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Notes to Accounts of Sayaji Hotels Ltd.

Mar 31, 2016

(a) Terms/rights attached to equity shares :

1 The company has only one class of equity shares having a par value of Rs.10/- per share. Each Holder of equity shares is entitled to one vote per share. The company declares and pays dividends in Indian rupees. The dividend proposed, if any, by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting. During the year ended 31st March 2016, the amount of per share dividend recognized as distributions to equity shareholders was Rs. Nil (Previous Year Rs.Nil)

*(Share transmission is pending in the name of legal heirs)

As per records of the company, including its register of shareholders/members and other declarations received from shareholders regarding beneficial interest, the above shareholding represents both legal and beneficial ownerships of shares.

(b) Terms/rights attached to preference shares :

2. That during previous year company had issued 10,00,000, 10% Cumulative Redeemable Preference Shares of Rs. 100/- each at a premium of Rs. 50/- each. Out of above, pending 83338 shares were subscribed & paid up during the year under review. (P.Y. 916662 Preference Shares of Rs.100/- each)

3 That above shares are to be redeemed within five years from the date of issue of same.

4 That above Preference share holders are having preference over payment of dividend to equity share holders and accordingly arrears of preference dividends is required to be cleared before payment to Equity Share holders.

As per records of the company, including its register of shareholders/members and other declarations received from shareholders regarding beneficial interest, the above shareholding represents both legal and beneficial ownerships of shares.

5 Secured Term Loan from bank includes term loans outstanding from State Bank of India, Axis Bank Ltd, State Bank of Mysore,

HDFC bank Ltd & ICICI Bank Ltd.

6 Term loans outstanding of State Bank of India are secured by way of mortgage of land & building at Indore, Vadodara & Pune & hypothecation of movables, present & future except stocks of food beverages, operating supplies, stores, spares, book-debts (excluding credit card receivables), bills etc. offered to the bankers for securing the working capital finance. The terms of repayment of all term loans of State Bank of India is on quarterly basis & interest is payable on monthly basis.

7 Term loans outstanding of Axis Bank Ltd include term loans account . Term loan outstanding is secured by way of first charge on Company''s entire fixed assets, present & future, ranking parri passu with other existing term lenders.

The term of repayment is on quarterly basis & interest is payable on monthly basis. These loans were personally guaranteed by Late Shri Sajid Dhanani, Company is in the process for making alternative arrangement for replacement of the personal guarantee.

8 Term loan outstanding of State Bank of Mysore is secured by way of mortgage of land & building at Indore, Vadodara & Pune & hypothecation of movables, present & future, except stocks of food beverages, operating supplies, stores, spares, book-debts (excluding credit card receivables), bills etc. The term of repayment of the term loan is on quarterly basis & the interest is payable on monthly basis. These loans were personally guaranteed by Late Shri Sajid Dhanani, Company is in the process for making alternative arrangement for replacement of the personal guarantee.

9 Term loan outstanding of ICICI Bank Ltd. is secured by way of mortgage of land & building at Indore, Vadodara & Pune & hypothecation of movables, present & future, except stocks of food beverages, operating supplies, stores, spares, book-debts (excluding credit card receivables), bills etc. The term of repayment of the term loan is on quarterly basis & the interest is payable on monthly basis. Further secured by pledge of 30.00 Lacs Equity Shares of Company held by Promoters. However they said term loan was repaid in the Month of April,2016.

10 Vehicle loans outstanding from HDFC Bank and ICICI Bank is secured by way of hypothecation of the specific vehicles financed by bank.

11 Secured term loans from Financial Institutions includes term loan outstanding of Tourism Finance Corporation of India

Ltd(TFCIL).

12 Term loan outstanding from TFCIL is secured on pari-passu basis by way of mortgage of land & building at Indore, Pune & Vadodara & hypothecation of the movables, present & future, except stocks of food beverages, operating supplies, stores, spares, book-debts (excluding credit card receivables), bills etc & by way of pledge of shares belonging to promoters. Mortgage of lease hold right of Amber Garden, Indore along with building Structure thereon and first charge by way of hypothecation of movables of Bhopal Club project.

The term of repayment of the term loan is on quarterly basis & the interest is payable on monthly basis, This loan is personally guaranteed by Smt Suchitra Dhanani.

13. Term loan outstanding from MPFC in previous year was secured by way of mortgage of land & building at Indore & hypothecation of the movables, present & future, except stocks of food beverages, operating supplies, stores, spares, book-debts (excluding credit card receivables), bills etc bankers for securing the working capital finance. The term of repayment was on quarterly basis & interest was payable on monthly basis. However, same was repaid during the year under review.

14. Loan outstanding from Magma Fincorp Limited is unsecured loan. Repayment is being made on EMI basis. Post dated cheques has been given for all installments.

*Payable towards cancellation of agreement for land at Indore hotel. This amount is now payable within 7 years. Interest @ 9% p.a is payable on the outstanding amount.

15. Provision for employee benefits includes provision of Gratuity & leave encashment payable after 12 month.

16. The Company makes annual contributions to the Employee''s Group Gratuity scheme of the SBI Life Insurance Co. Ltd., a funded defined benefit plan for the qualifying employees. The scheme provides for lump sum payment to vested employees at retirement, death while in employment or on termination of employment as per the terms of the scheme. Vesting occurs upon completion of five years of service.

17. The present value of the defined benefit obligation and current service cost were measured using the Projected Unit Credit Method, with actuarial valuations being carried out at each balance sheet date. The following table sets out the status of the funded gratuity plan and the amounts recognized in the company''s financial statements as at March 31, 2016:-

18. Working capital facilities include Cash Credit Facilities from State Bank of India outstanding Rs. 411.07 lacs (Previous Year Rs. 381.65 lacs) & Axis Bank outstanding Rs.79.60 lacs (Previous Year Rs. 27.67 Lacs), both of which are secured by first charge by way of hypothecation of stocks of food, beverages, operating supplies, stores, spares, book-debts (excluding credit card receivables), bills etc. of the company and also by way of a second charge on the immovable properties of the company at Indore, Baroda and Pune. Cash Credit Facilities from Axis bank Ltd were personally guaranteed by Late Shri Sajid Dhanani, Company is in the process for making alternative arrangement for replacement of the personal guarantee.

19. Loans from related parties & others includes loan from directors & associate companies.

*Trade payables are for goods purchased and services taken during the normal course of business.

20. The Company has not received information from vendors regarding their status under the Micro, Small & Medium Enterprises Development Act, 2006 and hence disclosure relating to amount unpaid at the yearend together with interest paid/payable under the Act have not been given.

21. Trade Payable having scheduled payment beyond 12 months after reporting date Rs. Nil (Previous Year Rs. Nil)

22 Includes amount payable to Barbeque Nation Hospitality Limited, against Royalty Payment Rs. 42.79 Lacs (Previous Year

Additional Disclosures

23. Contingent liability not provided for :

24. Guarantee given on behalf of other companies Rs 6873.60 lacs (P.Y Rs 6873.60 lacs). This includes Guarantee given to State Bank of India on Behalf of Barbeque-Nation Hospitality Ltd amounting Rs 4,000 lacs (P.Y 4000 lacs), guarantee given to Axis Bank Ltd on Behalf of Sana Hospitality Services Pvt .Ltd amounting to Rs 421.82 lacs (P.Y Rs 421.82 lacs), guarantee given to State bank of India on Behalf of Malwa Hospitality Pvt .Ltd amounting to Rs. 2400 lacs (P.Y. 2400 lacs) & HDFC Bank Ltd RS.51.78 lacs(P.Y. 51.78 lacs) Outstanding balance of loan there against for the year ended 31st March, 2016 from SBI is Rs 4177.51 lacs (P.Y 4767.09 Lacs) ,Axis Bank Ltd is Rs 167.86 Lacs (P.Y 212.51 Lacs) and from HDFC bank Ltd. RS 33.31 lacs (P.Y. 45.08 lacs)

25. Disputed statutory liabilities in respect of service tax not provided for:

(a) In Respect of indore hotel, for the period from 01.03.05 to 31.03.09 the Hon''ble Tribunal has passed the order against the Company after giving the benefit of abatement and waiver of penalty imposed in the order passed by Learned Commissioner. Tax demand of Rs 175.01 lacs is pending as per the Tribunal''s order Company has challenged said order before Indore bench of Hon''ble High Court of MP and got interim stay of the demand. Interest liability will also arise in case of unfavorable decision. (P.Y. Rs.175.01 Lacs)

(b) In Respect of indore hotel, for the period from 01.04.09 to 31.03.11 the Commissioner has passed the order against the Company without even considering the benefit given by the Hon''ble Tribunal in its prior order. Tax demand of Rs. 400.37 lacs has been raised alongwith equal amount of penalty. Company has challenged said order before Hon''ble Tribunal & got unconditional stay on merits for the entire demand Had the benefit of abatement & waiver of penalty given by the Hon''ble Tribunal in its prior order been considered by the Learned Commissioner, the demand would have been reduced to Rs. 139.97 lacs. Interest liability will also arise in case of unfavorable decision. (P.Y. Rs. 400.37 Lacs)

(c) In Respect of Indore hotel for the period from 01.04.11 to 30.06.12 the Commissioner has issued show cause against the Company without even considering the benefit given by the Hon''ble Tribunal in their prior order. Tax demand of Rs 269.27 lacs has been raised alongwith equal amount of penalty Company has challenged said order before Hon''ble Tribunal. Had the benefit of abatement & waiver by of penalty given the Hon''ble Tribunal in their prior order been considered by the Learned Commissioner, the demand would have been reduced to Rs. 127.98 lacs. Interest liability will also arise in case of unfavorable decision. (P.Y. Rs.269.27 lacs)

(d) In Respect of Pune hotel for the period from 01.04.09 to 30.06.12 Commissioner has passed an order against the company and raised a tax demand of Rs.39.27 lacs, company has filed an appeal before commissioner (Appeal), which is yet to be decided. Interest liability will also arise in case of unfavorable decision. (P.Y. Rs. 39.27 Lacs)

26. Custom duties saved against imports under EPCG scheme is Rs 504.23 lacs (P.Y Rs 594.13 lacs)

27 Disputed liability of Rs 131.30 lacs not provided for in respect of Income Tax (AY 2007-08, AY 2008-09, AY 2009-10 , AY 2010-11, AY 2012-13). The matters are pending before Income tax Appellate Tribunal, Ahmadabad. (P.Y Rs. 131.30 lacs). And Amount paid there against Rs. 131.30 Lacs.

28 Disputed liability of Rs 1.02 lacs not provided for in respect of TDS (AY 2010-11, AY 2011-12 & AY 2012-13). The matter is pending before CIT, Pune. (P.Y. Rs. 1.02 lacs)

29.. Disputed liability of Rs 83.55 lacs not provided for in respect of Commercial tax (FY 2011-12 & 2012-13). The matters are pending before Commissioner -Appeal Commercial tax ,Indore. (P.Y. Rs. 83.55 Lacs)

30 Disputed liability of Rs .56 lacs not provided for in respect of Commercial tax (FY2010-11). The matter is pending before Appelate Tribunal- Commercial tax ,Indore. (P.Y. Rs. 0.56 Lacs)

31 Disputed liability of Rs 32.70 lacs not provided for in respect penalty of Property tax demand (FY2015-16). The application is pending before Mayor-In-Council Indore Municipal Corporation Indore. (P.Y. Rs. Nil)

32.rears of Cumulative Dividend on Preference Shares & Income Tax Thereon, not paid during the year Rs.118.42 Lacs (P.Y. Rs.27.53).

33. respect of the leasehold land of Indore hotel, Company has received notice on 05.03.2016 from the Lessor

i.e. Indore Development Authority (IDA) for cancellation of the lease for the entire land. It is to inform that company has constructed few shops in their Indore hotel and the same shops has been sold to various parties. IDA has raised an objection that the said activity is not permissible under the terms of lease agreement and has issued show cause notice as to why the lease may not be cancelled. Company is duly representing the matter before IDA on various grounds and is hopeful that the matter will be resolved. As an abundant precaution, company has also started the process of purchasing the shops back and five shops have been purchased till 31.03.2016. In similar other matter, IDA has accepted the rectification through repurchase of property and hence company expects the same view in this matter also.

34. Capital Commitments

Estimated capital commitments not provided for Rs. Nil (PY 81.23 lacs )

35 The Company has not received information from vendors regarding their status under the Micro, Small & Medium Enterprises Development Act, 2006 and accordingly disclosure regarding two amount paid/Payable at the yearend together with interest paid/payable under the Act have not been given.

36. Segment Reporting:

The Company''s only business being hoteliering, disclosure of segment-wise information is not applicable under Accounting Standard 17 - ‘Segmental Information'' (AS-17) notified by the Companies (Accounting Standards) Rules, 2006 (as amended). There is no geographical segment to be reported since all the operations are undertaken in India.

37. Impairment of Assets :

That the Board of Directors, is of the opinion that the discounted net future generation from the Assets in use & shown in the schedule of Fixed Assets, is more than the carrying amount of Fixed Assets in Balance Sheet, as such, no provision for Impairment of Assets is required to be made in terms of the requirement of Accounting Standard (AS-28) “Impairment of Assets” issued by the Institute of Chartered Accountants of India for the year ended 31st March''2016.

38.In the opinion of the Directors, value of long term trade investment in shares of subsidiary companies & others have the value at which they are stated in the Balance Sheet, further to informed that investment made is in the nature of trade investment. in vIew of above no provision is required to made for any temporarily in the value of investment.

39. In the opinion of the Directors, Current Assets, Loans & Advances have the value at which they are stated in the Balance Sheet, if realized in the ordinary course of business. Further, Directors are of the opinion that all the liabilities have been duly reflected in the Balance Sheet and nothing is remained to be disclosed for. Confirmation letters to all Sundry Debtors & Creditors have been sent and those parties whose reply have been received are reconciled and confirmed.

39. In the opinion of Board of Directors there exists adequate accounting & internal control system designed to prevent and detect fraud or errors and in the opinion of Board of Directors that any uncorrected misstatements resulting from either fraud or errors are in the managements opinion immaterial both individually & aggregate in the Financial statements.

40. Details of Related Party Disclosure:

i) Key Management Personnel

Mr.Raoof Razak Dhanani (Managing Director)

Mrs. Suchitra Sajid Dhanani (Whole Time Director)

Mr. Kayum Dhanani (Director)

Mr. Sandesh Khandelwal (Chief Financial Officer)

Mr. Amit Sarraf (Company Secretary)

ii) Subsidiary Companies Aries Hotels Pvt Ltd Malwa Hospitality Pvt Ltd

Sayaji House Keeping Services Ltd

iii) Associate Companies/ Firms/ Relatives

S S Management

S.N. Travels

Taurus Corium Impex Pvt Ltd. Barbeque-Nation Hospitality Limited Winner Hotels Pvt Ltd.

Trans Agro India Pvt Ltd.

A.R. Hospitality Pvt .Ltd.

Tungabhadra Furtilizer & Chemical Ltd.

Zuber Y Dhanani

Azher Y Dhanani

Saba R Dhanani

Sadiya R Dhanani

Sara K Dhanani

Sanya S Dhanani

Rizwan R Sheikh

Versha Khandelwal

As of 31st March, 2016 and 31st March, 2015, there were no net foreign currency exposures that were not hedged by a derivative instruments or otherwise.

41.e company has reclassified previous year figures to confirm to this year classification.


Mar 31, 2015

1. Contingent liability not provided for :

1.1. Guarantee given on behalf of other companies Rs 6873.60 lacs (P.Y Rs 4421.82 lacs). This includes Guarantee given to State Bank of India on Behalf of Barbeque-Nation Hospitality Ltd amounting Rs 4,000 lacs (P.Y 4000.00 lacs), guarantee given to Axis Bank Ltd on Behalf of Sana Hospitality Services Pvt .Ltd amounting to Rs 421.82 lacs (P.Y Rs 421.82 lacs), guarantee given to State bank of India on Behalf of Malwa Hospitality Pvt .Ltd amounting to Rs.2400 lacs (P.Y. Nil) & HDFC Bank Ltd Rs.51.78 lacs Outstanding balance of loan there against for the year ended 31st March, 2015 from SBI is Rs 4764.09 lacs (P.Y 3501.90 Lacs) ,Axis Bank Ltd is Rs 212.51 Lacs (P.Y 250.19 Lacs) and from HDFC bank Ltd. RS 45.08 lacs (P.Y. Nil)

2. Disputed statutory liabilities in respect of service tax not provided for:

(a) In Respect of indore hotel, for the period from 01.03.05 to 31.03.09 the Hon'ble Tribunal has passed the order against the Company after giving the benefit of abatement and waiver of penalty imposed in the order passed by Learned Commissioner.Tax demand of Rs 175.01 lacs is pending as per the Tribunal's order Company has challenged said order before Indore bench of Hon'ble High Court of MP and got interim stay of the demand. Interest liability will also arise in case of unfavorable decision. (P.Y. Rs.175.01 Lacs)

(b) In Respect of indore hotel, for the period from 01.04.09 to 31.03.11 the Commissioner has passed the order against the Company without even considering the benefit given by the Hon'ble Tribunal in their prior order. Tax demand of Rs. 400.37 lacs has been raised alongwith equal amount of penalty. Company has challenged said order before Hon'ble Tribunal & got unconditional stay on merits for the entire demand Had the benefit of abatement & waiver of penalty given by the Hon'ble Tribunal in their prior order been considered by the Learned Commissioner, the demand would have been reduced to Rs. 139.97 lacs. Interest liability will also arise in case of unfavorable decision. (P.Y. Rs. 400.37 Lacs)

(c) In Respect of indore hotel for the period from 01.04.11 to 30.06.12 the Commissioner has issued show cause against the Company without even considering the benefit given by the Hon'ble Tribunal in their prior order. Tax demand of Rs 269.27 lacs has been raised alongwith equal amount of penalty Company has challenged said order before Hon'ble Tribunal. Had the benefit of abatement & waiver by of penalty given to the Hon'ble Tribunal in their prior order been considered by the Learned Commissioner, the demand would have been reduced to Rs. 127.98 lacs. Interest liability will also arise in case of unfavorable decision. (P.Y. Rs.269.27 lacs)

(d) In Respect of Pune hotel for the period from 01.04.09 to 30.06.12 Commissioner has passed an order against the company and raised a tax demand of Rs.39.27 lacs, company has filed an appeal before commissioner (Appeal), which is yet to be decided. Interest liability will also arise in case of unfavorable decision. (P.Y. Rs. Nil)

3. Custom duties saved against imports under EPCG scheme is Rs 594.13 lacs (P.Y Rs 594.13 lacs)

4. Disputed liability of Rs 131.30 lacs not provided for in respect of Income Tax (AY 2007-08, AY 2008-09, AY 2009-10 , AY 2010-11, AY 2012-13). The matters are pending before Income tax Appellate Tribunal, Ahemdabad. (P.Y Rs. 131.30 lacs)

5. Disputed liability of Rs 1.02 lacs not provided for in respect of TDS (AY 2010-11, AY 2011-12 & AY 2012-13). The matter is pending before CIT, Pune. (P.Y. Rs. 1.02 lacs)

6. Disputed liability of Rs 83.55 lacs not provided for in respect of Commercial tax (FY 2011-12 & 2012-13). The matters are pending before Commissioner -Appeal Commercial tax ,Indore. (P.Y. Rs. Nil)

7. Disputed liability of Rs .56 lacs not provided for in respect of Commercial tax (FY2010-11). The matter is pending before Appelate Tribunal- Commercial tax ,Indore. (P.Y. Rs. Nil)

8. Capital Commitments

Estimated capital commitments not provided for Rs.81.23 Lacs (PY 15.92 lacs )

9. The Company has not received information from vendors regarding their status under the Micro, Small & Medium Enterprises Development Act, 2006 and accordingly disclosure regarding to amount paid/Payable at the year end together with interest paid/payable under the Act have not been given.

10. Segment Reporting:

The Company's only business being hoteliering, disclosure of segment-wise information is not applicable under Accounting Standard 17 - 'Segmental Information' (AS-17) notified by the Companies (Accounting Standards) Rules, 2006 (as amended). There is no geographical segment to be reported since all the operations are undertaken in India.

11. Impairment of Assets :

That the Board of Directors, is of the opinion that the discounted net future generation from the Assets in use & shown in the schedule of Fixed Assets, is more than the carrying amount of Fixed Assets in Balance Sheet, as such, no provision for Impairment of Assets is required to be made in terms of the requirement of Accounting Standard (AS–28) "Impairment of Assets" issued by the Institute of Chartered Accountants of India for the year ended 31st March'2015.

12. In the opinion of the Directors, value of long term trade investment in shares of subsidiary companies & others have the value at which they are stated in the Balance Sheet. Further investment made is in the nature of trade investment. in vIew of above no provision is required to be made for any temporary in the value of investment define.

13. In the opinion of the Directors, Current Assets, Loans & Advances have the value at which they are stated in the Balance Sheet, if realized in the ordinary course of business. Further, Directors are of the opinion that all the liabilities have been duly reflected in the Balance Sheet and nothing is remained to be disclosed for. Sundry Debtors, Creditors and Advances are subject to reconciliation and confirmation.

14. In the opinion of Board of Directors there exists adequate accounting & internal control system designed to prevent and detect fraud or errors and in the opinion of Board of Directors that any uncorrected misstatements resulting from either fraud or errors are in the managements opinion immaterial both individually & aggregate in the Financial statements.

15. Details of Related Party Disclosure:

i) Key Management Personnel

Mr.Raoof Razak Dhanani (Director)

Mr. Kayum Dhanani (Director)

Mrs. Suchitra Sajid Dhanani, Whole Time Director

Mr. Sandesh Khandelwal (Chief financial officer )

Mr. Amit Sarraf (Company Secretary )

ii) Subsidiary Companies

Aries Hotels Pvt. Ltd.

Malwa Hospitality Pvt. Ltd.

iii) Entity in which company /KMP / Relatives of KMP can exercise significant influence

S S Management

S.N. Travels

Taurus Corium Impex Pvt. Ltd.

Barbeque-Nation Hospitality Limited

Genex Hotels Pvt. Ltd.

Winner Hotels Pvt. Ltd.

Trans Agro India Pvt. Ltd.

A.R. Hospitality Pvt. Ltd.

Tungabhadra Furtilizer & Chemical Ltd.

Zuber Y Dhanani

Azher Y Dhanani

Saba R Dhanani

Sadiya R Dhanani

Sara K Dhanani

Sanya S Dhanani

Rizwan R Sheikh

16. The company has reclassified previous year figures to conform to this year' classification.


Mar 31, 2014

Sayaji Hotels Limited ("SHL" or the "Company"), is a listed public limited company incorporated under the provisions of the Companies Act, 1956. Its shares are listed on Bombay stock exchange, Vadodara stock exchange, Madhya Pradesh stock exchange & Ahmedabad stock exchange on India. The Company is primarily engaged in the business of owning, operating & managing hotels.

Additional Disclosures

1.1 Contingentliability not provided for:

1.1.1. Guarantee given on behalf of other companies Rs 4421.82 lacs (PY Rs 5871.82 lacs). This includes Guarantee given to State Bank of India on Behalf of Barbeque-Nation Hospitality Ltd amounting Rs 4,000 lacs (P.Y 5,450 lacs) & guarantee given to Axis Bank Ltd on Behalf of Sana Hospitality Services Pvt .Ltd amounting to Rs 421.82 lacs (PY Rs 421.82 lacs). Outstanding balance of loan there against for the year ended 31st March, 2014 from SBI is Rs 3501.90 lacs (PY 4073.12 Lacs) and from Axis Bank Ltd is Rs 250.19 lacs (PY 282.84 Lacs)

1.1.2. Disputed statutory liabilities in respect of service tax not provided for:

(a) For the period from 01.03.05 to 31.03.09 the Hon''ble Tribunal has passed the order against the Company after giving the benefit of abatement and waiver of penalty imposed in the order passed by Learned Commissioner.Tax demand of Rs 175.01 lacs is pending as per the Tribunal''s order.Company has challenged said order before Indore bench of Hon''ble High Court of MP and got interim stay of the demand. Interest liability will also arise in case of unfavorable decision.

(b) For the period from 01.04.09 to 31.03.11 the Commissioner has passed the order against the Company without even considering the benefit given by the Hon''ble Tribunal in their prior order. Tax demand of Rs 400.37 lacs has been raised alongwith equal amount of penalty. Company has challenged said order before Hon''ble Tribunal & got unconditional stay on merits for the entire demand. Had the benefit of abatement & waiver of penalty given by the Hon''ble Tribunal in their prior order been considered by the Learned Commissioner, the demand would have been reduced to Rs. 139.97 lacs. Interest liability will also arise in case of unfavorable decision.

(c) For the period from 01.04.11 to 30.06.12 the Commissioner has issued show cause against the Company without even considering the benefit given by the Hon''ble Tribunal in their prior order. Tax demand of Rs 269.27 lacs has been raised alongwith equal amount of penalty. Company has challenged said order before Hon''ble Tribunal. Had the benefit of abatement & waiver of penalty given by the Hon''ble Tribunal in their prior order been considered by the Learned Commissioner, the demand would have been reduced to Rs. 127.98 lacs. Interest liability will also arise in case of unfavorable decision.

1.1.3. Custom duties saved against imports under EPCG scheme is Rs 594.13 lacs (PY Rs 607.84 lacs)

1.1.4. Disputed liability of Rs 131.30 lacs (PY Rs. 131.30 lacs) not provided for in respect of Income Tax (AY 2007-08, AY 2008-09, AY 2009-10 & AY 2010-11). The matters are pending before Income tax Appellate Tribunal, Ahemdabad.

1.1.5. Disputed liability of Rs 1.02 lacs not provided for in respect of TDS (AY 2010-11, AY 2011-12 & AY 2012-13). The matter is pending before CIT,Pune.

1.1.6. Disputed liability of Rs 0.70 lacs not provided for in respect of Labour case (FY 2006-07). The matter is pending before Labour Court, Indore

1.1.7. Disputed liability of Rs 1.12 lacs not provided for in respect of Labour case (FY 2012-13). The matter is pending before Labour Court, Baroda.

1.2 Capital Commitments

Estimated capital commitments not provided for Rs. 15.92 Lacs (PY Nil)

1.3 The Company has not received information from vendors regarding their status under the Micro, Small & Medium Enterprises Development Act, 2006 and accordingly disclosure regarding to amount paid/Payable at the year end together with interest paid/payable under the Act have not been given.

1.4 Segment Reporting:

The Company''s only business being hoteliering, disclosure of segment-wise information is not applicable under Accounting Standard 17 - ''Segmental Information'' (AS-17) notified by the Companies (Accounting Standards) Rules, 2006 (as amended). There is no geographical segment to be reported since all the operations are undertaken in India.

1.5 Impairmentof Assets:

That the Board of Directors, is of the opinion that the discounted net future generation from the Assets in use & shown in the schedule of Fixed Assets, is more than the carrying amount of Fixed Assets in Balance Sheet, as such, no provision for Impairment of Assets is required to be made in terms of the requirement of Accounting Standard (AS-28) "Impairment of Assets" issued bythe Institute of Chartered Accountants of India for the year ended 31st March''2014.

1.6 In the opinion of the Directors, value of long term trade investment in shares of subsidiary companies & others have the value at which they are stated in the Balance Sheet, further to informed that investment made is in the nature of trade investment. in vIew ofabove no provision is required to made for any temporarily in the value of investment.

1.7 In the opinion of the Directors, Current Assets, Loans & Advances have the value at which they are stated in the Balance Sheet, if realized in the ordinary course of business. Further, Directors are of the opinion that all the liabilities have been duly reflected in the Balance Sheet and nothing is remained to be disclosed for. Sundry Debtors, Creditors and Advances are subject to reconciliation and confirmation.

1.8 In the opinion of Board of Directors there exists adequate accounting & internal control system designed to prevent and detect fraud or errors and in the opinion of Board of Directors that any uncorrected misstatements resulting from either fraud or errors are in the managements opinion immaterial both individually & aggregate in the Financial statements.

1.9 Details of Related Party Disclosure:

i) Key Management Personnel

Mrs. Suichitra Sajid Dhanani, Whole Time Director (From Feb-2014)

Late Mr. Sajid R. Dhanani (Upto Nov-2012)

Munawar F Garbadwala (Upto Aug-2012)

Jaykannan Perumal Swamy (Upto June-2013)

ii) Subsidiary Companies Aries Hotels Pvt Ltd Barbeque-Nation Hospitality Limited Malwa Hospitality Pvt Ltd

iii) Associate Companies/ Firms/ Relatives S S Management

S.N. Travels

Taurus Corium Impex Pvt Ltd Winner Hotels Pvt Ltd

1.10 The company has reclassified previous year figures to conform to this year'' classification.


Mar 31, 2013

1.1 Secured Term Loan from bank includes term loans outstanding from State Bank of India, Axis Bank Ltd, State Bank of Mysore & HDFC bank ltd.

1.1.1 Term loans outstanding of State Bank of India are secured by way of mortgage of land & building at Indore, Vadodara & Pune & hypothecation of movables, present & future except stocks of all kinds including operation supplies & spares offered to the bankers for securing the working capital finance. The terms of repayment of all term loans of State Bank of India is quarterly & interest is paid on monthly basis. These loans were personally guaranteed by Late Shri Sajid Dhanani, Company is in the process for making alternative arrangement for replacement of the personal guarantee.

1.1.2 Term loans outstanding of Axis Bank Ltd include term loans account & vehicle loans account. Term loan outstanding is secured by way of hypothecation of movable, present & future, except stocks of all kinds including operating Supplies, stores & spares offered to the bankers for securing the working capital finance. The other term loan outstanding is secured by first charge by way of hypothecation of stocks of food, beverages, operating supplies, spares & book-debts, bills etc. of the company & also by way of second charge on the immovable properties of the company at Indore & Vadodara & also by way of pledge of shares belonging to promoters. The term of repayment of both the term loan is quarterly & interest is paid on monthly basis. These loans were personally guranteed by Late shri Sajid dhanani, Company is in the process for making alternative arrangement for replacement of the personal guarantee. Vehicle loans outstanding are secured by way of hypothecation charge on the specific vehicles.

1.1.3 Term loan outstanding of State Bank of Mysore is secured by way of mortgage of land & building at Indore, Vadodara & Pune & hypothecation of movables, present & future, except stocks of all kinds including operation supplies & spares offered to the Bankers for securing the working capital finance. The term of repayment of the term loan is quarterly &the interest is paid on monthly basis. These loans were personally guranteed by Late Shri Sajid Dhanani, Company is in the process for making alternative arrangement for replacement of the personal guarantee.

1.1.4 Vehicle loans outstanding from HDFC Bank is secured by way of hypothecation charge on the specific vehicles.

1.2 Secured term loans from Financial Institutions includes term loan outstanding of Tourism Finance Corporation of Indian ltd(TFCI), Madhya Pradesh Finance Corporation (MPFC), & HUDCO.

1.2.1 Term loans outstanding TFCI includes two term loan, one of which is secured on pari-passu basis by way of mortgage of land & building at Indore, Pune & Vadodara & hypothecation of the movables, present & future, excepts stocks of all kinds including operating supplies, stores, & spares offered to the bankers for securing the working capital loans & also by way of pledge of shares belonging to promoters. The term of repayment is monthly. The other term loan is secured by way of mortgage of land mortgage of land & building at Indore, Pune & Vadodara & hypothecation of the movables, present & future, excepts stocks of all kinds including operating supplies, stores, & spares offered to the bankers for securing the working capital loans & also by way of pledge of shares belonging to promoters. The term of repayment is quarterly & interest is paid on monthly basis. These loans were personally guranteed by Late Shri Sajid Dhanani, Company is in the process for making alternative arrangement for replacement of the personal guarantee.

1.2.2 Term loans outstanding from MPFC are secured by way of mortgage of land & building at Indore & hypothecation of the movables, present & future, excepts stocks of all kinds including operating supplies, stores, & spares offered to the bankers for securing the working capital finance. The term of repayment is quarterly & interest is paid on monthly basis. These loans were personally guranteed by Late Shri Sajid Dhanani, Company is in the process for making alternative arrangement for replacement of the personal guarantee.

1.2.3 Term loan outstanding from HUDCO is secured on pari-passu basis by way of mortgage of land & building at Indore, Pune & Vadodara & hypothecation of the movables, present & future, except stocks of all kinds including operating supplies, stores, & spares offered to the Bankers for securing the working capital form. The term of repayment is quarterly & interest is also paid on quarterly basis. These loans were personally guranteed by Late Shri Sajid Dhanani. Company is in the process for making alternative arrangement for replacement of the personal guarantee.

* Deferred tax liability for the year have been arrived at by taking the tax rate of 32.445% (PY 32.445% ) which is inclusive of surcharge and education cess.

* Other long term liability of Rs 2,000 lacs includes amount payable towards repurchase of land at Indore hotel. This amount is payable within 10 years. Interest @ 9% p.a is payable on the outstanding amount.

2.1 Provision for employee benefits includes provision of Gratuity, Bonus & leave encashment.

2.2 The Company makes annual contributions to the Employee''s Group Gratuity scheme of the SBI Life Insurance Co. Ltd., a funded defined benefit plan for the qualifying employees. The scheme provides for lump sum payment to vested employees at retirement, death while in employment or on termination of employment as per the terms of the scheme. Vesting occurs upon completion of five years of service.

2.2.1 The present value of the defined benefit obligation and current service cost were measured using the Projected Unit Credit Method, with actuarial valuations being carried out at each balance sheet date. The following table sets out the status of the funded gratuity plan and the amounts recognized in the company''s financial statements as at March 31, 2013:-

3.1 Working capital facilities include Cash Credit Facilities from State Bank of India outstanding Rs 517.51 lacs & Axis Bank outstanding Rs 173.37 lacs both of which are secured by first charge by way of hypothecation of stocks of food, beverages, operating supplies, stores, spares, book-debts (excluding credit card receivables), bills etc. of the company and also by way of a second charge on the immovable properties of the company at Indore, Vadodara and Pune. These working capital facilities were personally guranteed by Late Shri Sajid Dhanani, Company is in the process for making alternative arrangement for replacement of the personal guarantee.

3.2 Fixed deposits from Public has maturity period of 12 months and interest is payable @ 10% pa compounded monthly.

3.3 Loans from related parties & others includes loan from directors , associates and friends & relatives of directors.

*Trade payables are for goods purchased and services taken during the normal course of business.

4.1 Current maturities of term loans from bank includes Principal instalments payable to State Bank of India, Axis Bank Ltd, State Bank of Mysore and to HDFC. Bank wise Current maturity is give under Note no 4.1. Other terms are same as given in Note no 4.2.

4.2 Current maturities of term loans from financial institutions includes Principal instalments payable to Tourism Finance Corporation of India ltd, Madhya Pradesh Finance Corporation and HUDCO. Financial Institution wise current maturities is given under Note no 4.1 Other terms are same as given in note no 4.3.

4.3 Current maturities of term loan from NBFC is of Magma Fincorp Limited. Other terms are same as given in note no 4.5

4.4 Statutory dues includes VAT, luxury tax, TDS, service tax & other statutory payables.

4.5 Other Current liabilities includes rent payable , interest payable , project payable and staff dues.

4.6 Unpaid matured deposits and interest accrued thereon includes deposits which are matured but not claimed by them.

5.1 Barbeque Nation Hospitality ltd(BNHL) is subsidiary of the company with 67.59% shareholding as on 31/03/13.On 12/04/13 company has sold 415000 shares at Rs 334.54 per share to Tamara Private Limited thereby shareholding reduced to 54.70%. On the basis of this independent sale transaction, Estimated Fair value of remaining investment is Rs. 20240 Lacs. BNHL operates chain of restaurant in different cities of India and presently running 35 restaurants.

5.2 Malwa Hospitality Pvt ltd is 100% subsidiary of the company. Business hotel of 186 rooms at Indore was planned however company has decided to stop the project. Investment cost is expected to be realised during the next financial year.

5.3 Company holds 5% of total shareholding in Aries Hotels Pvt. Ltd.

5.4 Genex Hotels Pvt. Ltd. is joint venture company for Bhopal project of the company.

5.5 Winner Hotels Pvt. Ltd is a joint venture company formed for the purpose of Bhopal Hotel.

5.6 Provision for Diminution on Shares value of Bharat Equity Services Ltd has been made. Estimated market value of share is 0.10 paise per share.

*Security Deposits includes balances with statutory Authority , electricity deposits , lease rent deposits & guest house deposits.

*Taxes receivable includes TDS receivable , MAT Credit entitlement , Advance Tax , Service Tax Credit & Input Tax rebate net off of provisions of taxes

*includes crockery & cutlery, linen, consumables, party and function expenses etc.

6.1 Contingent liability not provided for :

6.1.1. Claim against the company not acknowledged as debt Rs 5.06 lacs (P.Y Rs 5.06 lacs).

6.1.2. Guarantee given on behalf of other companies Rs 5871.82 lacs (P.Y Rs 8821.82 lacs). This includes Guarantee given to State Bank of India on Behalf of Barbeque-Nation Hospitality Ltd amounting Rs 5,450 lacs (P.Y 8400 lacs) & guarantee given to Axis Bank Ltd on Behalf of Sana Hospitality Services Pvt .Ltd amounting to Rs 421.82 lacs (P.Y Rs 421.82 lacs). Outstanding balance of loan from SBI as at 31/03/13 is Rs 4073.12 lacs and from Axis Bank Ltd is Rs 282.84 lacs

6.1.3. Disputed statutory liabilities in respect of service tax not provided for:

(a) For the period from 01.03.05 to 31.03.09 the Hon''ble Tribunal has passed the order against the Company after giving the benefit of abatement and waiver of penalty imposed in the order passed by Learned Commissioner. Tax demand of Rs 175.01 lacs is pending as per the Tribunal''s order. Company has challenged said order before Indore bench of Hon''ble High Court of MP and got interim stay of the demand. Interest liability will also arise in case of unfavorable decision.

(b) For the period from 01.04.09to31.03.11 the Commissioner has passed the order against the Company without even considering the benefit given by the Hon''ble Tribunal in their prior order. Tax demand of Rs 400.37 lacs has been raised alongwith equal amount of penalty. Company has challenged said order before Hon''ble Tribunal & got unconditional stay on merits for the entire demand. Had the benefit of abatement & waiver of penalty given by the Hon''ble Tribunal in their prior order been considered by the Learned Commissioner, the demand would have been reduced to Rs. 139.97 lacs. Interest liability will also arise in case of unfavorable decision.

(c) For the period from 01.04.11 to 30.06.12 the Commissioner has issued show cause against the Company with a tax amount of Rs. 269.27 lakhs and equal amount of penalty. The Show Cause is pending before the Commissioner for adjudication. While issuing the show cause the Commissioner has not considered the earlier order of Tribunal passed in similar matter of the company. Had the benefit of earlier order been considered by the Learned Commissioner, the tax amount in the show cause would have been reduced to Rs. 127.98 lacs.

6.1.4. Custom duties saved against imports under EPCG scheme is Rs 607.84 lacs (P.Y Rs 875.51 lacs)

6.1.5. Disputed liability of Rs 131.30 lacs (P.Y. Rs. 107.65 lacs) not provided for in respect of Income Tax. The matters are pending before Income -tax Appellate Tribunal, Ahmedabad. Company has paid Rs 99.25 lacs against the above amount.

6.1.6. Disputed liability of Rs 1.02lacs not provided for in respect of TDS. The matter is pending before CIT, Pune.

6.1.7. Disputed liability of Rs 4.38 lacs not provided for in respect of Labour case. The matter is pending before Labour Court, Indore.

6.1.8. Disputed liability of Rs 1.12 lacs not provided for in respect of Labour case. The matter is pending before Labour Court, Vadodara.

6.2 Based on the information available with the company, there are no dues to micro and small enterprises under the Micro, Small and Medium Enterprises Development Act.

6.3 During the year company has sold assets & intangible rights of 5 Barbeque restaurants to it''s Subsidiary Barbeque Nation Hospitality ltd in Rs. 2810 Lacs. Profit of Rs 2099.48 lacs is credited to Profit & Loss Account under Exceptional and Extra Ordinary items & Gross block of assets is credited by Rs 710.52 Lacs.

6.4 During the year under review, the method of depreciation in respect of fixed assets of the company have been changed from Straight Line Method to Written Down Value Method for better representation of the financial statements. In compliance with Accounting Standard (AS 6) issued by the Institute of Chartered Accountants of India, depreciation has been recomputed from the date of commissioning of the fixed assets at the WDV rates applicable to those years on such fixed assets. As a result of this change, there is additional charge of depreciation during the year of Rs 4353.28 lacs (up to 31st March 2012) relating to earlier years, which is debited to Profit & Loss Account under Exceptional and Extra Ordinary items.

Had there been no change in the method of depreciation, the charge for the current year would have been lower by Rs 688.21 lacs. Consequently, Operating Loss Before Taxes would have been lower and Reserves and Surplus and Net Block of assets would have been higher by Rs 688.21 lacs.

6.5 Details of Related Party Disclosure:

i) Key Management Personnel

Late Mr. Sajid R. Dhanani (Managing Director)

Mr. Munawar Garbadawala (Director)

Mr. Jaykannan Perumal Swamy (Whole Time Director)

ii) Subsidiary Companies Barbeque-Nation Hospitality Limited Malwa Hospitality Pvt Ltd

iii) Associate Companies/ Firms/ Relatives Anisha R Dhanani

Aries Hotels Pvt Ltd Bharat Equity Service Ltd Genex Hotels Pvt Ltd Kayum R. Dhanani Liberty Restaurent Pvt Ltd Liberty Urvarak Ltd M.P. Agro Industries Ltd Rauf Dhanani S S Management

S.N. Travels

Sana Hospitality Pvt Ltd Sana Reality Pvt Ltd.

Sara Suole Pvt Ltd Status Travels Suchitra Dhanani Sujeet Desai

Taurus Corium Impex Pvt Ltd Transworld Furtichem Pvt Ltd Welterman International Ltd Winner Hotels Pvt Ltd


Mar 31, 2012

1.1 All shares carry equal voting rights.

1.2 Out of the total issued Equity Shares 4,668,000 Equity Shares were allotted on conversion of Foreign Currency Convertible Bond in the financial year 2010-11.

2.2 Secured Term Loan from bank includes term loans outstanding from State Bank of India, Axis Bank Ltd, State Bank of Mysore and

HDFC bank ltd.

2.2.1 Term loans from State Bank of India are secured by way of mortgage of land and building at Indore, Vadodara & Pune and hypothecation of movables, present and future except stocks of all kinds including operation supplies and spares offered to the bankers for securing the working capital finance. The terms of repayment of all term loans of State Bank of India is quarterly and interest is paid on monthly basis. These loans are personally guaranteed by some of the directors of the company.

2.2.2 Term loans from Axis Bank Ltd include two term loan account and one vehicle loan account. Term loan outstanding is secured by way of hypothecation of movable, present and future, except stocks of all kinds including operating supplies, stores and spares offered to the bankers for securing the working capital finance. The other term loan outstanding is secured by first charge by way of hypothecation of stocks of food, beverages, operating supplies, spares and book-debts, bills etc. of the company and also by way of second charge on the immovable properties of the company at Indore and Baroda and also by way of pledge of shares belonging to promoters. The term of repayment of both the term loan is quarterly and interest is paid on monthly basis. These loans are personally guaranteed by some of the directors of the company. Vehicle loans outstanding are secured by way of hypothecation charge on the specific vehicles.

2.2.3 Term loan from State Bank of Mysore is secured by way of mortgage of land and building at Indore, Vadodara & Pune and hypothecation of movables, present and future, except stocks of all kinds including operation supplies and spares offered to the Bankers for securing the working capital finance. The term of repayment of the term loan is quarterly and the interest is paid on monthly basis. This loan is personally guaranteed by some of the directors of the company.

2.2.4 Vehicle loans from HDFC Bank is secured byway of hypothecation charge on the specific vehicles.

2.3 Secured term loans from Financial Institutions includes term loan outstanding of Tourism Finance Corporation of Indian Itd(TFCI), Madhya Pradesh Finance Corporation (MPFC), and HUDCO.

2.3.1 Term loans from TFCI includes two term loan, one of which is secured on pari-passu basis by way of mortgage of land and building at Indore, Pune & Vadodara and hypothecation of the movables, present and future, excepts stocks of all kinds including operating supplies, stores, and spares offered to the bankers for securing the working capital loans and also by way of pledge of shares belonging to promoters. The term of repayment is monthly. The other term loan is secured by way of mortgage of land mortgage of land and building at Indore, Pune & Vadodara and hypothecation of the movables, present and future, excepts stocks of all kinds including operating supplies, stores, and spares offered to the bankers for securing the working capital loans and also by way of pledge of shares belonging to promoters. The term of repayment is quarterly and interest is paid on monthly basis. These loans are personally guaranteed by some of the directors of the company.

2.3.2 Term loans from MPFC are secured by way of mortgage of land and building at Indore and hypothecation of the of the movables, present and future, excepts stocks of all kinds including operating supplies, stores, and spares offered to the bankers for securing the working capital finance. The term of repayment is quarterly and interest is paid on monthly basis. These loans are personally guaranteed by some of the directors of the company.

2.3.3 Term loan from HUDCO is secured on pari-passu basis by way of mortgage of land and building at Indore, Pune & Vadodara and hypothecation of the movables, present and future, except stocks of all kinds including operating supplies, stores, and spares offered to the Bankers for securing the working capital form. The term of repayment is quarterly and interest is also paid on quarterly basis. This loan is personally guaranteed by some of the directors of the company.

3.4 Vehicle loan from TATA Capital Financial Services Limited is secured by way of hypothecation charge on the specific vehicles and payment is made on EMI basis.

4.1 Provision for employee benefits includes provision of Gratuity & leave encashment.

4.2 The Company makes annual contributions to the Employee's Group Gratuity scheme of the SBI Life Insurance Co. Ltd., a funded defined benefit plan for the qualifying employees. The scheme provides for lump sum payment to vested employees at retirement, death while in employment or on termination of employment as per the terms of the scheme. Vesting occurs upon completion of five years of service.

4.2.1 The present value of the defined benefit obligation and current service cost were measured using the Projected Unit Credit Method, with actuarial valuations being carried out at each balance sheet date. The following table sets out the status of the funded gratuity plan and the amounts recognized in the company's financial statements as at March 31,2012:-

4.3 Leave Encashment:

The provision of leave encashment have been made on outstanding privilege leave of employees at the end of year and calculated on the basis of basic pay of employees.

5.1 Working capital facilities include Cash Credit Facilities from State Bank of India outstanding Rs 495.16 lacs & Axis Bank outstanding Rs 105.79 lacs both of which are secured by first charge by way of hypothecation of stocks of food, beverages, operating supplies, stores, spares, book-debts (excluding credit card receivables), bills etc. of the company and also by way of a second charge on the immovable properties of the company at Indore, Baroda and Pune. These working capital are facilities personally guaranteed by some of the directors of the company.

5.2 Fixed deposits from Public has maturity period of 12 months and interest is payable @ 10% per annum compounded monthly.

5.3 Loans from related parties & others includes loan from directors, associates and friends & relatives of directors.

6.1 Current maturities of term loans from bank includes Principal instalments payable to State Bank of India, Axis Bank Ltd, State Bank of Mysore and to HDFC. Bank wise Current maturity is give under Note no 4.1. Other terms are same as given in Note no 4.2.

6.2 Current maturities of term loans from financial institutions includes Principal instalments payable to Tourism Finance Corporation of India ltd, Madhya Pradesh Finance Corporation and HUDCO. Financial Institution wise current maturities is given under Note no 4.1 Othertermsare same as given in note no 4.3.

6.3 Current maturities of term loan from lIBFC is of Tata Capital Financial Services Limited. Other terms are same as given in note no 4.4

6.4 Statutory dues includes VAT, luxury tax, TDS and service tax payables.

6.5 Other Current liabilities of Rs 2526.62 lacs include Rs 2360 lacs received from Barbeque Nation Hospitality Limited as advance against sale of five Barbeque Restaurants owned by the company, the sale formalities for which have been under progress. This also includes rent payable, interest payable, project payable and staff dues.

6.6 Unpaid matured deposits and interest accrued thereon includes deposits which are matured but not claimed by them. Company has sent reminders to deposit holders forfiling the repayment/ renewal requests along with the original FD certificates.

7.1 Barbeque Nation Hospitality Itd(BNHL) is subsidiary of the company with 67.59% shareholding. BNHL operates chain of restaurant in different cities of India and presently running 18 restaurants.

7.2 Malwa Hospitality Pvt ltd is 100% subsidiary of the company. Business hotel of 186 rooms is under construction at Indore and likely to commence operation in this year.

7.3 Shares of Welterman International Ltd has been sold off the market @0.10 paise per share to the promoter of that company.

7.4 Winner hotel Pvt Ltd is a Joint Venture company formed forthe purpose of Bhopal hotel.

Interest expense includes interest paid on term loans, vehicle loans & credit facilities. Other borrowing cost includes processing fees & upfront fees of loans. Other expenses includes bank charges.

8. Exceptional item of Rs 26.04 lacs is loss on sale of Investment.

Additional Disclosures

9.1 Contingent liability not provided for:

9.1.1 Claim against the company not acknowledge as debt Rs 5.06 lacs (P.Y Rs 5.06 lacs).

9.1.2 Guarantee given on behalf of other companies Rs 8821.82 lacs (P.Y Rs 6821.82 lacs). This includes Guarantee given to State Bank of India on Behalf of Barbeque-Nation Hospitality Ltd. amounting Rs 8,400 lacs (PY 6400 lacs) & guarantee given to Axis Bank Ltd on Behalf of Sana Hospitality Services Pvt .Ltd amounting to Rs 421.82 lacs (PY Rs 421.82 lacs). Outstanding balance of loan from SBI as at 31/03/12 is Rs 2177 lacs and from Axis Bank Ltd is Rs 311.42 lacs

9.1.3 Disputed statutory liabilities in respect of service tax not provided for:

(a) For the period from 01.03.05 to 31.03.09 the Hon'ble Tribunal has passed the order against the Company after giving the benefit of abatement and waiver of penalty imposed in the order passed by Learned Commissioner. Tax demand of Rs. 175.01 lacs is pending as per the Tribunal's order. Company has challenged said order before Indore bench of Hon'ble High Court of MP and got interim stay of the demand. Interest liability will also arise in case of unfavorable decision.

(b) For the period from 01.04.09 to 31.03.11 the Commissioner has passed the order against the Company without even considering the benefit given by the Hon'ble Tribunal in their prior order. Tax demand of Rs. 400.37 lacs has been raised alongwith equal amount of penalty. Company has challenged said order before Hon'ble Tribunal and got unconditional stay on merits for the entire demand. Had the benefit of abatement and waiver of penalty given by the Hon'ble Tribunal in their prior order been considered by the Learned Commissioner, the demand would have been reduced to Rs. 139.97 lacs. Interest liability will also arise in case of unfavorable decision.

9.1.4 Custom duties saved against imports under EPCG scheme is Rs 875.51 lacs (P.Y Rs 968.80 lacs)

9.1.5 Disputed liability not provided for in respect of:

(a) Vat Tax Rs 20.73 lacs (P.Y Rs 20.73 lacs) pertaining to Input tax rebate of exemption period being adjusted against presumptive tax of exemption period.

(b) Entry Tax Rs 4.64 lacs(P.Y Rs 4.64 lacs) pertains to entry tax on some items which were Considered taxable in the assessment.

The above matters are pending before Deputy Commissioner Vat Tax, Indore. Against the VAT tax order the company has also filed Writ petition before the Hon'ble High Court of MP, Jabalpur which is being admitted and pending for hearing.

9.1.6 Disputed liability of Rs 107.65 lacs (P.Y Rs. 88.29 lacs) not provided for in respect of Income Tax. The matters are pending before Income-tax Appellate Tribunal, Ahemdabad.

9.2 Based on the information available with the company, there are no dues to micro and small enterprises under the Micro, Small and Medium Enterprises Development Act.

9.3 Details of Related Party Disclosure:

i) Key Management Personnel

Sajid R. Dhanani (Managing Director)

Capt. Salim Sheikh (Director)

Munawar Garbadawala (Director)

Jaykannan Perumal Swamy (Whole-time Director)

ii) Subsidiary Companies

Barbeque-Nation Hospitality Limited Malwa Hospitality Pvt Ltd

iii) Associate Companies/ Firms/ Relatives

Sujit Desai

Kayum R Dhanani M.Y. Merchant Aries Hotels Pvt Ltd Status Travels

S.N Travels

Bharat Equity Service Ltd

Dhanani Securities Ltd

Kruger Chemical Ltd

Liberty Phosphate Ltd

M.P. Agro Industries Ltd

Uniera Laboratories P Ltd

Welterman International Ltd

Taurus Corium Pvt Ltd

Sana Hospitality P. Ltd

Transworld Furtichem P. Ltd

Ahilya Hotels Limited

Clearwater Capital Partners (Cyprus) Ltd.


Mar 31, 2011

1. Secured Loans :

a) Term Loans outstanding of Rs. 1.05 crores from Tourism Finance Corporation of India Ltd. (TFCI) are secured on pari- passu basis by way of mortgage of land and building at Indore, Pune & Vadodara and hypothecation of the movables, present and future, except stocks of all kinds including operating supplies, stores, and spares offered to the bankers for securing the working capital loans and also by way of pledge of shares belonging to promoters.

b) Corporate Loan outstanding of Rs. 7.00 crores from Tourism Finance Corporation of India Ltd. (TFCI) is secured by way of mortgage of land and building at Indore and hypothecation of the movables, present and future, except stocks of all kinds including operating supplies, stores, and spares offered to the bankers for securing the working capital loans and also by way of pledge of shares belonging to promoters.

c) Term Loan outstanding of Rs. 1.45 crores from HUDCO is secured on pari- passu basis by way of mortgage of land and building at Indore, Pune & Vadodara and hypothecation of the movables, present and future, except stocks of all kinds including operating supplies, stores, and spares offered to the Bankers for securing the working capital form.

d) Term Loans outstanding of Rs. 5.81 crores from Madhya Pradesh Financial Corporation (MPFC) are secured by way of mortgage of land and building at Indore and/ hypothecation of the movable, present and future, except stocks of all kinds including operating supplies, stores and spares offered to the Bankers for securing the working capital finance.

e) Term Loans outstanding of Rs. 69.20 crores from State Bank of India of are secured by way of mortgage of land and building at Indore, Vadodara & Pune and hypothecation of movables, present and future, except stocks of all kinds including operating supplies and spares offered to the Bankers for securing the working capital finance.

f) Term Loan outstanding of Rs. 0.68 crores from State Bank of India is securitized against the lease rent receivables of Nokia India (P) Ltd. at Indore.

g) Term Loan outstanding of Rs. 10.07 crores from State Bank of Mysore is secured by way of mortgage of land and building at Indore, Vadodara & Pune and hypothecation of movables, present and future, except stocks of all kinds including operating supplies and spares offered to the Bankers for securing the working capital finance.

h) Term Loan outstanding of Rs. 3.51 crores from Axis Bank Ltd is secured by way of mortgage of land and building at Indore, Baroda & Pune and hypothecation of the movable, present and future, except stocks of all kinds including operating supplies, stores and spares offered to the Bankers for securing the working capital finance.

i) Term Loan outstanding of Rs. 5.32 crores from Axis Bank Ltd is secured by way of hypothecation of the movable, present and future, except stocks of all kinds including operating supplies, stores and spares offered to the Bankers for securing the working capital finance. The equitable mortgage for this loan is yet to be created.

j) Corporate Loan outstanding of Rs. 0.44 crores from Axis Bank Ltd is secured by first charge by way of hypothecation of stocks of food, beverages, operating supplies stores, spares, book debt of the company and also by way of second charge on the immovable properties of the company.

k) Cash credit outstanding of Rs. 6.19 crores State Bank of India is secured by first charge by way of hypothecation of stocks of food, beverages, operating supplies, stores, spares, book-debts (excluding credit card receivables), bills etc. of the company and also by way of a second charge on the immovable properties of the company at Indore, Baroda and Pune.

l) Cash credit outstanding of Rs. 0.91 crores from Axis Bank Ltd. is secured by first charge by way of hypothecation of stocks of food, beverages, operating supplies, spares and book debts, bills etc. of the company and also by way of a second charge on the immovable properties of the company at Indore, Baroda and Pune.

m) Corporate loan outstanding of Rs.10.68 crores from Axis Bank Ltd. is secured by first charge by way of hypothecation of stocks of food, beverages, operating supplies, stores, spares, book-debts, bills etc. of the company and Second charge on the immovable properties of the company at Indore and Baroda and also by way of pledge of shares belonging to promoters.

n) Vehicle loans from Tata Capital Ltd. are secured by way of hypothecation charge on the specific vehicles.

o) Vehicle loans from HDFC Bank Limited are secured by way of hypothecation charge on specific vehicles.

p) Vehicle loans from Axis Bank Ltd. are secured by way of hypothecation charge on specific vehicles.

q) All term loans except vehicle loans from Tata Capital Ltd.,HDFC Bank Limited and Axis Bank Ltd. are personally guaranteed by some of the director of the company.

r) Installment falling due within next 12 months Rs. 2523.61 lacs (Previous year Rs. 2501.83 Lacs).

2. Contingent Liabilities not provided for :

a) Guarantees given on behalf of other companies - Rs. 6821.82 lacs (PY Rs. 5621.82 lacs)

b) Disputed statutory liabilities in respect of service tax not provided for :

(Rs. In lacs)

31.03.11 31.03.10

i) Tax Demanded 175.01 256.78

ii) Penalty thereon Nil 256.78

iii) Interest (to be levied in case of confirmation of demand) 105.87 148.35

iv) Total 280.88 661.91

The hon'ble tribunal has denied levy of penalty and also denied some demand being time barred. The Company has filed Writ Petition against the order of tribunal before the Indore Bench of hon'ble High Court of M.P and the same is pending for final hearing. The hon'ble court has stayed the demand till final hearing.

c) Customs duties saved against imports under EPCG scheme - Rs. 968.80 lacs (PY Rs. 750.38 lacs)

d) Claims against the company not acknowledged as debt : Rs. 5.06 lacs (PY Rs. 5.06 lacs)

e) Disputed liability not provided for in respect of :

i. Vat Tax Rs. 20.73 lacs (PY Rs. 20.73 lacs) pertains to Input tax rebate of exemption period being adjusted against presumptive tax of exemption period.

ii. Entry Tax Rs. 4.64 (PY Rs. 4.64 lacs) lacs pertains to entry tax on some items which were considered taxable in the assessment.

The above matters are pending before Deputy Commissioner Vat Tax, Indore. Against the VAT tax order the Company has also filed Writ Petition before the Hon'ble High Court of MP, Jabalpur which is being admitted and pending for hearing.

f) Disputed liability of Rs. 88.29 lacs (PY Nil) not provided for in respect of Income tax. The matters are pending before Commissioner (Appeals), Baroda.

3. During the year under review, company was not engaged in the business of developing and selling of properties, hence the Company has not provided primary segmental information for these segments as per Accounting Standard - 17 on "Segment Reporting" issued by the ICAI.

4. The Company adopted the Accounting Standards 15 "Employee Benefits" effective from April 1, 2007.

Defined Benefit Plans : The Company makes annual contributions to the Employee's Group Gratuity scheme of the SBI Life Insurance Co. Ltd., a funded defined benefit plan for the qualifying employees. The scheme provides for lump sum payment to vested employees at retirement, death while in employment or on termination of employment as per the terms of the scheme. Vesting occurs upon completion of five years of service.

The present value of the defined benefit obligation and current service cost were measured using the Projected Unit Credit Method, with actuarial valuations being carried out at each balance sheet date.

5. Related Party Disclosure :

a) Relationship during the year :

i) Key Management Personnel

Sajid Dhanani – Managing Director

Munawar Garbadawala – Director

Capt. Salim Sheikh – Director

ii) Subsidiary Companies

Barbeque-Nation Hospitality Limited

Malwa Hospitality Pvt Ltd

iii) Associate Companies/ Firms/ Relatives

Ahilya Hotels Limited

Aries Hotels Pvt Ltd

Bharat Equity Service Ltd.

Clearwater Capital Partners (Cyprus) Ltd.

Dhanani Securities Ltd.

Kruger Chemical Ltd

M.P. Agro Industries Ltd.

M.Y. Merchant

Status Travels

Uniera Laboratories Pvt. Ltd.

Welterman International Ltd.

6. Income Tax Liability for the year is estimated at Rs. 94.63 lacs (PY Rs. 73.73 lacs).

7. In the opinion of the Board, the Current Assets, Loans and Advances are approximately of the value stated, if realised, in the ordinary course of business. Provision for all known liabilities is adequate and not in excess of the amount reasonably necessary. Loans given to parties covered u/s 301 of the Companies Act,1956 are interest free and are realizable on demand.

8. Leave encashment has been determined based on the available leave entitlement at the end of the calendar year. The incremental amount so calculated is debited to Employees Emoluments.

9. The turnover of the Company by way of Food and Beverages and sale of shops do not admit of quantitywise details.

10. The balances in party accounts are subject to confirmation.

11. Based on the information available with the Company, there are no dues to micro and small enterprises under the Micro, Small and Medium Enterprises Development Act.

12. No provision has been made for diminution, if any, in the value of investments held for long term as in the opinion of the management company would be able to recover at least the cost of the investments.

13. In pursuance of the resolution passed at the EGM held on 03.05.06 the company had issued 0.50% Foreign Currency Convertible Bonds of US$ 1,00,000 each totaling to US$ 7.50 million. The Bonds were listed at Luxemburg Stock Exchange, London. The Bondholders has exercised their option to convert the shares and accordingly 46,68,000 shares @ Rs. 75/- each (face value Rs. 10/- each) has been allotted on 10.05.2010 in lieu of FCCB.

14. Fixed deposits from public includes Matured but unclaimed deposits of 14 parties totaling to Rs. 2.30 lacs.

15. Figures of previous year have been regrouped, rearranged and recast wherever necessary so as to make them comparable with those of current year.


Mar 31, 2010

1. Secured Loans :

a) Term Loans of Rs. 20.95 crores from Tourism Finance Corporation of India Ltd. (TFCI) are secured on pari- passu basis by way of mortgage of land and building at Indore, Pune & Vadodara and hypothecation of the movables, present and future, except stocks of all kinds including operating supplies, stores, and spares offered to the bankers for securing the working capital loans.

b) Term Loan of Rs. 4.93 crores from HUDCO is secured on pari- passu basis by way of mortgage of land and building at Indore, Pune & Vadodara and hypothecation of the movables, present and future, except stocks of all kinds including operating supplies, stores, and spares offered to the Bankers for securing the working capital form.

c) Term Loans of Rs. 7.40 crores from Madhya Pradesh Financial Corporation (MPFC) are secured by way of mortgage of land and building at Indore and/ hypothecation of the movable, present and future, except stocks of all kinds including operating supplies, stores and spares offered to the Bankers for securing the working capital finance. Term loan of Rs.7.50 Crores is secured by way of hypothecation of the movable, present and future, except stocks of all kinds including operating supplies, stores and spares offered to the Bankers for securing the working capital finance. The equitable mortgage for this loan is yet to be created.

d) Term Loans of Rs. 54.60 crores from State Bank of India of are secured by way of mortgage of land and building at Indore, Vadodara & Pune and hypothecation of movables, present and future, except stocks of all kinds including operating supplies and spares offered to the Bankers for securing the working capital finance.

e) Term Loan of Rs. 2.00 crores from State Bank of India is securitized against the lease rent receivables of Nokia India (P) Ltd. at Indore.

f) Term Loans of Rs. 29.75 crores from State Bank of Indore are secured by way of mortgage of land and building at Indore, Vadodara & Pune and hypothecation of movables, present and future, except stocks of all kinds including operating supplies and spares offered to the Bankers for securing the working capital finance.

g) Term Loan of Rs. 11.50 crores from State Bank of Mysore is secured by way of mortgage of land and building at Indore, Vadodara & Pune and hypothecation of movables, present and future, except stocks of all kinds including operating supplies and spares offered to the Bankers for securing the working capital finance.

h) Term Loan of Rs. 6.75 crores from Axis Bank Ltd is secured by way of mortgage of land and building at Indore, Baroda & Pune and hypothecation of the movable, present and future, except stocks of all kinds including operating supplies, stores and spares offered to the Bankers for securing the working capital finance.

i) Working Capital Term Loan of Rs. 1.25 crores from Axis Bank Ltd is secured by first charge by way of hypothecation of stocks of food, beverages, operating supplies stores, spares, book debt of the company and also by way of second charge on the immovable properties of the company.

j) Working Capital Medium Term Loan of Rs.1.50 crores from Madhya Pradesh Financial Corporation (MPFC) is secured by way of mortgage of Shops at Sayaji Plaza, Indore.

k) Cash credit facilities of Rs. 6.25 crores State Bank of India is secured by first charge by way of hypothecation of stocks of food, beverages, operating supplies, stores, spares, book-debts (excluding credit card receivables), bills etc. of the company and also by way of a second charge on the immovable properties of the company at Indore, Baroda and Pune.

l) Cash credit facilities of Rs. 1.50 crores from Axis Bank Ltd. is secured by first charge by way of hypothecation of stocks of food, beverages, operating supplies, spares and book debts, bills etc. of the company and also by way of a second charge on the immovable properties of the company at Indore, Baroda and Pune.

m) Corporate loan of Rs.16.00 crores from Axis Bank Ltd. is secured by first charge by way of hypothecation of stocks of food, beverages, operating supplies, stores, spares, book-debts, bills etc. of the company and also by way of a Second charge on the immovable properties of the company at Indore and Baroda.

n)Vehicle loans from ICICI Bank Ld. are secured by way of hypothecation charge on the specific vehicles. o) Vehicle loans from HDFC Bank Limited are secured by way of hypothecation charge on specific vehicles. p) Vehicle loans from Axis Bank Ld. are secured by way of hypothecation charge on specific vehicles.

q) All term loans except vehicle loans from ICICI Bank Limited,HDFC Bank Limited and Axis Bank Ltd. are personally guaranteed by some of the director of the company.

r) Installment falling due within next 12 months Rs. 2501.83 Lcs.

2. Contingent Liabilities not provided for :

a) Guarantees given on behalf of other companies - Rs. 5621.82 lacs

(Previous year Rs. 520 lacs)

b) Disputed statutory liabilities in respect of service tax not provided for : (Rs. In lacs)

31.03.10 31.03.09

i) Tax Demanded 256.78 127.33

ii) Penalty thereon 256.78 127.33

iii) Interest (to be levied in cse of confirmation of demand) 148.35 16.34

iv) Total 661.91 271.00

The matters are pending before the hon’ble CESTAT, New Delhi. The Company has got stay order against the tax demand of Rs.127.33 lacs.

c) Customs duties saved against imports under EPCG scheme - Rs. 750.38 lacs (Previous year Rs. 695.30 lacs)

d) Claims against the company not acknowledged as debt : Rs. 5.06 lacs

e) Disputed liability in respect of :

i. Luxury Tax Rs. 41.13 lacs pertains to tax deposited not considered at the time of assessment and interest charged thereon.

ii. Vat Tax Rs. 20.73 lacs pertains to Input tax rebate of exemption period being adjusted against presumptive tax of exemption period.

iii. Entry Tax Rs. 4.64 lacs pertains to entry tax on some items which were considered taxable in the assessment.

The above matters are pending before Deputy Commissioner Vat Tax, Indore.

3. During the year under review, company was not engaged in the business of developing and selling of properties, hence the Company has not provided primary segmental information for these segments as per Accounting Standard-17 on "Segment Reporting" issued by the ICAI.

5. Related Party Disclosure :

a) Relationship during the year :

i) Key Management Personnel

Sajid Dhanani – Managing Director

Munawar Garbadawala – Director

Capt. Salim Sheikh – Director

ii) Subsidiary Companies

Barbeque-Nation Hospitality Limited Malwa Hospitality Pvt Ltd

iii) Associate Companies/ Firms/ Relatives

Ahilya Hotels Limited

Aries Hotels Pvt Ltd

Bharat Equity Service Ltd.

Clearwater Capital Partners (Cyprus) Ltd.

Dhanani Securities Ltd.

Kruger Chemical Ltd

M.P. Agro Industries Ltd.

M.Y. Merchant

R. R. Dhanani

R.S. Udar

Sanya Enterprises

Status Travels

Sabiya Amusement Pvt. Ltd

Uniera Laboratories Pvt. Ltd.

Welterman International Ltd.

6. Income Tax Liability for the year is estimated at Rs.73.73 lacs (Rs. 10.93 lacs towards Minimum Alternate Tax for the year and Rs.

62.80 lacs towards earlier year taxes) (Previous year 93.09 Lacs) under the Income tax Act, 1961. As there has been a virtual certainty about the Company making profits, timing differences, namely the differences that originate in one accounting period and capable of reversal in other, after duly identifying the differences between the profit offered to tax and profit as per financial statement, has been recognized during the year.

7. In the opinion of the Board, the Current Assets, Loans and Advances are approximately of the value stated, if realised, in the ordinary course of business. Provision for all known liabilities is adequate and not in excess of the amount reasonably necessary.

8. Leave encashment has been determined based on the available leave entitlement at the end calendar year. The incremental amount so calculated is debited to Employees Emoluments.

9. The turnover of the Company by way of Food and Beverages and sale of shops do not admit of quantitywise details.

10. Debit and Credit balances in party accounts are subject to confirmation and reconciliation.

16. Based on the information available with the Company, there are no dues to micro and small enterprises under the Micro, Small and Medium Enterprises Development Act.

17. No provision has been made for diminution, if any, in the value of investments held for long term as in the opinion of the management company would be able to recover at least the cost of the investments.

18. In pursuance of the resolution passed at the EGM held on 03.05.06 the company has issued 0.50% Foreign Currency Convertible Bonds of US$ 1,00,000 each totaling to US$ 7.50 million. The Bonds are listed at Luxemburg Stock Exchange, London. After the Balance Sheet date the Bondholders has exercised their option to convert the shares and accordingly 46,68,000 shares has been allotted on 10.05.2010 in lieu of FCCB.

19. The company had allotted 50 lakhs share warrants @ Rs. 80/- each on 23.01.2008 against which Rs. 4,00,08.387/- were received as application money. As per the terms of the issue and relevant guidelines the last date for conversion of share warrants to fully paid-up equity shares was 22.07.2009. Since the investors has not opted to pay the balance amount of subscription, the company has forfeited the application money. The forfeited amount has been transferred to General Reserve.

20. Figures of previous year have been regrouped, rearranged and recast wherever necessary so as to make them comparable with those of current year.

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