL) (wholly owned subsidiary) and arrangement with lenders of OHPPL, the Company had treated the unsecured loan to OHPPL as doubtful, made full provision in the books and also discontinued accruing interest income thereon. During the year, the Company has considered request from OHPPL for substantial waiver of old loan of Rs. 19,646.40 lakhs and agreed at settlement value of Rs. 6,000.00 lakhs, without further interest till

15.1 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 fulfil his obligation to complete the infrastructure for the aforesaid project despite follow up by the Company. In view of inordinate delay in the projects, the expenditure incurred on the said incomplete project had been written off in earlier years and a provision had been made in the earlier years for the deposit paid to the said party. Company has initiated legal proceedings against the party and other party has also made counter claim for compensation and interest thereon. The matter is pending to be resolved. Adjustments, if any, to the expenditure written off and provision made as above, will be made on disposal / conclusion of the above matter in the year in which matter will be settled.

20.1 Fixed deposit as margin money with bank include minimum amount need to maintain in Debt Service Reserve Account as per the terms of Debenture Trust Deed and for guarantee given by bank to Government & other authorities on behalf of the Company.

24.1 Terms/ rights attached to equity shares :

The Company has only one class of shares referred to as equity shares having a par value of Rs. 10. Each holder of equity shares is entitled to one vote per share. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the remaining assets of the Company, after distribution of all preferential amounts. However, there are no preferential amounts inter se equity shareholders. The distribution will be in proportion to the number of equity shares held by the shareholders (after due adjustment in case shares are not fully paid up).

24.2 Issued, subscribed and paid-up capital include 8,62,500 forfeiture share, which are partly paid up (at the rate of Rs. 6.82 per share), amounts originally paid up is Rs. 58.85 lakhs.

24.3 During the year the Company has issued 10,68,805 equity share to promoters having face value of Rs. 10 at Rs. 97 per share, against conversion of share warrants and accordingly premium of Rs.87 per share have been accounted in other equity as security premium.

25.1 Capital reserve represent profit on sale of fixed asset related to an entity amalgamated with the Company in the earlier years.

25.2 Capital redemption reserve is credited by amount set aside for redemption of preference shares issued in earlier years.

25.3 Securities premium account is used to record the premium on issue of equity shares. The same will be utilised in accordance with the provisions of the Companies Act, 2013.

25.4 In terms of the Bombay High Court Order dated 13th January, 2012, the amalgamation reserve is not available for distribution as dividend by the Company.

25.5 Money received against share warrants consist of 25% upfront money received against issue of 48,27,209 preferential convertible warrants which are pending for conversion into equity share.

The Company will utilize the proceeds from the preferential issue of Warrants for the purpose of capital expenditures, repayment of debts, working capital requirements and for general corporate purposes..

26.1 During the year ended 31st March, 2023, the Company has allotted 29,750 "14% Rated Listed Secured Redeemable Non-Convertible Debentures" (NCDs) having face value of Rs. 1 lakh each amounting to Rs. 29,750.00 lakhs through private placement. The Company has utilized the issue proceeds towards settlement of secured debts of the Company, a subsidiary company, joint venture company and loan to a company belonging to the promoter.The redemption of NCDs shall be as per repayment schedule of Debenture Trust Deeds.

Non-convertible debenture aggregating to Rs. 29,420 lakhs are secured by (i) First ranking exclusive charge on lands at “The Orchid” at Vile Parle (East) (owned by Plaza Hotels Private Limited) together with hotel buildings and all appurtenances thereon; Hotel “VITS” at Andheri (East); hotel property at Lotus Goa, land & building belonging to promoter''s company at Nagpur, hypothecation of all receivable and current assets of the Company, Orchid Hotels Pune Private Limited (OHPPL), Mahodadhi Palace Private Limited (MPPL), Ilex Developers and Resorts Limited (IDRL), Plaza Hotels Private Limited (PHPL) & Savarwadi Rubber Agro Private Limited (SRPL); Pledge of equity shares of the Company held by promoters and promoter companies, pledge of equity shares held by the Company in subsidiaries & joint venture and Pledge of security held by promoter, promoter company and and other group company in Plaza Hotels Private Limited & IDRL.

Above NCDs are secured by corporate guarantee of subsidiaries, joint venture, PHPL, SRPL, Greenboom Developers & Resorts Limited, Vishal Amusements Limited & Kamat Development Private Limited and personal guarantee of Dr. Vithal V. Kamat and Mr. Vishal V. Kamat.

26.2 Details of security provided and terms of repayment

(a) Term loan from banks and others [loans assigned by banks to ARC''s on settlement] aggregating to Rs. Nil (previous year: Rs. 28,646.95 lakhs) was secured by (i) 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; (ii) First / second ranking pari-passu mortgage on Company''s immovable property being Hotel “VITS” at Andheri (East); (iii) First/ second charge by way of hypothecation of movable fixed assets and current assets of the Company; (iv) Credit card receivables on pari-passu basis; (v) Equitable mortgage of hotel property at Lotus Goa [exclusive to one lender]; (vi) Pledge of equity shares of the Company held by promoters and promoter companies, pledge of certain equity shares of Orchid Hotels Pune Private Limited (subsidiary) and Plaza Hotels Private Limited (promoter company) and entire equity shares of Kamats Restaurants (India) Private Limited, Fort Jadhavgadh Hotels Private Limited, Mahodadhi Palace Private Limited and Ilex Developers and Resorts Limited, Kamat Holiday Resorts (Silvassa) Limited; and (vii) Corporate guarantee of subsidiaries, joint venture entity and Plaza Hotels Private Limited and personal guarantee of Dr. Vithal V. Kamat and Mr. Vikram V. Kamat.

(b) Term loans from others [loans assigned by Bank to ARC''s and NBFC on settlement] aggregating to Rs. Nil (previous year: Rs. 1,400.71 lakhs) was secured by (i) First ranking pari-passu charge on lands at “The Orchid” at Vile Parle (East) (owned by Plaza Hotels Private Limited) together with hotel buildings (245 rooms) and all appurtenances thereon; (ii) Credit card receivables of Orchid (245 rooms) and VITS, Mumbai; (iii) Personal guarantees of Dr. Vithal V. Kamat and Mr. Vikram V. Kamat; and (iv) Post dates cheques and undertaking to pay 50% of sale proceeds of certain assets in case of sale of those assets.

(c) Term loans from bank having carrying value of Rs. Nil (previous year: Rs. 2,135.56 lakhs) was secured by way of (i) Exclusive charge on all present and future current assests including receivables of four hotel properties and subservient charge on all property, plant and equipments of the Company; (ii) Equitable mortgage over the land situated at Nagpur, owned by the Company and directors/ relative of directors; (iii) Pledge of 34 lakh shares held by Vishal Amusement Limited and Dr. Vithal V. Kamat; (iv) Personal guarantees of Dr. Vithal V. Kamat, and Mr. Vishal V. Kamat (v) Post dates cheques; and (vi) Corporate guarantees of Plaza Hotels Private Limited and Vishal Amusement Limited.The sanctioned terms and the loan agreements do no mandate submission of periodic statement of current assets, hence the disclosure about the same is not applicable.

26.3 Intercorporate loan amounting to Rs. 549.69 lakhs (Previous year: Rs. 211.09 lakhs), carrying interest rate of 11% p.a is repayable after 1 year from the end of current year.

26.4 Intercorporate loan amounting to Rs. 760.73 (Previous year: Rs. Nil lakhs) is repayable not later than 10 years from the date of disbursement of loan or earlier on availability of funds with the Company.

26.6 One time settlement of outstanding loan with ARC''s and with banks

During the previous year, the Company had proposed for settlement of outstanding loan and interest due to Asset Reconstruction Companies (ARCs), which was in-principle approved by the respective lenders. Further developments in this respect are as below:

During the year ended 31st March, 2023, the Company had settled and paid the dues of ARCs and obtained No Dues Certificates (NDC). The Company had accounted for settlement and derecognized the loan liability (principal and interest), the difference between liability as per books and the settlement amount is accounted as under :

• Rs. 7,773.47 lakhs is disclosed as "Exceptional Income (net of expenses)" and

• Rs. 2,451.51 lakhs is reversed from the finance cost for the year, the same pertains to finance cost accounted during current financial year 2022-23 (i.e. prior to the settlement).

In the opinion of the management, and in continuation of the view taken earlier, reporting for the event of default is not warranted and hence no intimation is required to be given to the stock exchange for unpaid loan instalments / settlement amounts till the date of settlements as required by SEBI circular dated 21st November, 2019. The statutory auditors have drawn attention on the said matter in their independent auditor''s reports of earlier year.

28.1 Security deposit received having carrying value of Rs. 80.00 lakhs as at 31st March 2023 (Previous year: Rs. 80.00 lakhs) is interest free and is received against hotel property given by the Company under operation and management agreement. This deposit is fair valued in accordance with Ind AS 109 - Financial Instrument. Unwinding of deferred lease liability arising out of the said fair valuation is being recognised on straight line basis. (Refer Note 37)

45 Capital commitments, other commitments, contingent liabilities and contingent assets45.1 Capital Commitments.

(a) Estimated amount of capital commitments to be executed on capital accounts and not provided for Rs. 48.42 lakhs as at 31st March

2023 (Previous year: Rs. 1.64 lakhs) (Net of advances).

45.2 Other significant commitments.

(a) The Company had put up Sewage Treatment Plant ("STP") on an adjacent immovable property owned by Savarwadi Rubber Agro Private Limited (previously known as 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 the property. The modalities of the same being worked out.

(b) Undertaking given by the Company in favour of debenture holders for mandatory redemption to the extent of 100% of sale proceeds or Rs. 12,500 lakhs (whichever is lower) out of the proceeds from sale of certain specified assets (if sold).

45.3

Contingent liability (to the extent not provided for)

Particulars

As at

As at

31st March 2023

31st March 2022

(i) Claims against the Company/ disputed liabilities not acknowledged as debts

Disputed indirect tax demands (Including amount paid under protest of Rs. 22.22 lakhs) (Previous year: Rs. 22.22 lakhs)

494.37

539.66

Disputed direct tax demand

4,987.28

4,830.78

Claims against the Company not acknowledged as debts (including employee claims) (ii) Other money for which the Company is contingently liable

629.01

627.83

Contingencies in respect of assigned loan (Also refer note 47.3)

-

35,243.55

Open import license

55.70

53.68

In respect of (i) above, future cash outflows (including interest/ penalty, if any) are determinable on receipt of judgement from tax authorities / labour court/ settlement of claims or non-fulfilment of contractual obligations. Further, the Company does not expect any reimbursement in respect of above.

45.4 Other litigations

Refer note 15.1 in respect of dispute regarding Bandra Kurla Project.

Transactions with related parties and outstanding balances at the year end are disclosed at transaction value/ carrying value. In addition to above transactions,

(i) Mahodadhi Palace Private Limited, Kamats Restaurant (India) Private Limited, Fort Jadhav Gadh Hotels Private Limited, Ilex Developers & Resorts Limited, Plaza Hotels Private Limited, Kamat Holiday Resorts (Silvassa) Limited, Dr. Vithal V. Kamat, Mr. Vikram V. Kamat have given joint corporate/personal guarantee amounting to Rs. 38,583.00 lakhs to banks/ others for credit facilities availed by the Company [Share of respective entities/ persons is not quantifiable], which is released during the year ended 31st March, 2023.

(ii) Mahodadhi Palace Private Limited, Kamats Restaurant (India) Private Limited, Fort Jadhav Gadh Hotels Private Limited, Ilex Developers & Resorts Limited, Plaza Hotels Private Limited, Kamat Development Private Limited, Orchid Hotels Pune Private Limited, Orchid Hotels Eastern (India) Private Limited, Savarwadi Rubber Agro Private Limited, Greenboom Developers & Resorts Limited, Vishal Amusements Limited, Dr. Vithal V. Kamat, Mr. Vishal V. Kamat have given joint corporate/personal guarantee amounting to Rs. 29,750.00 lakhs against issue of Secure 14% Rated Listed Redeemable Non Convertible Debentures face value of Rs. 1 lakhs each .[Share of respective entities/ persons is not quantifiable].

(iii) Securities held by promoter, promoter company and others in Mahodadhi Palace Private Limited, Kamats Restaurant (India) Private Limited, Fort Jadhav Gadh Hotels Private Limited, Ilex Developers & Resorts Limited, Plaza Hotels Private Limited, Orchid Hotels Pune Private Limited, Orchid Hotels Eastern (India) Private Limited, pledge with debenture trustee to secure 29,750 14% Secured Rated Listed Redeemable Non Convertible Debentures face value of Rs. 1 lakhs each.

(iv) Plaza Hotels Private Limited has mortgaged its property situated at Vile Parle East Mumbai as security in favour of debenture trustee to secure 29,750 14% Secured Rated Listed Redeemable Non Convertible Debentures face value of Rs. 1 lakhs each.

(v) Mahodadhi Palace Private Limited, Ilex Developers & Resorts Limited, Plaza Hotels Private Limited, Savarwadi Rubber Agro Private Limited & Orchid Hotels Pune Private Limited, have hypothecated its current asset and all receivable with debenture trustee to secure 29,750 14% Secured Rated Listed Redeemable Non Convertible Debentures face value of Rs. 1 lakhs each.

(vi) Plaza Hotels Private Limited, Vishal Amusements Limited, Dr Vithal V. Kamat, Mr Vishal V. Kamat had given joint corporate/personal guarantee amounting to Rs. 2,135.56 lakhs to bank for credit facilities availed by the Company [Share of respective entities/ persons is not quantifiable], which is released during the year ended 31st March, 2023.

(vii) KMP, relatives of KMP and entities in which KMP has significant influence have pledged equity shares held by them in the Company and other specified investments to the trustee against issue of Secure 14% Rated Listed Redeemable Non Convertible Debentures by Company. (Refer note 26)

47.4 Terms and conditions of transactions with related parties

The transactions with related parties are made on terms equivalent to those that prevail in arm''s length transactions. Outstanding balances at the year-end are unsecured and settlement occurs in cash. In case of advances given to wholly owned subsidiary MPPL, Company has waived interest. For the year ended 31st March 2023, the Company has not recorded any impairment of receivables relating to amounts owed by related parties. Company has recorded impairment of receivable and investment in MPPL in earlier years. This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates.

48 Breakup of compensation to key managerial personnel

Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the entity, directly or indirectly, including any director (whether executive or otherwise) of that entity.

(ii) Disclosures for defined benefit plans and other long term benefits

(a) Defined benefit obligations - Gratuity (funded)

The Company has a defined benefit gratuity plan for its employees. The gratuity plan is governed by the Payment of Gratuity Act, 1972. Under the Act, every employee who has completed five years of service is entitled to specific benefit. The level of benefits provided depends on the employee''s length of service and salary at retirement age. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn) for each completed year of service as per the provisions of the Payment of Gratuity Act, 1972. The scheme is funded with insurance companies in the form of a qualifying insurance policy. Risks associated with plan provisions

Valuations are based on certain assumptions, which are dynamic in nature and vary over time. As such Company is exposed to various risks as follows:

52 LeasesI) Company as lessee:

The Company has taken hotel property under cancellable leases. The Company has recognised management fees/ rent expenses of Rs. 579.44 lakhs during the year (Previous Year Rs. 236.95 lakhs) which is contingent in nature.

Note:

a) With respect to hotel properties/ land taken under lease/ operation and management arrangement, Company is liable to pay management fees/ rent based on gross operating profits, revenue etc. Since future revenue is contingent in nature, other disclosures as required under Ind AS 116 - ''Leases'' are not quantifiable with respect to such arrangements as at 31st March 2023.

54.1 During the year ended 31st March, 2023, the Company has entered into a binding term sheet with a buyer agreeing to transfer one of the hotel properties at an agreed value of Rs. 12,500.00 lakhs on or before 12 months from the date of term sheet (i.e. 18th January, 2023). The Company has received Rs. 100.00 lakhs as advance as agreed in the said term sheet. The resultant gain on the said transaction will be accounted in the period / year in which final agreement is executed.

55 Note on statement of cash flows

i) The aggregate amount of outflow on account of direct taxes paid is Rs.354.18 lakhs (previous year inflow of Rs. 108.73 lakhs, net of paid) net of refund.

58 Going concern assumption

As per the standalone financial statement, current liabilities are significantly greater than the current assets as on 31st March, 2023 and 31st March, 2022. In the opinion of the management, considering the revival of hospitality business, positive networth as on 31st March, 2023, positive earnings before interest, taxes and depreciation (EBITDA) for the year ended 31st March, 2023 and year ended 31st March, 2022, increase in operations and profit during the current year, settlement of secured debts due to ARCs, settlement of loan given to subsidiary company which was fully provided in earlier year, reversal of provision for diminution in value of investment in subsidiary company (OHPPL), signing of term sheet for proposed sale of one of the hotel properties, issue of NCDs, considering the future business prospects and the fair value of the assets of the Company being significantly higher than the borrowings / debts, these standalone financial statement have been prepared on a going concern basis which contemplates realisation of assets and settlement of liabilities in the normal course of the Company''s business.

59 COVID-19 impact

The Company''s business during the previous year ended 31st March, 2022 was affected on account of third wave of COVID-19. During the current year, there was strong recovery in the hospitality business on account of pick up in leisure and business travel. The Company will continue to closely monitor the future economic conditions and assess its impact on financial performance. Therefore, results (before exceptional item) for the year ended 31st March, 2023 are not comparable with the financial statement for the corresponding period of the previous year.

60 Other Statutory Information

(i) The Company does not have any Benami property. No proceeding has been initiated or pending against the Company for holding any Benami property.

(ii) The Company has not advanced to or loaned to or invested funds in any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that such Intermediary shall: (a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (Ultimate Beneficiaries) or (b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries

(iii) The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall: (a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or (b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries

(iv) The Company does not have any transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as search or survey or any other relevant provisions of the Income Tax Act, 1961)(v) The Company has not been declared as a wilful defaulter as prescribed by Reserve Bank of India.

(vi) During the year, the Company did not have transactions with any company which was struck off under Section 248 of the Companies Act, 2013 or Section 560 of Companies Act, 1956.

(b) Fair valuation techniques

The Company maintains policies and procedures to value financial assets or financial liabilities using the best and most relevant data available. The fair values of the financial assets and liabilities are included at the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

The management assessed that fair value of Trade receivables (net), Cash and cash equivalents, Other current financial assets, Borrowings, Financial liabilities, Trade payables, Current lease liabilities, Other current financial liabilities etc., approximate their carrying amounts largely due to the short-term maturities of these instruments. Further, the management has assessed that fair value of other financial asset and liabilities will be approximate to their carrying amounts as they are priced to market interest rates on or near the end of reporting period.

(c) Fair value hierarchy

Financial assets and financial liabilities are measured at fair value in the financial statement and are grouped into three levels of a fair value hierarchy. The three Levels are defined based on the observability of significant inputs to the measurement, as follows:

Level 1 : Quoted (unadjusted) prices in active markets for identical assets or liabilities.

Level 2 : Other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or indirectly.

Level 3 : Techniques which use inputs that have a significant effect on the recorded fair value that are not based on observable market data.

(i) The Company has not disclosed the fair value of financial instruments such as trade receivables, trade payables, short term loans, deposits, borrowings etc, because their carrying amounts are reasonable approximation of fair value.

(ii) Management uses its best judgement in estimating the fair value of its financial instruments. However, there are inherent limitations in any estimation technique. Therefore, for substantially all financial instruments, the fair value estimates presented above are not necessarily indicative of the amounts that the Company could have realised or paid in sale transactions as of respective dates. As such, fair value of financial instruments subsequent to the reporting dates may be different from the amounts reported at each reporting date.

(iii) There have been no transfers between Level 1 and Level 2 for the years ended March 31,2023 and March 31,2022.

63 Risk management framework

The Company''s Board of Directors has overall responsibility for the establishment and oversight of the Company''s risk management framework. The board of directors has established the Risk Management Committee, which is responsible for developing and monitoring the Company''s risk management policies. The Committee reports regularly to the Board of Directors on its activities. The Company''s risk management policies are established to identify and analyse the risk faced by the Company, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Company''s activities. The Company''s Audit Committee oversees how management monitors compliance with the Company''s risk management policies and procedures, and reviews the adequacy of the risk management framework in relation to the risks faced by the Company. The Audit Committee is assisted in its oversight role by internal audit team. Internal audit team undertakes both regular and ad hoc reviews of risk management controls and procedures, the results of which are reported to the audit committee.

The Company has exposure to the following risks arising from financial instruments:

(a) Credit risk;

(b) Liquidity risk;

(c) Market risk

Credit risk is the risk of financial loss to the Company if a counterparty to a financial instruments fail to meet its contractual obligations. The Company is exposed mainly to credit risk which arises from cash and cash equivalents and deposit with banks.

(i) Cash and cash equivalent

The Company considers factors such as track record, size of institution, market reputation and service standards to select the banks with which balances and deposits are maintained. The bank balance and fixed deposits are generally maintained with the banks with whom the Company has regular transactions. Further, the Company does not maintain significant cash in hand other than those required for its day to day operations. Considering the same, the Company is not exposed to expected credit loss of cash and cash equivalent and bank deposits.

(ii) Trade receivables

The major exposure to the credit risk at the reporting date is primarily from receivable comprising of trade receivables. Credit risk on receivable is limited due to the Company''s diverse customer base. The effective monitoring and controlling of credit risk through credit evaluations is a core competency of the Company''s risk management system.

For expected credit loss of trade receivable, Company follows simplified approach as per which provision is made for receivable exceeding six months/ one year based on category of receivable. This is based on historically observed default rates over the expected life of trade receivables. The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets.

(b) Liquidity risk :

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company''s approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to Company''s reputation.

Management monitors rolling forecasts of the Company''s liquidity position and cash and cash equivalents on the basis of expected cash flows to ensure it has sufficient cash to meet operational needs. Such forecasting takes into consideration the Company''s debt financing plans, covenant compliance and compliance with internal statement of financial position ratio targets. The Company is also taking the various measures to overcome the challenges posed by the COVID-19 pandemic as explained in note 58 and 59.

Market risk is the risk that the changes in market prices such as foreign exchange rates, interest rates and equity prices will affect the Company''s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return. The pre dominant currency of the Company''s revenue and operating cash flows is Indian Rupees (INR). Company has earnings in foreign currency. There is no foreign currency risk as there is no outstanding foreign currency exposure at the year end.

(i) Interest Rate Risk

The term loans taken by the Company in earlier years from bank and others (including loan assigned by banks on one time settlement) have been repaid during the year under settlement. With respect to secured loan taken from Non Convertible Debenture Holders during the year, interest rate is fixed and other borrowings attracts fixed rate of interest. Therefore, there are no interest rate risks, since neither the carrying amount nor the future cash flows will fluctuate because of change in market interest rates.

64 Capital risk management

The Company manages its capital to ensure that it will be able to continue as a going concern so, that they can continue to provide returns for shareholders and benefits for other stakeholders and maintain an optimal capital structure to reduce cost of capital. The Company manages its capital structure and make adjustments to, in light of changes in economic conditions, and the risk characteristics of underlying assets. In order to achieve this overall objective, the Company''s capital management, amongst other things, aims to ensure that it meets financial covenants attached to the borrowings that define the capital structure requirements.

Consistent with others in the industry, the Company monitors capital on the basis of the gearing ratio. The ratio is calculated as net debt divided by equity. Net debt is calculated as total borrowing (including current and non-current terms loans as shown in the balance sheet).


Mar 31, 2018

1. Background

The Company was incorporated on 21st March 1986 under Companies Act, 1956 and is domiciled in India. The registered office of the Company is located at 70 - C, Nehru Road, Near Santacruz Airport, Vile Parle (E), Mumbai - 400 099, India. The Company''s shares are listed on two stock exchanges in India. The Company is in the hospitality business. Currently, it has hotels in the states of Maharashtra (Mumbai, Pune, Nashik, Murud), Goa (Benaulim) and Orissa (Puri, Konark).

The financial statements of the Company for the year ended 31st March 2018 were approved and adopted by board of directors of the Company in their meeting held on 28th May 2018.

2. Basis of preparation

2.1. Statement of compliance with Ind AS

The financial statements (on standalone basis) of the Company have been prepared in accordance with Indian Accounting Standards (Ind AS) notified under Companies (Indian Accounting Standards) Rules, 2015 as amended from time to time.

For all periods up to and including the year ended 31st March 2017, the Company had prepared its standalone financial statements in accordance with the Accounting Standards notified under Section 133 of the Companies Act, 2013 read together with the Companies (Accounts) Rules 2014 (referred as “Indian GAAP”). These are the Company''s first annual financial statements prepared complying in all material respects with the Ind AS notified under Section 133 of the Companies Act, 2013.

The standalone financial statements comply with Ind AS notified by the Ministry of Corporate Affairs (‘MCA''). The Company has consistently applied the accounting policies used in the preparation of its opening Ind AS Balance Sheet at 1st April 2016 throughout all periods presented, as if these policies had always been in effect and are covered by Ind AS 101 “First-time adoption of Indian Accounting Standards''''. The transition was carried out from Indian GAAP which is considered as the previous GAAP, as defined in Ind AS 101. The reconciliation of effects of the transition from Indian GAAP on the equity as at 1st April 2016 and 31st March 2017 and on the net profit and cash flows for the year ended 31st March 2017 is disclosed in note 55 to these standalone financial statements.

2.2. Functional and presentation of currency

The financial statements are prepared in Indian Rupees which is also the Company''s functional currency. All amounts are rounded to the nearest rupees in lakhs.

2.3. Fair value measurement

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A fair value measurement assumes that the transaction to sell the asset or transfer the liability takes place either in the principal market for the asset or liability or in the absence of a principal market, in the most advantageous market for the asset or liability. The principal market or the most advantageous market must be accessible to the Company.

The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.

A fair value measurement of a non-financial asset takes into account a market participant''s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.

The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs

All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized within the fair value hierarchy based on the lowest level input that is significant to the fair value measurement as a whole. The fair value hierarchy is described as below:

Level 1 - Unadjusted quoted price in active markets for identical assets and liabilities.

Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly Level 3 - unobservable inputs for the asset or liability

For assets and liabilities that are recognised in the financial statements at fair value on a recurring basis, the Company determines whether transfers have occurred between levels in the hierarchy by re-assessing categorization at the end of each reporting period.

For the purpose of fair value disclosures, the Company has determined classes of assets and liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level of fair value hierarchy.

Fair values have been determined for measurement and / or disclosure purpose using methods as prescribed in “Ind AS 113 Fair Value Measurement”.

2.4. Use of significant accounting estimates, judgements and assumptions

The preparation of these financial statements in conformity with the recognition and measurement principles of Ind AS requires management to make estimates and assumptions that affect the reported balances of assets and liabilities, disclosure of contingent liabilities as on the date of financial statements and reported amounts of income and expenses for the periods presented. The Company based its assumptions and estimates on parameters available when the financial statements were prepared. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and future periods are affected.

Key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year. Significant estimates and critical judgement in applying these accounting policies are described below:

i) Property, plant & equipment, investment property and Intangible assets

The Company has estimated the useful life, residual value and method of depreciation / amortisation of property, plant & equipment, investment property and intangible assets based on its internal technical assessment. Property, plant & equipment, investment property and intangible assets represent a significant proportion of the asset base of the Company. Further, the Company has estimated that scrap value of property, plant & equipment and investment property would be able to cover the residual value & decommissioning costs of property, plant & equipment and investment property.

Therefore, the estimates and assumptions made to determine useful life, residual value, method of depreciation / amortisation and decommissioning costs are critical to the Company''s financial position and performance.

ii) Impairment of financial assets

The impairment provisions for financial assets are based on assumptions about risk of default and expected loss rates. The Company uses judgement in making these assumptions and selecting the inputs to the impairment calculation based on industry practice, Company''s past history and existing market conditions as well as forward looking estimates at the end of each reporting period.

iii) Contingencies

Management judgement is required for estimating the possible outflow of resources, if any, in respect of contingencies / claim / litigations against the Company as it is not possible to predict the outcome of pending matters with accuracy.

iv) Income taxes

Provision for tax liabilities require judgements on the interpretation of tax legislation, developments in case law and the potential outcomes of tax audits and appeals which may be subject to significant uncertainty. Therefore, the actual results may vary from expectations resulting in adjustments to provisions, the valuation of deferred tax assets, cash tax settlements and therefore the tax charge in the statement of profit and loss.

v) Measurement of defined benefit plan & other long term benefits

The cost of the defined benefit gratuity plan / other long term benefits and the present value of the gratuity obligation / other long term benefits are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation / other long term benefits is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.

vi) Loyalty program

The Company estimates the fair value of points awarded under the Loyalty Programme based on past experience of use of points by customers and expected usage in future.

vii) Impairment of investment in subsidiaries and joint venture entity

In the opinion of the management, investments/ advances in subsidiaries are considered long term and strategic in nature and in view of future business growth / asset base, the value of long term investments and loan & advances given are considered good except in case of a subsidiary and joint venture, considering adverse factors which have severely affected its financial position and expansion plans, on a consideration of prudence, provision has been made for impairment of investment/ advances.

viii) Going concern

Company''s accumulated losses are in excess of its paid up capital and other equity and its current liabilities exceeds its current assets as on 31st March 2018. Company''s management is taking appropriate steps to mitigate the impact of accumulated losses and improve cash flows and in the opinion of management, the fair values of the assets of the Company are significantly higher than the debts. In view of the above and considering management''s opinion, the standalone Ind AS financial statements have been prepared on a going concern basis for the reasons stated in note 51.

ix) Impairment of non-financial assets

The carrying amounts of assets are reviewed at each balance sheet date for any indication of impairment based on internal / external factors. An impairment loss is recognised wherever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the higher of a) fair value of assets less cost of disposal and b) its value in use. Value in use is the present value of future cash flows expected to derive from an assets or Cash-Generating Unit (CGU).

Based on the assessment done at each balance sheet date, recognised impairment loss is further provided or reversed depending on changes in circumstances. After recognition of impairment loss or reversal of impairment loss as applicable, the depreciation charge for the asset is adjusted in future periods to allocate the asset''s revised carrying amount, less its residual value (if any), on a systematic basis over its remaining useful life. If the conditions leading to recognition of impairment losses no longer exist or have decreased, impairment losses recognised are reversed to the extent it does not exceed the carrying amount that would have been determined after considering depreciation / amortisation had no impairment loss been recognised in earlier years.

x) Corporate guarantee:

The Company has given corporate guarantee on behalf of subsidiary and joint venture entity towards loan facilities from banks. This subsidiary and joint venture entity has also given corporate guarantee on behalf of the Company for loan facilities taken by the Company. With respect to subsidiary company, in view of the financial condition of the Company and ongoing discussion with the lenders of the subsidiary, in view of the management estimate, no liability would arise on the Company on account of this guarantee. With respect to the joint venture entity (JV), considering settlement of loan of the lender and expected improvement in financial position of the JV, it would be able to refinance the outstanding debt and meet the debt obligations as and when they fall due.

Hence the financial guarantee obligation is not required to be recognised in financial statements and it has been disclosed as contingent liability.

3. New standard issued but not effective and hence not adopted

The Company is assessing the potential impact of above amendments on the financial statements. Management presently is of the view that it would not have a material impact on the financial statements.

Notes:

3.1 On transition to Ind AS, the carrying values of all the property, plant and equipment under the previous GAAP have been considered to be the deemed cost under Ind AS. Also refer note 55.

3.2 For details of assets given as security, refer note 26.1 and 29.1

3.3 The leasehold improvements are constructed on land taken under operating lease.

4.1 On transition to Ind AS, the carrying values of all the intangible asset under the previous GAAP have been considered to be the deemed cost under Ind AS. Also refer note 55.

4.2 Software is other than internally generated software.

4.3 Balance useful life of intangible as at 31st March 2018 is 1 to 9 years (31st March 2017 : 1 to 9 years, 1st April 2016 : 1 to 9 years).

5.1 Depreciation is provided on investment property based on useful life on Straight Line Method [Also refer note 3.4].

5.2 Cost of freehold land includes Rs. 134.40 lakhs as at 31st March 2018 (31st March 2017: Rs.134.40 lakhs; As at 1st April 2016: Rs.134.40 lakhs) which is in the name of the Executive Chairman and Managing Director of the Company.

5.3 On transition to Ind AS, the carrying values of all the investment property under the previous GAAP have been considered to be the deemed cost under Ind AS. Also refer note 55.

5.4 For details of assets given as security, refer note 26.1 and 29.1

5.5 The leasehold improvements are constructed on land taken under operating lease.

5.6 Amount recognized in Statement of Profit and Loss for investment properties:

5.7 Leasing arrangement

Certain investment properties are leased to tenants under long-term operating leases with rentals payable monthly. Refer note 47 (a) for details on future minimum lease rentals.

5.8 The Company''s investment properties consist of land situated at Nagpur, Kottayam (Kerala), Baddi (Himachal Pradesh) and office building in Mumbai. The best evidence of fair value is current prices in an active market for similar properties. Company has considered ready reckoner rates as the main input for valuation of these investment properties. All resulting fair value estimates for investment properties are included in Level 2.

6.1 The Company has made a strategic and long term investment of Rs.9,327.75 lakhs in the shares of Orchid Hotels Pune Private Limited (OHPPL), a wholly owned subsidiary of the Company in earlier years. Further, a loan of Rs.19,646.40 lakhs was granted to OHPPL in earlier years. This subsidiary has been declared as non-performing asset by its lender due to defaults in paying the loan dues. This subsidiary is also facing other adverse factors which have severely affected its financial position. Considering these adverse factors, in the earlier years the Company had made a provision for impairment of investment and loan outstanding from the subsidiary.

In view of various adverse factors and request made to the Company by the subsidiary for waiver of interest on the loan, Company had waived off interest on this unsecured loan granted until there is improvement in the financial position of the Company. This waiver is effective from 1st January, 2014 Accordingly, no interest is charged by the Company on the outstanding loan.

6.2 The Company has made a strategic and long term investment of Rs.533.00 lakhs (As at 31st March 2017: Rs.533.00 lakhs; as at 1st April 2016: Rs.533.00 lakhs) in the shares of Ilex Developers & Resorts Limited (Ilex), a 32.92% joint venture of the Company in earlier years. In the previous year, the Company had made full provision for impairment of investment based on assessment carried out by the management.

6.3 Out of Company''s investment in equity shares of OHPPL, 57,64,701 equity shares as on 31st March 2018 (31st March 2017: 57,64,701 and 1st April 2016: 57,64,701) have been pledged by the Company to lenders as a security for loans taken by the Company and 35,29,411 equity shares have been pledged by the Company to lenders as a security for loan taken by the Subsidiary Company.

6.4 Company''s investment in equity shares of wholly owned subsidiaries [Kamats Restaurants (India) Private Limited, Fort Jadhavgadh Hotels Private Limited and Mahodadhi Palace Private Limited] and equity shares held in joint venture entity [ILEX Developers and Resorts Limited] is given as security for loan facilities availed by the Company [Also refer note 26.1(a)].

7.1 Security deposit paid having carrying value of Rs.8,000 lakhs as at 31st March, 2018 (As at 31st March, 2017: Rs.Rs. 8,000 lakhs; as at 1st April, 2016: Rs.8,000 lakhs) is interest free and is given for leasehold land taken to Plaza Hotels Private Limited in which director of the Company is also member.

7.2 Loan to subsidiaries include outstanding loan of Rs.418.74 lakhs (31st March, 2017 - Rs.698.74 lakhs; 1st April, 2016 - Rs.827.66) given to Mahodadhi Palace Private Limited (MPPL). This subsidiary is facing adverse factors which have severely affected its financial position. Considering these adverse factors, in the earlier years the Company had made a provision of Rs.698.74 lakhs for doubtful of recovery from this subsidiary. Company has recovered part of the loan during the year of Rs.280.00 lakhs during the year and provision for the same has been written back to the extent of recovery.

Further, in view of various adverse factors and request made to holding company by MPPL for waiver of interest, Company has waived off interest on this unsecured loan granted until there is improvement in the financial position of the Company. This waiver is effective from 28th February, 2017. Accordingly, no interest is charged by the Company on the outstanding loan.

Note:

(a) The Company offsets tax assets and liabilities in and only if it has a legally enforceable right to set off current tax assets and current tax liabilities and the deferred tax assets and deferred tax liabilities relate to income taxes levied by the same authority.

(b) No provision for income tax has been made in the current year as there is no taxable income as per the Income Tax Act, 1961 considering brought forwarded losses and payments made, allowable on payments basis.

8.1 Company has given interest free security deposit having carrying value of Rs.8,000.00 lakhs as at 31st March 2018 (As at 31st March 2017: Rs.8,000.00 lakhs; as at 1st April 2016: Rs.8,000.00 lakhs) for hotel property taken by the Company to an entity in which some of the directors are director and member.

8.2 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 fulfil his obligation to complete the infrastructure for the aforesaid project despite follow up by the Company. In view of inordinate delay in the projects, the expenditure incurred on the said incomplete project has been written off and a provision has been made in the earlier year for the deposit paid to the said party. Company has initiated legal proceedings against the party and other party has also made counter claim for compensation and interest thereon. The matter is pending to be resolved. Adjustments, if any, to the expenditure written off and provision made as above, will be made on disposal / conclusion of the above matter in the year in which matter is settled.

9.1 Trade receivable includes receivable from related parties as given below. This included amount of Rs.7.39 lakhs (As at 31st March 2017: Rs.11.04 lakhs; As at 1st April 2016: Rs. 100.70 lakhs) from entities in which director of the Company is also director.

10.1 Fixed deposit is given as margin money to the Bank for guarantee given by bank to Government and other authorities on behalf of the Company.

10.2 The deposits with prothonotary and senior master in earlier years represents amounts deposited with Hon''ble Bombay High Court on account of pending dispute with a lender, which has been disposed off during the year and the deposits and interest earned thereon has been utilised for repayment of underlying loan.

11. Terms/ rights attached to equity shares :

The Company has only one class of shares referred to as equity shares having a par value of Rs.10. Each holder of equity shares is entitled to one vote per share. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the remaining assets of the Company, after distribution of all preferential amounts. However, there are no preferential amounts inter-se equity shareholders. The distribution will be in proportion to the number of equity shares held by the shareholders (after due adjustment in case shares are not fully paid up).

11.1 Capital reserve represent profit on sale of fixed asset related to an entity amalgamated with Company in the earlier years.

11.2 Capital redemption reserve is credited by amount set aside for redemption of preference shares .

11.3 Securities premium account is used to record the premium on issue of equity shares. The same is utilised in accordance with the provisions of The Companies Act, 2013.

11.4 In terms of the Bombay High Court Order dated 13th January, 2012 the amalgamation reserve is not available for distribution as dividend by the Company.

11.5 Surplus / (Deficit) in Statement of Profit and Loss represent net loss remaining after all intra reserve allocations.

12.1 Details of security provided and terms of repayment

(a) Term loan from banks and others [loans assigned by banks to ARC''s on settlement] aggregating to Rs.29,372.90 lakhs (As at 31st March 2017: Rs.35,426.06 lakhs & As at 1st April 2016: Rs.36,658.86 lakhs) are secured by (i) 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; (ii) First / second ranking pari-passu mortgage on Company''s immovable property being Hotel “VITS” at Andheri (East); (iii) First/ second charge by way of hypothecation of movable fixed assets and current assets of the Company; (iv) Credit card receivables on pari-passu basis; (v) Equitable mortgage of hotel property at Lotus Goa [exclusive to one lender]; (vi) Pledge of equity shares of the Company held by promoters and promoter companies, pledge of certain equity shares of Orchid Hotels Pune Private Limited (subsidiary) and Plaza Hotels Private Limited (related party) and entire equity shares of Kamats Restaurants (India) Private Limited, Fort Jadhavgadh Hotels Private Limited, Mahodadhi Palace Private Limited, ILEX Developers and Resorts Limited and Kamat Holiday Resorts (Silvassa) Limited; and (vii) Corporate guarantee of subsidiaries, joint venture entity and Plaza Hotels Private Limited and personal guarantee of Dr. Vithal Kamat and Mr. Vikram Kamat.

(b) Term loans from banks and others [loans assigned by Bank to ARC''s and NBFC on settlement] aggregating to Rs.3,406.42 lakhs (As at 31st March 2017: Rs.7,480.75 lakhs & As at 1st April 2016: Rs.8,542.20 lakhs) is secured by (i) First ranking pari-passu charge on lands at “The Orchid” at Vile Parle (East) (owned by Plaza Hotels Private Limited) together with hotel buildings (245 rooms) and all appurtenances thereon; (ii) Credit card receivables of Orchid (245 rooms) and ViTs, Mumbai; (iii) Personal guarantees of Dr. Vithal Kamat and Mr. Vikram Kamat; and (iv) Post dates cheques and undertaking to pay 50% of sale proceeds of certain assets in case of sale of those assets.

(c) Term loan is secured by pledge of equity shares of the Company held by the promoter and promoter companies.

(d) Bank loan includes, loan of Rs.3.47 lakhs (As at 31st March 2017: Rs.6.42 lakhs & As at 1st April 2016: Rs.9.01 lakhs) taken for vehicle which is secured by hypothecation of the vehicle for which loan is taken.

12.2 Above inter corporate loan is repayable by 31st March, 2020 or earlier on availability of funds with the Company. As per the terms of the agreement it is not payable in next 12 months as at balance sheet date, hence same is classified under long term borrowing.

12.3 Based on repayment schedules for borrowings [including as per settlement agreement or One Time Settelment sanctioned by various lenders as referred in note 26.4 below], following is maturity profile of term loans from banks and others [assigned loans].

12.4 Settlement of outstanding loan with ARC’s and one time settlement with banks

(a) The Company had borrowed funds in earlier years from banks, financial institutions and NBFCs. Due to financial crisis faced by economic slowdown and other factors, a Corporate Debt Restructuring (CDR) Scheme was sanctioned by the Corporate Debt Restructuring Empowered Group vide sanction letter dated 12th March, 2013. In respect of some of the restructured debts from some of the lenders, despite best efforts taken by the Company, the stipulated assets of the Company could not be sold and consequently the debts agreed to be repaid out of the above debts could not be repaid by 31st March, 2014 and hence CDR scheme failed and Company exited from the CDR scheme. Subsequently, most of the lenders have initiated recovery proceeding including under SARFAESI Act and the Negotiable Instrument Act,1881. One of the lender also filed recovery proceedings with Hon''ble Bombay High Court in which another lender having rights on escrow of credit card receivable intervened and finally the case was disposed off by consent.

Subsequently, most of these loans were assigned by the lenders to the Asset Reconstruction Companies (ARC). Company has negotiated with the Banks and ARC''s and restructured the above debts through settlement agreements or one time settlements (OTS) of outstanding dues. Consequently, in respect of settlement made during the year interest of Rs.1,567.69 lakhs has been written back (Previous year: Rs.3,061.75 lakhs), which is disclosed as exceptional item in note 40.

(b) With respect to above settled loans, Company is discharging its obligations in terms of the settlement with the respective assignees. In the event of default of terms and conditions of the settlements, the Company may be liable to pay additional and penal interest and charges which are estimated to be Rs.17,195.41 lakhs (As at 31st March 2017: Rs.11,761.43 lakhs & As at 1st April 2016: Rs. Nil).

(c) With respect to case filed under Negotiable Instrument Act, 1881, since the relevant loan has been fully assigned, the Company is advised that the proceedings under the said Act will not survive. In the event these proceedings are held against the Company, it may be liable to pay penalty which is estimated at Rs.1,000 lakhs (As at 31st March 2017: Rs.1,000 lakhs & As at 1st April 2016: Rs.1,000 lakhs). In view of the above, in the opinion of the management, no provision is considered necessary.

13.1 Security deposit received having carrying value of Rs.80.00 lakhs as at 31st March 2018 (As at 31st March 2017: Rs.80.00 lakhs; as at 31st April 2016: Rs.80.00 lakhs) is interest free and is received against hotel property given by the Company under operation and management agreement. This deposit is received from an entity in which Company''s director is also director.

14.1 Working capital loan from a bank was secured by hypothecation of entire stock and book debts (excluding credit card receivables and receivables of 127 rooms - The Orchid Expansion) of the Company and second pari passu charge by mortgage of immovable property being Hotel “VITS” at Andheri (East), hypothecation of all movable assets thereat, pledge of shares and personal and corporate guarantees of certain promoter directors and entities. This loan had been assigned to ARC by the lender in the previous year [Also refer note 26.4].

15.1 The amount due to Micro, Small and Medium Enterprises as defined in the Micro, Small and Medium Enterprises Development Act (MSMED Act), 2006 has been determined to the extent such parties have been identified on the basis of information collected by the management. The disclosure relating to Micro, Small and Medium Enterprises is as under:

16.1 Provision for finance cost written back and reduction in liability towards long term & short term borrowing represents write back of interest provision made in earlier years and write back of loan liability on settlement with the lenders of the Company.

16.2 Loss on discard of property, plant and equipment represents discard of fixed assets on pre-termination of lease arrangement at one of the hotel property taken under operating lease.

17 Capital Commitments, Other Commitments and Contingent Liabilities

17.1 Capital Commitments.

(a) Estimated amount of capital commitments to be executed on capital accounts and not provided for Rs.39.62 lakhs as at 31st March 2018 (31st March 2017: Rs.5.63 lakhs; As at 1st April 2016: Rs.4.49 lakhs) (Net of advances).

17.2 Other significant commitments.

(a) The Company had put up Sewage Treatment Plant (“STP”) 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 the property. The modalities of the same being worked out.

(b) Undertaking given by the Company in favour of a lender to repay the loan to the extent of 50% of sale proceeds from certain specified assets (in case sold) - Expected obligation of Rs.1,236.82 lakhs (As at 31st March 2017: Rs.1,236.82 lakhs & As at 1st April 2016: Rs.1,236.82 lakhs) as per management estimate.

In respect of (i) above, future cash outflows (including interest/ penalty, if any) are determinable on receipt of judgement from tax authorities / labour court/ settlement of claims or non-fulfilment of contractual obligations. Further, the Company does not expect any reimbursement in respect of above. In respect of (ii) above, Company does not expect any cash outflow till such time contractual obligations are fulfilled by the companies for which guarantees are issued (Also refer note 2.4 (x) of financial statements).

Notes:

(a) Transactions with related parties and outstanding balances at the year end are disclosed at transaction value.

(b) In addition to above transactions,

(i) Mahodadhi Palace Private Limited, Kamats Restaurant (India) Private Limited, Fort Jadhav Gadh Hotels Private Limited, Ilex Developers & Resorts Limited, Plaza Hotels Private Limited, Kamat Holiday Resorts (Silvassa) Limited, Dr. Vithal V. Kamat, Mr. Vikram V. Kamat have given joint corporate guarantee amounting to Rs.38,583.00 lakhs (As at 31st March 2017: Rs.38,583.00 lakhs & As at 1st April 2016: Rs.38,583.00 lakhs) to banks/ others for credit facilities availed by the Company [Share of respective entities/ persons is not quantifiable].

(ii) KMP, relatives of KMP and entities in which KMP has significant influence have pledged equity shares held by them in the Company and other investments to the lenders for borrowing of the Company.

17.3 Terms and conditions of transactions with related parties

The transactions with related parties are made on terms equivalent to those that prevail in arm''s length transactions. Outstanding balances at the year-end are unsecured and settlement occurs in cash. In case of advances given to two wholly owned subsidiaries, Company has waived interest. For the year ended 31st March 2018, the Company has not recorded any impairment of receivables relating to amounts owed by related parties. Company has recorded impairment of receivable and investment in two subsidiaries and a joint venture entity in earlier years. This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates.

18 Breakup of compensation to key managerial personnel

Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the entity, directly or indirectly, including any director (whether executive or otherwise) of that entity.

*As the liabilities for defined benefit plans are provided on actuarial basis for the Company as a whole, the amounts pertaining to Key Management Personnel are not included.

19 Disclosure relating to employee benefits as per Ind AS 19 ‘Employee Benefits’

(i) Disclosures for defined contribution plan

The Company has certain defined contribution plans. The obligation of the Company is limited to the amount contributed and it has no further contractual obligation. Following is the details regarding Company''s contributions made during the year:

(ii) Disclosures for defined benefit plans

(a) Defined benefit obligations - Gratuity (funded)

The Company has a defined benefit gratuity plan for its employees. The gratuity plan is governed by the Payment of Gratuity Act, 1972. Under the Act, every employee who has completed five years of service is entitled to specific benefit. The level of benefits provided depends on the employee''s length of service and salary at retirement age. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn) for each completed year of service as per the provisions of the Payment of Gratuity Act, 1972. The scheme is funded with insurance companies in the form of a qualifying insurance policy.

(b) Compensated absences (non-funded)

As per the policy of the Company, obligations on account of benefit of accumulated leave of an employee is settled only on termination / retirement of the employee. Such liability is recognised on the basis of actuarial valuation following Project Unit Credit Method.

Risks associated with plan provisions

Valuations are based on certain assumptions, which are dynamic in nature and vary over time. As such Company is exposed to various risks as follows:

20 Leases

(a) Asset given under operating lease

The Company has given shops, office premises and hotel property under operating lease under non-cancellable operating leases. The Company has recognised Management fees income of Rs.190.05 lakhs during the year (Previous year: Rs.217.94 lakhs). The contractual future minimum lease payment receivables in respect of these leases are:

Total contingent rent income (in the form of management fees) recognised during the year Rs.9.32 lakhs (Previous year: Rs.8.37 lakhs).

Note:

(i) With respect to hotel property given under operation and management agreement, Company gets management fees calculated based on percentage of revenue earned by the lessee from this property. Since future revenue is based on percentage of revenue which is contingent in nature, other disclosures as required under Ind AS 17 - ''Leases'' are not quantifiable with respect to such arrangement as at the balance sheet date.

(b) Asset taken under operating lease

The Company has taken hotel property under operating lease under non-cancellable operating leases. The Company has recognised management fees/ rent expenses of Rs.167.22 lakhs during the year (Previous year: Rs.151.02 lakhs). The contractual future minimum lease payable in respect of these leases are:

Total contingent rent expenses (in the form of royalty and management fees) recognised during the year Rs.127.36 lakhs (Previous year: Rs.119.66 lakhs).

Note:

(i) With respect to hotel properties/ land taken under lease/ operation and management arrangement, Company is liable to pay management fees/ rent based on gross operating profits, revenue etc. Since future revenue is contingent in nature, other disclosures as required under Ind AS 17 - ‘Leases'' are not quantifiable with respect to such arrangements as at the balance sheet date.

21 Disclosure pursuant to the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and section 186(4) of the Companies Act, 2013 in respect of loans and advances in the nature of loans:

Loans and advances in the nature of loans given to subsidiaries are for business purposes. Refer note 43 for corporate guarantee given and investment in securities:

22 Note on Cash Flow Statement

i) The aggregate amount of outflow on account of direct taxes paid is Rs.62.05 lakhs (previous year Rs.108.06 lakhs).

ii) Changes in financing liabilities arising from cash and non-cash changes:

23 Disclosures as required by Indian Accounting Standard (Ind AS) 108 - Operating Segments

There are no reportable segments under Ind AS-108 ‘Operating Segments'' as the Company is operating only in the hospitality service segment, therefore, disclosures of segment wise information is not applicable. Further, no single customer represents 10% or more of the Company''s total revenue during the year ended 31st March 2018 and 31st March 2017.

24 Going concern assumption

As per standalone financial results, Company''s accumulated losses as at 31st March, 2018 are in excess of its paid up capital and other equity and its current liabilities exceed the current assets as on that date. In the opinion of the management, considering the future business prospects, and the fact that the fair values of the assets of the Company are significantly higher than the debts, financial statements have been prepared on a going concern basis which contemplates realisation of assets and settlement of liabilities in the normal course of Company''s business.

25 Financial instruments - Accounting classifications & fair value measurement

(a) Financial instruments by category

FVTOCI - Fair Value Through Other Comprehensive Income FVTPL - Fair Value Through Profit or Loss

Note: Above disclosure excludes investments (gross) in subsidiaries and joint venture amounting to Rs.9,864.74 lakhs as on 31st March, 2018 (As at 31st March 2017: Rs.9,864.74 lakhs and as at 1st April 2016: Rs.9,864.74 lakhs) as these are valued at cost in accordance with Ind AS 27 - ‘Separate Financial Statement''.

(b) Fair valuation techniques

The Company maintains policies and procedures to value financial assets or financial liabilities using the best and most relevant data available. The fair values of the financial assets and liabilities are included at the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

The management assessed that fair value of Trade receivables (net), Cash and cash equivalents, Other current financial assets, Current borrowings, Trade payables and Other current financial liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments. Further, the management has assessed that fair value will be approximate to their carrying amounts as they are priced to market interest rates on or near the end of reporting period.

(c) Fair value hierarchy

Financial assets and financial liabilities are measured at fair value in the financial statement and are grouped into three levels of a fair value hierarchy. The three Levels are defined based on the observability of significant inputs to the measurement, as follows:

Level 1 : Quoted (unadjusted) prices in active markets for identical assets or liabilities.

Level 2 : Other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or indirectly.

Level 3 : Techniques which use inputs that have a significant effect on the recorded fair value that are not based on observable market data.

(d) Financial assets/ liabilities measured at fair value

The following table represents the fair value hierarchy of assets and liabilities measured at fair value on a recurring basis.

Notes:

(i) The above disclosures are given only for non-current financial assets and non-current financial liabilities. Short term financial assets and current financial liabilities (investment, cash and cash equivalents, other receivables, trade payables and other current financial liabilities) represents the best estimate of fair value.

(ii) Management uses its best judgement in estimating the fair value of its financial instruments. However, there are inherent limitations in any estimation technique. Therefore, for substantially all financial instruments, the fair value estimates presented above are not necessarily indicative of the amounts that the Company could have realised or paid in sale transactions as of respective dates. As such, fair value of financial instruments subsequent to the reporting dates may be different from the amounts reported at each reporting date.

(iii) There have been no transfers between Level 1 and Level 2 for the years ended March 31, 2018, March 31, 2017 and April 1, 2016.

26 Risk management framework

The Company''s Board of Directors has overall responsibility for the establishment and oversight of the Company''s risk management framework. The board of directors has established the Risk Management Committee, which is responsible for developing and monitoring the Company''s risk management policies. The Committee reports regularly to the Board of Directors on its activities. The Company''s risk management policies are established to identify and analyse the risk faced by the Company, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Company''s activities. The Company''s Audit Committee oversees how management monitors compliance with the Company''s risk management policies and procedures, and reviews the adequacy of the risk management framework in relation to the risks faced by the Company. The Audit Committee is assisted in its oversight role by internal audit team. Internal audit team undertakes both regular and adhoc reviews of risk management controls and procedures, the results of which are reported to the audit committee.

The Company has exposure to the following risks arising from financial instruments:

- Credit risk;

- Liquidity risk;

- Market risk

(a) Credit risk :

Credit risk arises from the possibility that customers or counterparty to financial instruments may not be able to meet their obligations. To manage this, the Company periodically assesses the financial reliability of customers, taking into account the financial condition, current economic trends, analysis of historical bad debts and ageing of accounts receivable. Credit risks arises from cash and cash equivalents, deposits with banks, financial institutions and others, as well as credit exposures to customers, including outstanding receivables.

The Company considers factors such as track record, size of institutions, market reputation and service standards to select banks with which balances and deposits are maintained. The balances and fixed deposits are generally maintained with the banks with whom the Company has regular transactions. Further, the Company does not maintain significant cash in hand other than those required for its day to day operations. Considering the same, the Company is not exposed to expected credit loss of cash and cash equivalent and bank balances.

The Company has established a credit policy under which each new customer is analysed individually for creditworthiness before entering into contract. Sale limits are established for each customer, reviewed regularly and any sales exceeding those limits require approval from the appropriate authority. There are no significant concentrations of credit risk within the Company.

(b) Liquidity risk :

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company''s approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to Company''s reputation.

Management monitors rolling forecasts of the Company''s liquidity position and cash and cash equivalents on the basis of expected cash flows to ensure it has sufficient cash to meet operational needs. Such forecasting takes into consideration the Company''s debt financing plans, covenant compliance and compliance with internal statement of financial position ratio targets.

(i) Maturities of financial liabilities:

The following are the remaining contractual maturities of financial liabilities at the reporting date:

(c) Market risk

Market risk is the risk that the changes in market prices such as foreign exchange rates, interest rates and equity prices will affect the Company''s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return. The pre dominant currency of the Company''s revenue and operating cash flows is Indian Rupees (INR). Company has earnings in foreign currency. There is no foreign currency risk as there is no outstanding foreign currency exposure at the year end.

(d) Interest Rate Risk

The Company has taken term loans from bank and others (including loan assigned by banks on one time settlement). With respect to loans which are settled with banks or assigned to asset reconstruction companies aggregating to Rs.31,183.04 lakhs as at 31st March 2018 (as at 31st March 2017 Rs.33,701.36 lakhs and as at 1st April 2016 Rs.29,770.40 lakhs), there is no interest payable. Other borrowings attracts fixed rate of interest. Therefore, there are no interest rate risks, since neither the carrying amount nor the future cash flows will fluctuate because of change in market interest rates.

27 Capital risk management

The Company manages its capital to ensure that it will be able to continue as a going concern so, that they can continue to provide returns for shareholders and benefits for other stakeholders and maintain an optimal capital structure to reduce cost of capital. The Company manages its capital structure and make adjustments to, in light of changes in economic conditions, and the risk characteristics of underlying assets. In order to achieve this overall objective, the Company''s capital management, amongst other things, aims to ensure that it meets financial covenants attached to the borrowings that define the capital structure requirements.

Consistent with others in the industry, the Company monitors capital on the basis of the gearing ratio. The ratio is calculated as net debt divided by equity. Net debt is calculated as total borrowing (including current and non-current terms loans as shown in the balance sheet).

* Total debt = Non-current borrowings current borrowings current maturities of non-current borrowings

28 Disclosure as required by Ind AS 101 - First time adoption of Indian Accounting Standards

(a) Basis of preparation

These are the Company''s first financial statements prepared in accordance with Ind AS. For the periods up to and including the year ended 31 March 2017, the Company had prepared its financial statements in accordance with Indian GAAP.

Accordingly, the Company has prepared financial statements which comply with Ind AS applicable for the year ended 31st March 2018, together with the comparative period data as at and for the year ended 31st March 2017, as described in the summary of significant accounting policies. In preparing these financial statements, the Company''s opening balance sheet was prepared as at 1st April 2016 being the Company''s date of transition to Ind AS. This note explains the principal adjustments made by the Company in restating its Indian GAAP financial statements, including the balance sheet as at 1st April 2016 and the financial statements as at and for the year ended 31st March 2017 to Ind AS.

(b) Previous year figures have been regrouped/reclassified in IGAAP wherever necessary to confirm with financial statements prepared as per Ind AS.

(c) Exemption availed

“Ind AS 101 - First-time adoption of Indian Accounting Standards” allows first time adopters certain exemptions from the retrospective application of certain Ind AS. The Company has applied the following optional exemption:

(i) Deemed cost of property, plant and equipment, intangible asset and investment property

Ind AS 101 permits a first-time adopter to elect to continue with the carrying value for all of its property, plant and equipment and intangible assets as recognised in the financial statements as at the date of transition to Ind AS, measured as per the previous Indian GAAP and use that as its deemed cost as at the date of transition. Accordingly, the Company has elected to measure all of its property, plant and equipment and intangible assets at their previous Indian GAAP carrying value.

(ii) Business combinations

Ind AS 101 provides the option to apply Ind AS 103 prospectively from the transition date or from a specific date prior to the transition date. This provides relief from full retrospective application that would require restatement of all business combinations prior to the transition date. The Group elected to apply Ind AS 103 prospectively to business combinations occurring after its transition date. Business combinations occurring prior to the transition date have not been restated.

(iii) Investment in subsidiary and joint venture entity

Ind AS 101 permits a first-time adopter to continue previous GAAP carrying value for investment in equity instrument of subsidiaries, associates and joint ventures. Accordingly, the Company has elected to apply the said exemption.

(d) Estimates

The estimates at 1st April 2016 and at 31st March 2017 are consistent with those made for the same dates in accordance with Indian GAAP (after adjustments to reflect any differences in accounting policies) except in respect of impairment of financial assets based on expected credit loss model where application of Indian GAAP did not require estimation.

The estimates used by the Company to present impairment of financial assets based on the expected credit loss model is in accordance with Ind AS which reflect conditions as at 1st April 2016, the date of transition to Ind AS and as of 31st March 2017.

(e) Reconciliation between previous India GAAP and Ind AS

Ind AS 101 requires the Company to reconcile the effects of the transition from Indian GAAP to Ind AS on the equity as at 1st April 2016 and 31st March 2017 and on the total comprehensive loss and cash flows for the year ended 31st March 2017:

(i) Reconciliation of equity as on 1st April 2016 (i.e. date of transition to Ind AS)

(f) Explanations for reconciliation of Balance Sheet as previously reported under IGAAP to Ind AS:

(i) Financial liabilities at amortised cost

Under Ind AS 109 requires transaction costs incurred towards origination of borrowings to be deducted from the carrying amount of borrowings on initial recognition. These costs are recognized in the statement of profit and loss over the tenure of the borrowing as part of the finance cost by applying the effective interest method. Under previous GAAP, these transaction costs were charged to statement of profit and loss on straight-line basis over the period of loan.

Under previous GAAP, financial liabilities were initially recognized at transaction price. Subsequently, any finance costs were recognized based on contractual terms. Under Ind AS, such financial instruments are initially recognized at fair value and subsequently carried at amortised cost determined using the effective interest rate. Any difference between transaction price and fair value affects profit and loss unless it quantifies for recognition as some other type of liability.

(ii) Financial assets at amortised cost

Under previous GAAP, financial assets and security deposits paid were initially recognized at transaction price. Under Ind AS, such financial instruments are initially recognized at fair value and subsequently carried at amortised cost determined using the effective interest rate. Any difference between transaction price and fair value affects profit and loss unless it quantifies for recognition as some other type of asset.

(iii) Investment property

Under the previous GAAP, investment properties were presented as part of property, plant and equipment. Under Ind AS, investment properties are required to be separately presented on the face of the balance sheet. There is no impact on the total equity or profit as a result of this adjustment.

(iv) Reclassification of assets and liabilities on transition to Ind AS

On transition to Ind AS, assets and liabilities are reclassified in accordance with classification and disclosure requirement as per Ind AS.

(v) Other comprehensive income

Under Ind AS, all items of income and expense recognized in a period should be included in profit or loss for the period, unless a standard requires or permits otherwise. Items of income and expense that are not recognized in profit or loss but are shown in the statement of profit and loss as ‘other comprehensive income'' includes re-measurements of defined benefit plans. concept of other comprehensive income did not exist under previous GAAP. Tax component on the gain/ (loss) on fair value of defined benefit plans have been transferred to the OCI under Ind AS.

(vi) Tax impact of above adjustments

Retained earnings and statement of profit and loss has been adjusted consequent to the Ind AS transition adjustments with corresponding impact to deferred tax, wherever applicable.

(vii) Rectification of error made in previous GAAP are adjustment in opening equity of 1st April 2016:

- Short depreciation provided in earlier years;

- Error in amortization of non-refundable membership deposit;

- Short interest expenses accounted on club/ bond deposit;

- Short deferred tax liability accounted in earlier years.

(viii) The impact of transition from Indian GAAP to IND AS on the Statement of Cash Flows is due to various reclassification adjustments recorded under IND AS in Balance Sheet, Statement of Profit & Loss and difference in the definition of cash and cash equivalents as per these two GAAP''s.

(ix) Leasehold land considered as finance lease in previous GAAP is reclassified as operating lease and upfront fees paid is amortized over the period of lease.

(x) Other comprehensive income are considered and presented as per schedule III of Companies Act, 2013


Mar 31, 2016

1 Term loans from Banks (including assigned loans of Rs, 21,240.00 Lakhs (Previous year Rs, 21,550.17 Lakhs) in favour of certain Asset Reconstruction Companies) secured by a 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 / second 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, pledge of Equity Shares of the Company held by promoters, pledge of Equity Shares of the Subsidiary companies viz. Orchid Hotels Pune Pvt. Ltd., Kamats Restaurants (India) Pvt. Ltd., Fort Jadhavgadh Hotels Pvt. Ltd. and Fort Mahodadhinivas Palace Pvt. Ltd. and certain Associate Companies viz. ILEX Developers and Resorts Ltd. Plaza Hotels Pvt. Ltd. and Kamat Holiday Resorts (Silvassa) Ltd. and personal and corporate guarantees of certain promoter directors and entities.

2 Term Loans under Structured Mezzanine Credit Facility from Banks (including assigned loans of Rs, 1,489.00 Lakhs (Previous year Rs, 1,279.41 Lakhs) in favour of certain Asset Reconstruction Companies) 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.

3 Term loans from Financial Institution and Others (including assigned loans of Rs, 8,034.38 Lakhs (Previous year Rs, 8,475.78 Lakhs) in favour of certain Asset Reconstruction Companies) 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 / second ranking pari-passu mortgage on Company''s immovable property being Hotel “VITS” at Andheri (East), hypothecation of all movable assets there at, Credit Card receivables, pledge of Equity Shares of the Company held by promoters, pledge of Equity Shares of the Subsidiary companies viz. Orchid Hotels Pune Pvt. Ltd., Kamats Restaurants (India) Pvt. Ltd., Fort Jadhavgadh Hotels Pvt. Ltd. and Fort Mahodadhinivas Palace Pvt. Ltd. and certain Associate Companies viz. ILEX Developers and Resorts Ltd., Plaza Hotels Pvt. Ltd. and Kamat Holiday Resorts (Silvassa) Ltd. and personal and corporate guarantees of certain promoter directors and entities and certain other collateral securities.

4 The Corporate Debt Restructuring (CDR) Scheme sanctioned by the Corporate Debt Restructuring Empowered Group vide sanction letter dated 12th March, 2013 in respect of restructured debts of Rs, 33,636.36 lakhs from some of the lenders failed in the previous year as despite best efforts by the Company, the stipulated assets of the Company could not be sold and consequently the debts aggregating to Rs,19,614.37 lakhs agreed to be repaid out of the above debts could not be repaid by 31st March, 2014. As explained in Note 38 to Financial Statements the concerned lenders recalled their entire dues. Some of the lenders assigned their respective loans aggregating to Rs, 32,147.88 lakhs (Prev. Year Rs, 25,199.38 lakhs) to securitization and asset reconstruction companies during the year and previous year. Accordingly, these loans at their restated values have been classified as Non-Current and Current Maturities in accordance with the agreements with the assignees. These loans have been referred to as assigned loans.

5 In respect of loans from a lender (Previous year two lenders), no provision for interest aggregating to Rs, 277.27 lakhs (Prev. Year Rs, 530.03 lakhs) has been made for the year ended 31st March, 2015 and 31st March, 2016 respectively, as the Company has not accepted their claims and matter was disputed and in one case pending before the Bombay High Court. In terms of interim orders passed by the Bombay High Court, the Company has deposited an aggregate amount of Rs, 3,050.24 lakhs (Previous year Rs, Nil) with the Prothonotary & Senior Master till 31st March, 2016 which has been shown in Note 21. Adjustments, if any, will be made on reconciliation / settlement and disposal of the legal case filed by the lender.

6 Borrowings out of the aggregate amount of Non-Current and Current portion of Rs, 46,203.05 lakhs (Prev. Year Rs, 46,783.28 lakhs), to the extent of Rs, 16,244,79 lakhs (Prev. Year Rs, 22,147.82 laksh) are subject to confirmation from respective lenders, who have initiated recovery proceeding including under SARFAESI Act and The Negotiable Instruments Act 1881.

7 Maturity Profile of Term Loans from Banks and others (Non - Current) and rate of interest are as set out below (after considering failure of CDR Scheme and Assignment of loans) :

8. The Company has deferred its Sales tax liability in terms 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.

9. The Company has received Long term trade deposit of Rs, 80.00 lakhs (Previous Year Rs, 80.00 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.

10. Working Capital loan from a Bank is secured by hypothecation of entire stock and book debts (excluding credit card receivables and receivables of 127 rooms - The Orchid Expansion) of the Company and second pari passu charge by mortgage of immovable property being Hotel “VITS” at Andheri (East), hypothecation of all movable assets thereat, pledge of shares and personal and corporate guarantees of certain promoter directors and entities.

11 The Company has made a strategic and long term investment of Rs, 9,327.75 lakhs in the shares of Orchid Hotels Pune Private Limited (OHPPL), a wholly owned subsidiary of the Company. Further, a loan of Rs, 19,646.40 lakhs and outstanding interest thereon for the period upto December, 2013 of Rs, 4,198.16 lakhs is recoverable from OHPPL. OHPPL has been declared as non-performing asset by its lender due to defaults in paying the loan dues. OHPPL is also facing other adverse factors which have severely affected its financial position. Considering these adverse factors, the Company has made a provision for Rs, 23,844.56 lakhs towards recovery of loan and interest dues upto December, 2013 in earlier years. Since the loan is considered doubtful of recovery, interest on the outstanding loan is not recognized as income for the period after December, 2013. The Company has also made a provision for Rs, 9,327.75 lakhs (Prev. Year Rs, Nil) towards the diminution in value of investment in OHPPL during the year in view of adverse factors.

12 Out of 1,17,64,706 (Previous Year 1,17,64,706), 57,64,701 (Previous Year 57,64,701) shares have been pledged by the Company to lenders as a security for loans taken by the Company and 35,29,411 (Previous Year 35,29,411) shares have been pledged by the Company to lenders as a security for loan taken by the Subsidiary Company (Refer Note 5.1 and 5.3).

13. Payment of Taxes is net of provision for tax of Rs, 1,244.49 lakhs (Previous Year Rs, 361.89 lakhs) and further after adjusting Rs, 211.75 lakhs (Previous year Rs, 117.17 lakhs ) for MAT credit availed during the previous year.

14. The above deposits include Rs, 8,000.00 lakhs (Previous Year Rs, 8,000.00 lakhs ) paid to Plaza Hotels Private Limited for hotel properties (a Company wherein some directors of the Company are directors).

15. 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 fulfill his obligation to complete the infrastructure for the aforesaid project despite follow up by the Company. In view of inordinate delay in the projects, 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 filing 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 filed its Statement of Claims before the arbitrator. The owners also filed 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 has approached the High Court again for directions. Pursuant to the directions given by the High Court vide Order dated 4th February, 2016, sole Arbitrator has been appointed and the matter is pending before him. 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.

16. The CompanyRs,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.

17. include Rs, 38.85 lakhs (Previous year Rs, Nil) relating to previous year.

18. Defined Benefit Plan:

The employeesRs, 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.

19. 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 previous year and included in other income in Note 24. 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.

20. The Municipal Corporation of Greater Mumbai (MCGM) has raised an additional demand for property tax of Rs, 111.71 lakhs (Previous Year Rs, Nil lakhs) for the year 2015-2016 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, The Orchid Privi Wing Mumbai and VITS, Mumbai. In respect of Company''s offices 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 invoices raised by MCGM and adjustment, if any, will be made on disposal of Company''s objections and appeals.

21 Interest expense include '' Nil (Prev. Year Rs, 1,085.61 lakhs) being additional interest relating to period upto 31st March, 2014 payable on loans which was necessitated due to withdrawal of CDR Scheme during the previous year.

22 Reference is invited to note 38 relating to non provision of interest for the year due to disputes with certain lenders.

23 Other Borrowing Costs include OTS charges of Rs, 624.18 lakhs (Prev. Year Rs, Nil) on restructuring of certain loans during the year by way of assignment.

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 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.

24 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).

25 Related Party Disclosures:

Related Parties where control exists:

(a) Wholly owned subsidiary Companies:

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

(b) Jointly Controlled Entity:

Ilex Developers & Resorts Limited (Joint Venture)

(c) 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

Treeo Resort Private Limited

(d) Key Management Personnel and their relatives:

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

Mr. Vikram V. Kamat - Executive Director (Resigned during the previous year as Executive Director, who is also a relative.)

Mrs. Vidya V. Kamat - Relative

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

(e) 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

(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, 2016:

27.1 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 in the previous year. The Company is entitled to a fixed fee of seven percent of the annual turnover of the banquet halls and restaurant. The Company has received the fee of Rs, 120.74 lakhs (Previous Year Rs, 96.79 lakhs) for the year which is included in Note 23.

28 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:

29 The Company has received Long Term trade Deposit of Rs, 80.00 lakhs (Previous Year Rs, 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.

30. Figures in the bracket are for previous year.

31. Pursuant to notification of Schedule II to the Companies Act, 2013 with effect from 1st April, 2014, depreciation for the Previous year ended 31st March, 2015 was provided on the basis of useful lives as prescribed therein except in respect of items of plant and machinery costing '' 10,000/- or less which are depreciated fully in the year of acquisition. Accordingly, depreciation for the Previous year ended 31st March, 2015 was higher by ''150.78 lakhs due to change in the estimate of useful life of certain assets and an amount of Rs, 560.02 lakhs (Net of deferred tax) was recognized in the opening balance of retained earnings in respect of assets in respect of which useful life is Nil. Depreciation of Rs, 146.01 lakhs (Previous year Rs, Nil) which was found excess provided in respect of certain fixed assets in the previous year has been written back in this year and included in Other Income in Note 24.

32. The Company has borrowed funds from various banks, financial institutions and certain NBFCs in the past. Due to financial crisis faced by economic slowdown 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 participated 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 borrowings by 31st March, 2014 to certain lenders out of sale proceeds of one of its hotel units. Despite best effort, the Company could not dispose of 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 23rd July, 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 participate in CDR package. Consequently, the lenders issued notices Under Section 13(2) of the (The Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002) and recalled the entire dues. The Company has disputed the same. One of the lenders filed suit for recovery of the entire dues during the financial year, which is pending before the Bombay High Court and the Company has disputed the claim. In terms of interim orders passed by the High Court the Company has been depositing proceeds of its credit card collections with the Prothonotary & Senior Master of the High Court which aggregated to Rs, 3.050.24 Lakhs till 31st March, 2016. Final adjustment will be made on disposal of the legal case. Another lender has filed application before the Debt Recovery Tribunal (DRT) during the year for recovery of entire loan, interest and charges and made a claim of Rs, 6,356.49 lakhs upto August, 2015 with further interest and charges, which is disputed by the Company. The Company has made provision for interest on this loan as per loan agreement and final adjustment will be made on disposal of the application in due course of time. Reference is invited to Notes 6.5 and 30 regarding disputed interest and charges aggregating to Rs, 704.25 Lakhs (Previous year Rs,530.03 lakhs), which have not been provided in the accounts.

33. The Company has incurred losses in the previous year as well as in the year under reference and its accumulated losses are in excess of its paid up Capital and reserves and surplus. As explained in Note 38, some of the lenders have recalled their loans. However, considering the future business prospects, the fact that four major lenders have assigned 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.

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


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.


Mar 31, 2011

1. Background:

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, and FCCBs are listed on the Singapore Exchange Securities Trading Limited, Singapore.

Kamats is operating in hospitality sector, with its hotels and restaurants located in the states of Maharashtra (Mumbai, Nashik, Nagpur, Pune and Sawantwadi), Orissa (Puri, Ramchandi, Konark, Dhauli, and Cuttack) and Rajasthan (Jaipur). Kamats also manages hotels and resorts owned by others at Delhi, Aurangabad, Udaipur and Karwar.

2.1 Previous Year Comparatives:

The figures for the previous year have been regrouped / rearranged wherever necessary.

2.2 Contingent Liabilities:

(a) Estimated amount of capital commitments to be executed on capital account and not provided for Rs. 1,233.61 Lakhs (Previous Year Rs. 1,174.63 Lakhs) (Net of advances).

(b) Disputed Income Tax Demand Rs. 731.29 Lakhs (Previous Year Rs.2.89 Lakhs):

The above includes a disputed demand of Rs. 728.40 Lakhs (Previous year Rs. Nil) raised on completion of assessment for assessment year 2008-09 during the year, which has been disputed by the Company in appeal, which is pending. Pending disposal of this appeal, the appeals of erstwhile The Himco (India) Limited, which got merged with the Company in earlier years have been decided in favour of the Company entitling it to the benefit of brought forward loss and unabsorbed depreciation, which can be set off against the income assessed for the assessment year 2008-09. On giving effect 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.

(c) Open import Licence Rs. 129.24 Lakhs (Previous Year Rs. 392.55 Lakhs).

(d) Corporate guarantee given to a bank in respect of credit facilities availed by Subsidiary Company for Rs.16,434.00 Lakhs (Previous Year Rs.16,434.00 Lakhs).

(e) Obligation towards payments to project creditors of Subsidiary company for Rs. 2,560.81 Lakhs (Previous Year Rs. 2,792.60 Lakhs) (Refer Note 3.14 of Schedule "N").

(f) Counter Guarantees issued by the Company to secure Bank Guarantees Rs. 104.62 Lakhs (Previous year Rs. 107.02 Lakhs).

(g) Differential Interest payable on FCCBs on the basis of Yield To Maturity of 8.80% per annum, in the event of non-conversion of Bonds into equity Rs. Nil (Previous Year Rs.1,055.51 Lakhs) (Refer Note 1 of Schedule "D").

(h) Monetary value of unredeemed points in respect of Sales Promotion Scheme Rs. 102.73 Lakhs (Previous Year Rs. 83.73 Lakhs).

3.3 The Company has been making provision for property tax based on bills raised by the local authorities from time to time. The Company had disputed the basis of assessment of rateable value of the Company's hotels at Vile Parle and Andheri, fixed by Mumbai Municipal Corporation in respect of property taxes, by filing appeals before an appropriate Court in earlier years. Appeals in respect of hotel at Vile Parle have either been disposed off by the Court during the previous year or withdrawn by the Company during the year, in view of receipt of approval by the local authorities for reduction of rateable value retrospectively. Accordingly, the excess provision for property tax for earlier years amounting to Rs. Nil (Previous Year Rs.677.91 Lakhs) has been written back during the year and included under Miscellaneous Income (Refer Schedule 'K'). The appeals in respect of the Company's hotel at Andheri are pending and adjustments, if any, in the books of accounts will be made on disposal of appeals.

3.4 Prior Period Adjustments and Exceptional Items:

(a) The Company has exercised the option granted vide Notification F.NO.17/33/2008-CL-V dated 31st March, 2009 issued by the Ministry of Corporate Affairs and, accordingly, the exchange difference/gain arising on revaluation of long term foreign currency monetary items for the year ended 31st March, 2011 has been recognized by deduction from the cost of the related assets of Rs.160.54 Lakhs (Previous Year Gain of Rs. 1,045.71 Lakhs) so far it relates to depreciable capital assets and in other cases by transfer to "Foreign Currency Monetary Item Translation Difference Account" {"FCMITD Account"} to be amortized upto 31st March 2011. The Company has amortized Rs. 4.05 Lakhs (Previous Year Rs. 1.23 Lakhs) in the Profit and Loss Account for the year ended 31st March, 2011 and balance unamortized amount of Rs. Nil (Previous Year Rs.1.23 Lakhs) in the "FCMITD Account" has been carried forward to next year for being amortized as per the aforesaid Notification.

(b) Exceptional item is in respect of Input Service Tax Credit of Rs. 55.07 Lakhs (Previous Year Rs. Nil) available to the Company in respect of cost of certain input services availed and charged to Profit and Loss Account in earlier years, which has been recognized in the current year based on an expert's advice.

(c) Prior period adjustments of Rs. 19.59 Lakhs (Previous Year Rs. Nil) includes excess provisions of Rs. 0.11 Lakhs (Previous Year Rs. Nil) income tax for earlier years and Rs.19.70 Lakhs (Previous Year Rs. Nil) in respect of certain expenses relating to earlier years.

3.5 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) as notified by the Companies (Accounting Standards) Rule, 2006.

3.6 Related Party Disclosures: Related Parties where control exists:

(a) Subsidiary Company:

B W Highway Star Private Limited –Subsidiary (w.e.f. 21st May 2009)

(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 Development Private Limited

Kamat Holiday Resorts Private Limited

Kamats Holiday Resorts (Silvassa) Limited

Vishal Amusements Limited

Indira Investments Private Limited

B W Highway Star Private Limited (Joint Venture) (upto 20th May 2009)

Kamats Restaurants Private Limited

Kamats Holdings Private Limited

Kamat Hotels Private Limited

Kamat Beachfront Hotels Private Limited

(d) Key Management Personnel:

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

Mr. Ramesh N. Shanbhag - Wholetime Director

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

(e) Other related parties with whom transactions have taken place during the year: V. V. Kamat HUF

3.7 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.

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 recognized in the same manner as gratuity.

3.11. Income Tax

In view of brought forward losses and unabsorbed depreciation, the taxable income under normal provisions of Income Tax Act, 1961 is Rs Nil,. However, Provision for tax for the year has been made at Rs.182.00 Lakhs (Previous Year Rs. 103.00 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.182.00 Lakhs (Previous Year Rs.103.00 Lakhs) for the year ended 31st March, 2011.

3.13. (a) Miscellaneous Income of Rs. 142.08 Lakhs (Previous year Rs. 972.24 Lakhs) includes Insurance claim of Rs. 21.25 Lakhs (Previous Year Rs. 27.65 Lakhs) and Excess Provision and Sundry Credits written back of Rs. 50.85 Lakhs (Previous Year Rs. 199.65 Lakhs).

(b) Other Borrowing Costs of Rs. 170.97 Lakhs (Previous Year Rs. 153.06 Lakhs) in Schedule 'M' include Rs. 38.86 Lakhs (Previous Year Rs. Nil) being notional foreign exchange loss of the nature referred to in clause 4 (e) of Accounting Standard 16 - Borrowing Costs (AS 16) as notified by the Companies (Accounting Standards) Rule, 2006.

3.14 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 B W Highway Star Private Limited (hereinafter referred to "B W Highway Star Private Limited" or "the subsidiary") 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 during the previous year (Refer Schedule "H").

During the year under reference, the Company by paying Rs. 400.00 lakhs acquired 4,90,196 equity shares of Rs. 10/- each, fully paid being 4.16% of the equity share capital of B W Highway Star Private Limited from an existing shareholder of that Company making its aggregate holding to 79.16%.

The Company also has issued a Corporate Guarantee to guarantee the due performance / obligations of B W Highway Star Private Limited 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 to the lender. Mr. 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 B W Highway Star Private Limited for purchase of shares and due payment of amounts due. B W Highway Star Private Limited 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 B W Highway Star Private Limited.

3.15 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:

g) Quantitative Information:

In respect of the Company's turnover of Food & Beverages, it is not possible to give quantity-wise details of such turnover. The Government of India, Ministry of Corporate Affairs vide their Order No. 46/119/2009-CL-III dated 24th April, 2009 has exempted the Company from giving these particulars in the accounts for the financial year ending March 2009 to March 2011.


Mar 31, 2010

1. Background:

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, and FCCBs are listed on the Singapore Exchange Securities Trading Limited, Singapore.

Kamats is operating in hospitality sector, with its hotels and restaurants located in the states of Maharashtra (Mumbai, Nashik, Nagpur, Pune and Sawantwadi), Orissa (Puri, Ramchandi, Konark, Dhauli, and Satpada) and Rajasthan (Jaipur).

2.1 Previous Year Comparatives:

The figures for the previous year have been regrouped / rearranged wherever necessary.

2.2 Contingent Liabilities:

(a) Estimated amount of capital commitments to be executed on capital account and not provided for Rs. 1,174.63 Lakhs (Previous Year Rs.1,372.57 Lakhs) (Net of advances).

(b) Disputed Income Tax Demand Rs.2.89 Lakhs (Previous Year Rs.6.32 Lakhs).

(c) Open import licences Rs. 392.55 Lakhs (Previous Year Rs. 521.14 Lakhs)

(d) Corporate guarantee to a bank given in respect of credit facilities availed by Subsidiary Company for Rs.16,434.00 (Previous Year jointly given with two other Joint Venture Stake holders Rs.10,167.00 Lakhs)

(e) Obligation towards payments to project creditors of Subsidiary company for Rs. 2,792.60 Lakhs (Previous Year Rs. Nil) (Refer Note 3.14 of Schedule "N")

(f) Counter Guarantees issued by the Company to secure Bank Guarantees Rs. 107.02 Lakhs (Previous year Rs. 107.75 Lakhs)

(g) Differential Interest payable on FCCBs on the basis of Yield To Maturity of 8.80% per annum, in the event of non-conversion of Bonds into equity Rs.1,055.51 Lakhs (Previous Year Rs.760.24 Lakhs) (Refer Note 1 of Schedule "D").

(h) Other matter Rs. 83.73 Lakhs (Previous Year Rs.81.61 Lakhs)

3.0 The Company has been making provision for property tax based on bills raised by the local authorities from time to time. The Company had disputed the basis of assessment of ratable value of the Company’s hotels at Vile Parle and Andheri, fixed by Mumbai Municipal Corporation in respect of property taxes, by filing appeals before an appropriate Court in earlier years. Appeals in respect of hotel at Vile Parle have either been disposed off by the Court during the year or withdrawn by the Company after the close of the year in view of receipt of approval by the local authorities for reduction of ratable value retrospectively. Accordingly, the excess provision for property tax for earlier years amounting to Rs.677.91 Lakhs has been written back during the year and included under Miscellaneous Income (Refer Schedule ‘K’). The appeals in respect of the Company’s hotel at Andheri are pending and adjustments, if any, in the books of accounts will be made on disposal of appeals.

3.1 Prior Period Adjustments, Extraordinary items and Changes in Accounting Policies:

(a) Extra-ordinary item for the year represents Luxury tax refund received during the year in terms of Government Notification dated 18th November, 2008, amounting to Rs. Nil (Previous Year Rs.171.71 Lakhs) which was paid and charged to revenue in earlier year on completion of assessment.

(b) The Company has exercised the option granted vide Notification F.NO.17/33/2008-CL-V dated 31st March, 2009 issued by the Ministry of Corporate Affairs and, accordingly, the exchange difference/gain arising on revaluation of long term foreign currency monetary items for the year ended 31st March, 2010 has been recognized by deduction from (previous Year added to) the cost of the related assets of Rs. 1,045.71 Lakhs (Previous Year Loss of Rs. 1,673.64 Lakhs) so far it relates to depreciable capital assets and in other cases by transfer to "Foreign Currency Monetary Item Translation Difference Account"{"FCMITD Account"} to be amortized upto 31st March 2011. The Company has amortized Rs. 1.23 Lakhs (Previous Year Rs. 17.89 Lakhs) in the Profit and Loss Account for the year ended 31st March, 2010 and balance unamortized amount of Rs. 1.23 Lakhs (Previous Year Rs.35.78 Lakhs) in the "FCMITD Account"has been carried forward to next year for being amortized as per the aforesaid Notification.

(c) Benefits arising out of Duty Free Scrips, utilized for the acquisition of fixed assets are, with effect from 1st April, 2009, being adjusted against the cost of related asset, as against the practice hitherto followed of recognising the same as income. Consequent upon the change, miscellaneous income for the year is lower by Rs.27.17 Lakhs, with a corresponding deduction in the value of fixed assets, as also reduction in the depreciation thereon.

3.5 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) as notified by the Companies (Accounting Standards) Rule, 2006.

3.2 Related Party Disclosures:

Related Parties where control exists:

(a) Holding Company or Subsidiary Company:

B W Highway Star Pvt. Limited –Subsidiary (w.e.f. 21st May 2009) Concept Hospitality Limited –Subsidiary (upto 13th March 2009)

(b) Jointly Controlled Entity

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

(c) Associates:

Plaza Hotels Private Limited

Kamats Development Private Limited

Kamat Holiday Resorts Private Limited

Kamat Holiday Resorts (Silvassa) Private Limited

Vishal Amusements Limited

Indira Investments Private Limited

BW Highway Star Private Limited (Joint Venture) (upto 20th May 2009)

Kamat Holdings Private Limited

Venkatesh Hotels Private Limited

Kamats Club Private Limited

Kamburger Foods Private Limited

Kamats Super Snacks Private Limited

Karaoke Amusements Private Limited

Kamat Eateries Private Limited.

Kamat Hotels Private Limited

Kamat Concept Hospitality Private Limited

(d) Key Management Personnel -

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

Mr. Vishal V. Kamat - Executive Director (Resigned w.e.f. 20th October, 2009)

Mr. Ramesh N. Shanbhag - Wholetime Director

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

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

V. V.Kamat HUF -

3.6 Leases:

The Companys 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:

3.7 Employee Benefits:

The disclosures required under Accounting Standard 15 "Employee Benefits"(AS 15) as notified by the Companies (Accounting Standards) Rules 2006, are given below:

Defined Contribution Plan

Contribution to Defined Contribution Plan, recognised and charged off for the year are as under:

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.

The estimated 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 and relied upon by the auditors.

3.8. Income Tax

In view of the negative taxable income under normal provisions of Income Tax Act, 1961 during the year, provision for tax has been made at Rs.103.00 Lakhs (Previous Year Rs. 104.00 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.103.00 Lakhs (Previous Year Rs.104.00 Lakhs) for the year ended 31st March, 2010.

3.9. Micro, Small and Medium Enterprises as defined under MSMED Act, 2006 have been identified by the Company on the basis of the information available. Total outstanding dues of Micro and Small enterprises, which are outstanding for more than the stipulated period are given below:

3.10. (a) Miscellaneous Income of Rs. 972.24 Lakhs (Previous year Rs. 351.76 Lakhs) includes Duty Free entitlement credit of Rs. Nil (Previous year Rs.111.57 Lakhs) on capital account and Excess provision for Property Tax for earlier years written back of Rs. 677.91 Lakhs (Previous year Rs. Nil). Insurance claim of Rs. 27.65 Lakhs (Previous Year Rs. 2.24 Lakhs) and Excess Provision and Sundry Credits written back of Rs. 199.65 Lakhs (Previous Year Rs. 203.58 Lakhs)

(b) Other Borrowing Costs of Rs. 153.06 Lakhs (PreviousYear Rs. 136.29 Lakhs) in Schedule ‘N’ include Rs. Nil (Previous Year Rs.136.29 Lakhs) being notional foreign exchange loss of the nature referred to in clause 4 (e) of Accounting Standard 16 - Borrowing Costs (AS-16)as notified by the Companies (Accounting Standards) Rule, 2006.

3.11 Subsidiary Company:

During the year under reference, the Company purchased 57,64,706 equity shares of Rs. 10/- each, fully paid being 49% of the equity share capital of B W Highway Star Private Limited (hereinafter referred to "B W Highway Star Private Limited"or "the subsidiary") from an existing shareholder of that Company making its aggregate holding to 75%. In view thereof, the said Company became the subsidiary of the Company with effect from 21st May, 2009. However, the minority shareholders of B W Highway Star Private Limited disputed the acquisition and initiated Arbitration proceedings. The minority shareholder and the Company resolved their dispute amicably and consent terms were filled before the High Court of Bombay. In terms of the Minutes of the Order by consent dated 10th February, 2010, the acquisition of 49% shares as stated above was accepted as valid. In addition to this the Company also agreed to buy the remaining 25% being 29,41,176 shares of B W Highway Star Private Limited held by minority shareholders for a consideration of Rs. 2400.00 Lakhs, which was agreed to be paid over a period of three years against which the Company has paid Rs. 300.00 Lakhs during the year (Refer Schedule "H"). The Company also issued a Corporate Guarantee to guarantee the due performance / obligations of B W Highway Star Private Limited for repayment of Loan of Rs. 2200.00 Lakhs to the lender and payment of creditors’ dues of Rs. 864.19 Lakhs Mr. Vithal V. Kamat as Executive Chairman and Managing Director and Mr. Vikram V. Kamat as Executive Director of the Company also issued personal guarantees to guarantees the due performance / obligations of the Company and B W Highway Star Private Limited for purchase of shares and due payment of amounts due. B W Highway Star Private Limited also agreed to take over the liability and claims of certain creditors aggregating to Rs. 1928.42 Lakhs and the Company agreed to indemnify the minority shareholder and others against any claim or loss made by these creditors in respect of hotel projects of B W Highway Star Private Limited.

3.12 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:

Note: The Company has received Long Term trade Deposit of Rs. 350.00 Lakhs from the above Company as a security for the hotel property given for development and expansion for a period of Twenty Five years.

a. Payment of remuneration to Mr. Vithal V. Kamat, Executive Chairman & Managing Director, Mr. Vishal V. Kamat, Executive Director, Mr. Ramesh Shanbhag, Whole-time Director was approved by the shareholders of the Company in the Annual General Meeting held on 28th July, 2007. Likewise payment of remuneration to Mr. Vikram V. Kamat, Executive Director was approved by the shareholders in the Annual General Meeting held on 26th September, 2009. However in view of inadequacy of the profits for the year ended 31st March, 2010 and non-fulfillment of the conditions prescribed in Schedule XIII to the Companies Act, 1956, no remuneration is permissible to be paid for the financial year 2009-2010 to these managerial personnel. Accordingly, aggregate remuneration of Rs. 95.88 Lakhs paid by the Company for part of the year has been refunded by these managerial personnel to the Company in accordance with the directions given by the Remuneration Committee in their meeting held on 30th January, 2010.

b. Managerial remuneration excludes provision for gratuity and earned leave, since it is provided on Actuarial Valuation of the Company’s liability to all its employees.

c. The Company has not paid/provided any Commission to any managerial personnel and therefore, the Computation of Net Profit in accordance with Section 198 read with Section 309(5) of the Companies Act, 1956 has not been given.

g) Quantitative Information:

In respect of the Company’s turnover of Food & Beverages, it is not possible to give quantity-wise details of such turnover. The Government of India, Ministry of Finance (Department of Company Affairs) vide their Order No. 46/119/2009-CL-III dated 24th April, 2009 has exempted the Company from giving these particulars in the accounts for the financial year ending March 2009 to March 2011, subject to certain specific disclosures, which have been complied with by the Company.

Get Instant News Updates
Enable
x
Notification Settings X
Time Settings
Done
Clear Notification X
Do you want to clear all the notifications from your inbox?
Settings X