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Notes to Accounts of Sayaji Hotels Ltd.

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.

 
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