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Notes to Accounts of Taj GVK Hotels & Resorts Ltd.

Mar 31, 2019

1. (a) Due to inadequacy of, profits computed in accordance with the provisions of section 198 of the Companies Act read with Schedule V thereto, the remuneration paid to the Managing Director for the financial year 2018-19 is in excess of the limits specified under section 198 of the Companies Act, 2013, aggregating to Rs.148.87 lakhs. The Nomination and Remuneration Committee of the Board and Board of Directors at their meeting held on 15th May, 2019 approved and waived the recovery of excess remuneration paid to Managing Director. The Company shall place the said resolution for approval of the shareholders at the ensuing Annual General Meeting as required under the amended provisions of the Companies Act, 2013.

The Company made applications to the Central Government / Ministry of Corporate Affairs (MCA) seeking waiver/ exemption for payment of excess remuneration for the above said financial years to Managing Director and Executive Director.

Following the amendment to the Companies Act in 2018, the Ministry has notified the rules vide notification dated 12.09.2018 amending sections 196, 197 and 198 and Schedule V of the Companies Act, 2013. As per the notification, the approval of the Central Government / MCA is not required for payment of excess remuneration to managerial personnel and all the pending applications with the MCA seeking approval for payment of managerial remuneration in excess of the limits laid down would automatically abate and companies are given one year time to approach the shareholders for passing necessary resolution seeking waiver of the excess remuneration paid to managerial personnel.

The Nomination and Remuneration Committee of the Board and Board of Directors at their meeting held on 15th March, 2019 approved the excess remuneration paid to Managing Director and Executive Director for the respective years and waived the recovery of the excess remuneration from Managing Director and Executive Director of the company. The Company is placing the said resolution for approval of the shareholders at the ensuing Annual General Meeting as required under the amended provisions of the Companies Act, 2013.

2. i) Disclosure of Trade Payables under Current Liabilities is based on the information furnished by the vendors and available with the Company regarding the status of the suppliers as defined under the "Micro, Small and Medium Enterprises Development (MSMED) Act, 2006â.

Sensitivity Analysis:

Gratuity is a lump sum plan and the cost of providing these benefits is typically less sensitive to small changes in demographic assumptions. The key actuarial assumptions to which the benefit obligation results are particularly sensitive to are discount rate and future salary escalation rate. The following table summarizes the impact in percentage terms on the reported defined benefit obligation at the end of the reporting period arising on account of an increase or decrease in the reported assumption by 50 basis points.

These sensitivities have been calculated to show the movement in defined benefit obligation in isolation and assuming there are no other changes in market conditions at the accounting date. There have been no changes from the previous periods in the methods and assumptions used in preparing the sensitivity analyses.

Compensated Absences:

The Companyâs liability towards un-funded leave encashment is determined by independent actuarial valuation using the projected unit credit method which considers each period of service as giving rise to an additional unit of benefit entitlement and measures each unit separately to build up the final obligation.

The Defined Benefit Obligation of compensated absence in respect of the employees of the Company as at 31 March, 2019 works out to Rs.2,53,65,566/- (2018: Rs.2,31,73,091)

The discount rate and salary escalation rate is the same as adopted for gratuity liability valuation.

The estimates of future salary increases (which has been set in consultation with the company) takes account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

28. Corporate Social Responsibility Expenditure

Gross amount required to be spent and actually spent by the company during the year: Rs. 44.91 lakhs (2018: Rs.22.42 lakhs)

3 In the opinion of the Board of Directors of the company, the current assets, loans and advances are expected to realize in the ordinary course of business approximately the value at which they are stated in accounts.

4. Segmental Reporting:

The Companyâs only business being hoteliering, disclosure of segment-wise information under Accounting Standard (AS) 108 "Segmental Informationâ notified by the Companies (Accounting Standards) Rules, 2006 (as amended) does not arise. There is no geographical segment to be reported since all the operations are undertaken in India.

5. Risk Management, Objectives and Policies:

Risks and Concerns

Economic Risks: Hotel business in general is sensitive to fluctuations in the economy. The hotel sector may be unfavourably affected by changes in global and domestic economies, changes in local market conditions, excess room supply, reduced international or local demand for hotel rooms and associates services, competition in the industry, government policies and regulations, fluctuations in interest rates and foreign exchange rates and other natural and social factors. Since demand for hotels is affected by world economic growth, a global recession could lead to a downturn in the hotel industry.

Socio-Political Risks: The Hotel industry faces risk from volatile socio-political environment, internationally as well as within the country. India, being one of the fastest growing economies of the world in the recent past, continues to attract investments. However, any adverse events such as political instability, conflict between nations, terrorist attacks or spread of any epidemic or security threats to any countries may affect the level of travel and business activity.

Security Risks: The Hotel industry demands peace at all times to flourish. The biggest villain in South East Asia has been terrorism supplemented by political instability. Subsequent to the Mumbai terror attacks in November 2008, the hotel industry has invested substantially on security and intelligence. The security concerns have been duly addressed instilling confidence in the customer by providing international standards of safety.

Company-specific Risks Heavy Dependence on India

Risk of wage inflation: The hotel industry needs quality employees and with demand for the same improving across the industry, the Company feels that wage inflation would be a critical factor in determining costs for the Company. Thus, your Company will continue to focus on improving manpower efficiencies and creating a lean organization, while maximizing effectiveness in terms of customer service and satisfaction, which is an area of great importance for your Company.

Foreign Exchange Risk: Your Company may be impacted by the fluctuation of the Indian Rupee against other foreign currencies. To mitigate this risk the Company has migrated to single currency billing in Indian Rupees.

Project Implementation Risk: Your Company may be impacted by delays in implementation of projects which would result in increasing project cost and loss of potential revenue. To mitigate this risk, the Company has in place an experienced project team supported by the leading external technical consultants and a dedicated project management company. The Company will endeavor to complete its projects on time at optimal cost so as to maximize the profitability.

6. Capital management

The Companyâs policy is to maintain strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of business.

The Company manages its Capital structure through a balanced mix of debt and equity. The Companyâs capital structure is influenced by the changes in the regulatory frameworks, government policies, available options of financing and impact of the same on liquidity position.

The Company includes within net debt, interest bearing loans and borrowings, trade and other payables, less cash and cash equivalents. The Company monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. The table below shows the Gearing ratio for FY 2018-19 and FY 2017-18.

No changes were made in the objectives, policies or processes for managing capital during the years ended 31 March, 2019 and 31 March, 2018.

7. Financial risk management objectives and policies

The Company is exposed to financial risk such as Market Risk (Interest Rate Risk, fluctuation in foreign exchange rates and price risk), credit risk and liquidity risk. The general risk management program of the Company focuses on the unpredictability of the financial markets and attempts to minimize their potential negative influence on the financial performance of the Company. The Company continuously reviews its risk exposures and takes measures to limit it to acceptable levels. The Board of Directors have the overall responsibility for the establishment and oversight of the Companyâs risk management framework.

Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk i.e. interest rate risk, foreign currency risk and other price risk. Financial instruments of the Company affected by market risk include borrowings and deposits.

The sensitivity analysis in the following sections relate to the position as at 31 March, 2019 and 31 March, 2018.

The analysis exclude the impact of movements in market variables on the carrying values of gratuity and other post- retirement obligations; provisions; and the non-financial assets and liabilities.

The following assumptions have been made in calculating the sensitivity analysis:

The sensitivity of the relevant profit or loss item is the effect of the assumed changes in respective market risks. This is based on the financial assets and financial liabilities held at 31 March, 2019 and 31 March, 2018.

Interest rate risk

The interest rate risk arise from long term borrowing of the company with variable interest rates (Bank one year MCLR plus spread). Although the spread is fixed, it is subject to change at fixed time interval or occurrence of specified event(s). Management monitors the movement in interest rate and, wherever possible, reacts to material movements in such rates by restructuring its financing arrangement.

Price risk

Price risk is the risk of fluctuations in the change in prices of equity Investments. The Companyâs investment in JV company is of strategic in nature rather than for trading purpose.

Credit risk

Credit risk is the risk arising from credit exposure to customers and the counter party will default on its contractual obligations.

The Company has adopted a policy of only dealing with creditworthy customers/ corporates to minimize collection losses. Credit Control team assesses the credit quality of the customers, their financial position, past experience in payments and other relevant factors. Advance payments are obtained from customers in banquets, as a means of mitigating the risk of financial loss from defaults.

The carrying amount of trade and other receivables, advances to suppliers, cash and short-term deposits and interest receivable on deposits represents companyâs maximum exposure to the credit risk. No other financial asset carry a significant exposure with respect to the credit risk. Deposits and cash balances are placed with Schedule Commercial banks.

An impairment analysis is performed at each reporting date on an individual basis for major clients. In addition, a large number of minor receivables are assessed for impairment collectively. The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets. The Company also holds advances as security from customers to mitigate credit risk.

Financial instruments and cash deposits

Credit risk from balances with banks and financial institutions is managed by the Companyâs treasury department in accordance with the Companyâs policy. Investments held by the Company are in the nature of investment in jointly controlled entity and also an investment in an alternate energy supply company as required under the respective State energy policy. Both the categories are unquoted non-trade equity.

Liquidity risk

Liquidity risk is the risk that the Company will have difficulty in raising the financial resources required to fulfill its commitments. Liquidity risk is held at low levels through effective cash flow management. Cash flow forecasting is performed internally by rolling forecasts of the Companyâs liquidity requirements to ensure that it has sufficient cash to meet operational requirements, to fund scheduled capex and debt repayments and to comply with the terms of financing documents.

The Company primarily uses short-term bank facilities in the nature of bank overdraft facility to fund its ongoing working capital requirements.

8. New Accounting Standards, Amendments to Existing Standards, Annual Improvements and Interpretations Effective Subsequent to 31 March, 2019

On 30 March 2019, Ministry of Corporate Affairs issued Companies (Indian Accounting Standards) Amendment Rules, 2019 notifying Ind AS 116 - "Leases". Ind AS 116 will replace Ind AS 16. Ind AS 116 introduces major changes in the principles for measuring, recognizing and presenting leases in the financial statements of lessees. As of 1 April, 2019, Ind AS 116 requires lessees to recognize most leases using a single accounting model, i.e., the same model as that used to recognize finance leases under Ind AS 17. The lessee will recognize:

- a non-current asset representing its right to use the leased asset, in the statement of financial position;

- a financial liability representing its obligation to pay for the right to use the asset, in the statement of financial position;

- amortization of the right-of-use asset and interest expenses on the lease liability, in the statement of income.

The main measures included in Ind AS 116 to simplify application and adopted by the Company are:

- exclusion of short-term leases;

- exclusion of leases of low-value assets.

The Company will apply Ind AS 116 using the modified retrospective approach. This simplified approach does not require restatement of financial statements published before the date Ind AS 116 is first applied.

Within the scope of its transition to Ind AS 116, the Company has elected the following main options to simplify application:

- exclusion of leases with a residual term of 12 months or less at the transition date, along with leases of low-value assets;

- application of Ind AS 116 only to contracts previously identified as leases;

- use of the initial lease term to determine the discount rate at the transition date;

- exclusion of initial direct costs from the measurement of the right-of-use asset at the date of initial application.

The Company is currently finalizing its assessment of the impact of applying Ind AS 116 on its financial statements, based on the leases identified and an analysis of their main terms and conditions. The Company mainly has lease contracts for land and buildings which are currently accounted for as operating leases and for which it will be required to recognize a right-of-use asset under Ind AS 116.

9. Balances in the accounts of various parties are subject to confirmation and reconciliation.

10. Previous Yearâs figures have been regrouped / rearranged, wherever necessary. Figures in brackets indicate those for previous year.

Mar 31, 2017

1. General information

TAJGVK Hotels & Resorts Limited (âTAJGVKâ / âthe Companyâ) was incorporated on 02nd February, 1995 in state of Andhra Pradesh, India. The Company is a joint venture between the GVK Group and Indian Hotels Company Limited. The Company is primarily engaged in the business of owning, operating & managing hotels, palaces and resorts with the brand name of âTAJâ.

2. The statements were authorized for issue in accordance with a resolution of the Board of Directors passed on May 17,2017.

NOTE 3 : BORROWINGS

i) Term Loans from Banks:

Rs.150.00 crores from HDFC Bank Ltd at an interest rate of 10.25% p.a secured by first charge on all assets of Taj Chandigarh, Chandigarh repayable in 32 equal instalments with a moratorium of 2 years from August 2014 .ie. from the date of first disbursement.

Rs.119.35 crores from AXIS Bank Ltd at an interest rate of 10.15% p.a secured by first charge on all assets of Taj Club House, Chennai repayable in 26 unequal instalments with a moratorium of 2.5 years from July 2014 .ie. from the date of first disbursement.

ii) Loans repayable on demand from Banks:

Bank Overdraft Rs.Nil (2016 : Rs.251.21 lakhs) from AXIS Bank Ltd and IDBI Bank Ltdare secured as under:

AXIS Bank Ltd : First charge on current assets of the Company, ranking pari passu with IDBI Bank Ltd and second charge on fixed assets of Taj Club House.

IDBI Bank Ltd : First charge on current assets of the company ranking pari passu with AXIS Bank Ltd Interest rate on loans repayable on demand from the banks at 10.25% p.a

Foot note :

(i) The amount due to Micro and Small Enterprises as defined in the âThe Micro, Small and Medium Enterprises Development Act, 2006â has been determined to the extent such parties have been identified on the basis of information collected by the Management.

4. Commitments and Contingent liabilities not provided for in respect of Commitments

Estimated amount of contracts remaining to be executed on capital account Rs.30.14 Lakhs (2016: Rs.3.68 Lakhs).

5. As required under the MCA notification G.S.R. 308(E) dated March 31, 2017 on the âDetails of Specified Bank Notes (SBN), the following are the details of specified bank notes (SBNs) or other denomination note (ODNs) held and transacted during the period from November 8, 2016 to December 30, 2016:

6. Due to inadequacy of the profits the remuneration paid to the Managing Director and the Executive Director for the financial year 2016-17 is in excess of the limits specified under Sections 197 and 198 of the Companies Act, 2013, aggregating to Rs.153.50 lacs and Rs.40.75 lacs respectively. The Company is in the process of submitting an application to the Central Government for approval of the excess remuneration paid to the Managing Director and Executive Director as per the terms of their appointment. The Nomination and Remuneration Committee of the Board and Board of Directors at their meeting held on 17^th May 2017 approved the waiver of excess remuneration paid whole time Directors and also the Company is placing the requisite resolution for approval of shareholders at the ensuing Annual General Meeting.

7. The company prepared its financial statements in accordance with the Accounting Standards (AS) notified under section 133 of the Companies Act 2013, read together with paragraph 7 of the companies(Accounts) Rules, 2014 (Indian GAAP) for and including the year ended March 31, 2016. The company has prepared its first Ind AS (Indian Accounting Standards) compliant Financial Statements for the year ended March 31,2017 with restated comparative figures for the year ended March 31, 2016 in compliance with Ind AS. Accordingly, the Opening Balance Sheet, in line with Ind AS transitional provisions, has been prepared as at April 1, 2015, the date of companyâs transition to Ind AS. The principal adjustments made by the company in restating its Indian GAAP financial statements for the financial year ending March 31, 2016 and the balance sheet as at April 1, 2015 are as mentioned below:

Exemptions applied

Ind AS 101 on First Time adoption of Ind AS allows first-time adopters certain exemptions from the retrospective application of certain requirements under Ind AS. The company has adopted the following exemptions

I. Deemed cost of Property, Plant and Equipment(âPPEâ)/Capital Work-in-Progress(âCWIPâ) and Intangible Assets

There is no change in the functional Currency of the Company and accordingly, it has elected to continue with the carrying values for all of its property, plant and equipment and intangible assets as recognized in its Indian GAAP financial statements as the deemed cost at the transition date. Accumulated depreciation was calculated on that amount as at the date of transition to Ind AS on the basis of the current estimate of the useful life of the asset using the depreciation policy adopted by the company in accordance with Ind AS.

II. Investment in Joint Venture

In accordance with the exemption given in Ind AS 101, the company has elected to record its investment in Joint venture at their previous GAAP carrying amount as deemed cost as on the date of transition to Ind AS.

III. Impairment of financial assets

The Company has applied the exception related to impairment of financial assets given in Ind AS 101. It has used reasonable and supportable information that is available without undue cost or effort to determine the credit risk at the date that financial assets were initially recognised and compared that to the credit risk as at April 1, 2015.

IV. Derecognition of financial assets and financial liabilities

The Company has applied the derecognition requirements for financial assets and financial liabilities in Ind AS 109 prospectively for transactions occurring on or after the transition to Ind AS.

V. Classification and measurement of financial assets

The Company has classified the financial assets in accordance to Ind AS 109 on the basis of the facts and circumstances that exist on the date of transition to Ind AS.

8. Deposits recoverable under Loans and Advances include the following amounts paid under protest:

i) Rs.101.99 lakhs (Rs.101.99 lakhs) paid under the VAT Act pertaining to financial years 2005-06 to 2012-13.

ii) Rs.260.72 lakhs (Rs.254.79 lakhs) paid under the Income Tax Act pertaining to financial years 2002-03 and 2005-06.

9. i) Disclosure of Trade Payables under Current Liabilities is based on the information available with the Company regarding the status of the suppliers as defined under the âMicro, Small and Medium Enterprises Development (MSMED) Act, 2006â.

ii) Details of total outstanding dues to Micro and Small Enterprises as per MSMED Act, 2006:

10. Related Parties Disclosure

Disclosures as required under Ind AS 24 âRelated Party Disclosuresâ issued by the Institute of Chartered Accountants of India are given below:

11. EMPLOYEE BENEFITS :

Defined contribution plan:

Amount recognized as an expense in statement of profit and loss Rs.93.87 lakhs (2016: Rs.93.20 lakhs) on account of provident fund and Rs.45.78 lakhs (2016: Rs. 42.62 lakhs) on account of Employee State Insurance.

Defined benefit plan:

Gratuity:

The Company has a funded defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) (except in case of Taj Banjara where every employee gets a gratuity at 30 days salary) for each completed year of service as per the provision of the Payment of Gratuity Act,1972 with total ceiling on gratuity of Rs.1,000,000/-

The following tables summarize the components of net benefit recognized in the Statement of Profit and Loss and amounts recognized in the Balance Sheet for the respective employee gratuity plans.

Sensitivity Analysis:

Compensated Absences:

The Defined Benefit Obligation of compensated absence in respect of the employees of the Company as at 31 March 2017 works out to Rs.1,75,98,079/-.

The discount rate and salary escalation rate is the same as adopted for gratuity liability valuation.

12. CORPORATE SOCIAL RESPONSIBILITY EXPENDITURE

Gross amount required to be spent by the company during the year: Rs.57.29 lakhs

13. In the opinion of the Board of Directors of the company, the current assets, loans and advances are expected to realise in the ordinary course of business approximately the value at which they are stated in accounts.

14. Segmental Reporting:

The Companyâs only business being hoteliering, disclosure of segment-wise information is not applicable under Accounting Standard (AS) 17 âSegmental Informationâ 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.

15. In the absence of Operating Agreement for Taj Chandigarh, no provision was made in the Accounts towards Management Fee for the FY 2016-17. The fee already provided for July, 2015 to March, 2016 was also reversed in FY 2016-17 and disclosed in exceptional items.

16. Risk Management, Objectives and Policies:

Risks and Concerns

Company-specific Risks

Heavy Dependence on India

Risk of wage inflation: The hotel industry needs quality employees and with demand for the same improving across the industry, the Company feels that wage inflation would be a critical factor in determining costs for the Company. Thus, your Company will continue to focus on improving manpower efficiencies and creating a lean organisation, while maximising effectiveness in terms of customer service and satisfaction, which is an area of great importance for your Company.

Project Implementation Risk: Your Company may be impacted by delays in implementation of projects which would result in increasing project cost and loss of potential revenue. To mitigate this risk, the Company has in place an experienced project team supported by the leading external technical consultants and a dedicated project management company. The Company will endeavour to complete its projects on time at optimal cost so as to maximise the profitability.

17. Capital management

The Companyâs policy is to maintain strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of business.

The Company manages Capital structure by balanced mix of debt and equity. The Companyâs capital structure is influenced by the changes in the regulatory frameworks, government policies, available options of financing and impact of the same on liquidity position.

No changes were made in the objectives, policies or processes for managing capital during the years ended 31 March 2017 and 31 March 2016.

18. Fair values

Set out below, is a comparison by class of the carrying amounts and fair value of the Companyâs financial instruments, other than those with carrying amounts that are reasonable approximations of fair values:

The management assessed that fair value of cash and cash equivalents, trade receivables, trade payables, bank overdrafts and other current liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments. The fair value of the financial assets and liabilities is included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.

Fair values hierarchy

The following table provides the fair value measurement hierarchy of the Companyâs assets and liabilities:

Quantitative disclosures fair value measurement hierarchy for assets as at 31 March 2017:

There have been no transfers between Level 1 and Level 2 during the period.

The following table provides the fair value measurement hierarchy of the Companyâs assets and liabilities: Quantitative disclosures fair value measurement hierarchy for assets as at 01 April 2015:

19 Financial risk management objectives and policies

The Company is exposed to financial risk such as Market Risk (Interest Rate Risk, fluctuation in foreign exchange rates and price risk), credit risk and liquidity risk. The general risk management program of the Company focuses on the unpredictability of the financial markets and attempts to minimize their potential negative influence on the financial performance of the Company. The Company continueously reviews its risk exposures and takes measures to limit it to accepatble levels. The Board of Directors have the overall responsibility for the establishment and oversight of the Companyâs risk management framework.

Market risk

The sensitivity analysis in the following sections relate to the position as at 31 March 2017 and 31 March 2016.

The analysis exclude the impact of movements in market variables on the carrying values of gratuity and other postretirement obligations; provisions; and the non-financial assets and liabilities.

The following assumptions have been made in calculating the sensitivity analysis:

Interest rate risk

The interest rate risk arise from long term borrowing of the company with variable interest rates (Bank one year MCLR plus spread). Although the spread is fixed, it is subject to change at fixed time interval or occurence of specified event(s). Management monitors the movement in interest rate and, wherever possible, reacts to material movements in such rates by restructuring its financing arrangement.

Interest rate sensitivity

The following table demonstrates the sensitivity to a reasonably possible change in interest rates, with all other variables held constant, the Companyâs profit before tax is affected through the impact on floating rate borrowings, as follows:

Price risk

Price risk is the risk of fluctuations in the change in prices of of equity Investments. The Companyâs investment in JV company is of strategic in nature rather than for trading purpose.

Credit risk

Credit risk is the risk arising from credit exposure to customers and the couter party will default on its contractual obligations.

The Company has adopted a policy of only dealing with creditworthy customers/ corporatres to minimise collection losses. Credit Control team assesses the credit quality of the customers, their financial position, past experience in payments and other relevent factors. Advance payments are obtained from customers in banquets, as a means of mitigating the risk of financial loss from defaults.

Financial instruments and cash deposits

Liquidity risk

Liquidity risk is the risk that the Company will have difficulty in raising the financial resources required to fulfill its commitments. Liquidity risk is held at low levels through effective cash flow management. Cash flow forecasting is performed internally by rolling forecasts of the Companyâs liquidity requirements to ensure that it has sufficient cash to meet operational requiremnts, to fund scheduled capex and debt repaymnts and to comply with the terms of financing documents.

The Company primarily uses short-term bank facilities in the nature of bank overdraft facility to fund its ongoing working capital requirements.

The table below summarises the maturity profile of the Companyâs financial liabilities based on contractual undiscounted payments.

20. Previous Yearâs figures have been regrouped / rearranged, wherever necessary. Figures in brackets indicate those for previous year.

Mar 31, 2016

1. Deposits recoverable under Loans and Advances include the following amounts paid under protest:

i) Rs. 101.99 lacs (Rs. 209.48 lacs) paid under the VAT Act pertaining to financial years 2005-06 to 2012-13.

ii) Rs. 254.79 lacs (Rs.147.09 lacs) paid under the Income Tax Act pertaining to financial years 2002-03 and 2005-06.

2. Due to inadequacy of the profits the remuneration paid to the Managing Director and the Executive Director is in excess of the limits specified under Sections 197 and 198 of the Companies Act, 2013, aggregating to Rs.189.48 lacs and Rs. 81.11 lacs respectively. Company is in the process of submitting an application to the Central Government for approval of the excess remuneration paid to the Managing Director and Executive Director as per the terms of their appointment. The Company is placing the requisite resolution for approval of shareholders at the ensuing Annual General Meeting.

3. i) Disclosure of Trade Payables under Current Liabilities is based on the information available with the Company regarding the status of the suppliers as defined under the "Micro, Small and Medium Enterprises Development (MSMED) Act, 2006".

ii) Details of total outstanding dues to Micro and Small Enterprises as per MSMED Act, 2006:

iii) Transactions in Foreign Currency

a) Earnings in Foreign Exchange Rs. 3832.04 Lacs (2015: Rs. 4163.46 Lacs)

As reported by The Company to the Ministry of Tourism / Government of India and as certified by the Management but not verified by the auditors

b) Expenditure in foreign currency:

The Company''s liability towards un-funded leave encashment is determined by independent actuarial valuation using the projected unit credit method which considers each period of service as giving rise to an additional unit of benefit entitlement and measures each unit separately to build up the final obligation.

The Defined Benefit Obligation of compensated absence in respect of the employees of the Company as at 31 March 2016 works out to Rs. 97,67,887/-. The discount rate and salary escalation rate is the same as adopted for gratuity liability valuation.

4. Corporate Social Responsibility Expenditure

Gross amount required to be spent by the company during the year: Rs.57.29 lacs

5. In the opinion of the Board of Directors of the company, the current assets, loans and advances are expected to realize in the ordinary course of business approximately the value at which they are stated in accounts.

6. Segmental Reporting:

The Company''s only business being hoteliering, disclosure of segment-wise information is not applicable under Accounting Standard (AS) 1 7 "Segmental Information" 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.

7. Previous Year''s figures have been regrouped / rearranged, wherever necessary. Figures in brackets indicates those for previous year.

Mar 31, 2015

1. General information

TAJGVK Hotels & Resorts Limited ("TAJGVK" / "the Company") is joint venture between the GVK Group and Indian Hotels Company Limited and was incorporated on 2nd February, 1995 in state of Andhra Pradesh, India.

The Company is primarily engaged in the business of owning, operati ng & managi ng hotels, palaces and resorts with the brand name of "TAJ".

ii) Rights, preferences and restrictions attached to shares:

The company has one class oi equity shares having a par value oi - P per share. Equity shares are attached with one vote per share. In the event oi liquidation, the equity shareholders are eligible to receive the remaining assets oi the Company after distribution oi all preferential creditors, in proportion to their shareholding.

i) Term Loans from Banks:

-15,000.00 lacs from HDFC Bank Ltd secured by first charge on all assets ofTa] Chandigarh, Chandigarh and repayable in QP equal instalments with a moratorium of P years from date of first disbursement.

-11,934.98 lacs from AXIS Bank Ltd secured by first charge on all assets of Ta] Club House, Chennai and repayable in Pb unequal instalments with a moratorium of P.5 years from date of first disbursement.

i) The Company acquired 3,67,50,000 (48.99%) equity shares of -TO/- each fully paid up of M/s.Greenwoods Palaces & Resorts Pvt Ltd at a premium of - 20/- each (previous year 2,21,62,500 (29.55%) equity share of -10/- each at a premium of - 20/- per share). M/s.Greenwoods Palaces & Resorts Pvt Ltd (SPV) is setting up a 5 Star Luxury hotel (Taj Santacruz) comprising of 279 rooms near Terminal 1C, Santacruz, Mumbai at Mumbai International Airport. The SPV is treated as a jointly controlled entity as per the Accounting Standards in vogue.

ii) Non-Trade Unquoted Investment was made in a company with which the Company entered into a power purchase agreement for supply of 3 million units of power or 5.65%of its actual generation whichever is less in order to comply with regulatory requirement for supply of such power.

2. Commitments and Contingent liabilities not provided for in respect of:

Commitments

Estimated amount ofcontracts remaining to be executed on capital account -16.30 Lacs (2014: -147.36 Lacs). Contingent liabilities not provided for in respect of (Rs in Lacs' PARTICULARS As at As at March 31,2015 March 31,2014

Sales tax matters 769.77 939.00

Income tax matters 304.16 153.08

Service tax matters 2490.88 2490.88

Wealth tax matters 31.69 31.69

Luxury tax matters 76.47 76.47

Probable customs duty payable on the Equipment Imported under Export

Promotion Capital Goods Scheme 487.18 487.18

Letters of Credit - 79.56

Bank Guarantees - Others 134.81 159.38

3. Deposits recoverable under Loans and Advances include the following amounts paid under protest:

i) - 295.89 lacs (- 124.14 lacs) paid under the VAT Act pertaining to financial years 2005-06 to 2012-13.

ii) - 147.09 lacs (- 86.40 lacs) paid under the Income Tax Act pertaining to financial years 2002-03 and 2005-06.

4. Due to inadequacy of the profits no commission to Managing Director was provided for the year and the Company is in the process of submitting an application to the Central Government for approval of minimum remuneration paid to the Managing Director and the Executive Director as per the terms of appointment, and to waive the excess remuneration paid to them. During the previous year Executive Chairman refunded the remuneration of - 410.69 lacs for the years 2008-09, 2010-11, 2011-12 and 2012-13 and the Company has withdrawn the application made to the Ministry of Company Affairs for waiver of remuneration paid in excess of the limits prescribed under Schedule XIII of the Companies Act, 1956, due to inadequacy of profits and the same has been considered as exceptional item.

5. i) Disclosure of Trade Payables under Current Liabilities is based on the information available with the Company regarding the status of the suppliers as defined under the "Micro, Small and Medium Enterprises Development (MSMED) Act, 2006".

ii) Details of total outstanding dues to Micro and Small Enterprises as per MSMED Act, 2006: (- in Lacs)

iii) Transactions in Foreign Currency

a) Earnings in Foreign Exchange -4163.46 Lacs (2014: -4698.84 Lacs)

As reported by the Company to the Ministry of Tourism / Government of India and as certified by the Management but not verified by the auditors

b) Expenditure in foreign currency:

PP. Related Parties Disclosure

Disclosures as required under Accounting Standard (AS) 18 "Related Party Disclosures" issued by the Institute of Chartered Accountants of India are given below:

a. Key Management personnel:

Name of the Related Party Relationship

Dr. G.V.Krishna Reddy Chairman

Mrs. G.Indira Krishna Reddy Managing Director

Mrs. Shalini Bhupal Executive Director

Green Woods Palaces and Resorts Pvt Ltd Jointly controlled entity

The Indian Hotels Company Limited Joint Venturer

b. Companies/Firms/Trust in which the key management and their relatives are interested:

Accura Constructions (P) Ltd

Accura Estates (P) Ltd

Alaknanda Hydro Power Co Ltd(*)

Amtran Constructions (P) Ltd

Bengaluru Airport & Infrastructure Developers Pvt.Ltd

Bengaluru International Airport Ltd(*)

Bonanza Real Estates (P) Ltd

Cygnus Real Estates (P) Ltd

Eagle Land Holdings (P) Ltd

GVK Gautami Power Ltd(*)

Goldgreen Land Holdings (P) Ltd

Green Woods Palaces & Resorts (P) Ltd

Greenridge Hotels & Resorts LLP GVK Airport Developers (P) Ltd

GVK Airport Holdings (P) Ltd

GVK Biosciences (P) Ltd(*)

GVK City (P) Ltd

GVK Coal (Tokisud) Co.(P) Ltd(*)

GVK Davix Research (P) Ltd

GVK Davix Technologies (P) Ltd

GVK Foundation GVK EMRI (UP) Pvt Ltd

GVK Informatics (P) Ltd.

GVK Janani Shishu Suraksha (UP) Pvt Ltd

GVK Energy Ltd(*)

GVK Energy Ventures (P) Ltd

GVK Estates Private Limited

GVK Industries Ltd(*)

GVK Jaipur Expressway Private Ltd(*)

GVK Natural Resources (P) Ltd(*)

GVK Oil & Gas Limited

GVK Power & Infrastructure Ltd(*)

GVK Power (Goindwal Sahib) Ltd(*)

(*) - companies with which there are transactions during the year

GVK Properties & Management Co.(P) Ltd(*)

GVK Projects & Technical Services Ltd.

GVK Technical Consultancy Services (P) Ltd(*)

GVK Ratle Hydro Electric Project Pvt Ltd(*)

GVK Virudhnagar SEZ (P) Ltd

Innovative Land Holdings (P) Ltd

Inogent Laboratories (P) Ltd(*)

GVK EMRI(b) Mallikarjuna Estates (P) Ltd

Mallikarjuna Finance (P) Ltd

Marriot Land Holdings (P) Ltd

Midas Estates (P) Ltd

Mumbai Airotropolis Pvt Ltd

Mumbai Airport Habitation Pvt Ltd

Navi Mumbai Airport Developers (P) Ltd

Mumbai Aviation Fuel Form Facility (P) Ltd

Mumbai International Airport (P) Ltd(*)

Novopan Industries Ltd

Nova Technical & Consultancy Services P Ltd.

Orbit Travel & Tours (P) Ltd(*)

Pace Constructions (P) Ltd

Paigah House Hotel (P )Ltd

Pinakini Share & Stock Brokers Ltd

Pinnacle Land Holdings (P) Ltd

Raghavendra Finance (P) Ltd

Rocktown Estates Pvt Ltd(*)

SR Finance (P) Ltd

Starlet Land Holdings (P) Ltd

Suphala Real Estates (P) Ltd

Vertex Projects Ltd

Volantis Land Holdings (P) Ltd

Vulcon Constructions (P) Ltd

6. Deferred Tax :

In accordance with the Accounting Standard 22 (AS-22) 'Accounting ior Taxes on Income' issued by the Institute oi Chartered Accountants oi India, the Company has provided ior deferred tax liability up to 31.03.2015 comprising oithe following components' (All amounts are - in lacs, unless otherwise stated)

7. Employee benefits:

Defined contribution plan:

Amount recognised as an expense in statement of profit and loss - 95.11 lacs (2014: - 93.37 lacs) on account of provident fund and - 46.95 lacs (2014: -49.75 lacs ) on account of Employee State Insurance.

Defined benefit plan:

The Company has a funded defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service as per the provision of the Payment of Gratuity Act,1972 with total ceiling on gratuity of -1,000,000/-

The Company's liability towards un-funded leave encashment is calculated by considering, each employee's, salary (last drawn salary) and accumulated un-utilised leave as at the reporting date.

The following tables summarize the components of net benefit recognized in the Statement of Profit and Loss and amounts recognized in the Balance Sheet for the respective employee benefit plans.

The estimates of future salary increases (which has been set in consultation with the company) takes on account inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

8. Disclosure of interest in jointly controlled entities:

i) The Company holds 48.99% (Previous year 29.55%) of the total share capital of M/s Green Woods Palaces & Resorts Pvt Ltd (Greenwoods), which is incorporated in India.

ii) The proportionate share of estimated contracts to be executed on capital account by Green Woods is - 2988.99 lacs (- 2487.55 lacs).

iii) The interest of the Company in Green Woods' assets and liabilities as required to be disclosed as per Accounting Standard 27, Financial Reporting of interests in Joint Ventures, is given below:

9. In the opinion of the Board of Directors of the company, the current assets, loans and advances are expected to realise in the ordinary course of business approximately the value at which they are stated in accounts.

10. Segmental Reporting:

The Company's only business being hoteliering, disclosure of segment-wise information is not applicable under Accounting Standard (AS) 17 "Segmental Information" 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. The Company has during the year adopted the useful lives prescribed under Schedule II to the Companies Act, 2015, except for those mentioned in note 2 (vii) to the financial statements. The transitional impact of depreciation amounting to -285.51 lacs on the opening block of fixed assets as of 1st April 2014 consequent to change in useful lives of certain assets as per Schedule II to the Companies act, 2015 is included in the depreciation charge for the year.

12. Previous Year's figures have been regrouped / rearranged, wherever necessary. Figures in brackets indicates those for previous year.

Mar 31, 2013

1. Deposits recoverable under Loans and Advances include the following paid under protest:

i) Rs.83.84 lacs paid under the VAT Act pertaining to financial years 2005-06 to 2008-09.

2. Other Commitments: The uncalled liability on account of acquisition of 1,95,37,500 shares of Rs.10/- each of Greenwoods Palaces & Resorts Pvt Ltd, Rs.13,67,62,500/-.

3. The Central Power Distribution Company Limited of Andhra Pradesh (CPDCL of AP) raised demands towards Fuel Surcharge Adjustment (FSA) of Rs.107.15 lacs for the financial years 2008-09 and 2009-10. The Hon''ble High Court of Andhra Pradesh, on a batch petition filed by various consumers, granted stay from collection of the same. Hence, no provision is made for such amount in the books of account. However, an amount of Rs.21.13 lacs has been paid under protest and shown under loans and advances.

i) Disclosure of Trade Payables under Current Liabilities is based on the information available with the Company regarding the status of the suppliers as defined under the "Micro, Small and Medium Enterprises Development Act, 2006" and relied upon by the Auditors.

ii) Details of total outstanding dues to Micro and Small Enterprises as per MSMED Act, 2006:

4. The Executive Chairman and Managing Director are entitled to commission @ 1% each of Net Profits computed in accordance with Section 349 of the Companies Act, 1956 after tax. Due to inadequacy of the profits no commission was provided for the year and the Company is in the process of submitting an application to the Central Government for approval of minimum remuneration as per the terms of appointment.

5. Additional information pursuant to provisions of paragraphs 3, 4 and 4D of Part II of Schedule VI of the Companies Act 1956.

6. Related Parties Disclosure

The Company does not have any holding company or companies controlling the company, as defined under Accounting Standard 18. The company does not have any subsidiary companies. Transactions with various companies related to the company by way of common directorships or firms in which directors are partners, are disclosed hereunder:

Key Management personnel:

Dr. G.V.Krishna Reddy Executive Chairman

Smt.G.Indira Krishna Reddy Managing Director

Smt.Shalini Bhupal Executive Director

Joint Venture with The Indian Hotels Company Limited

Jointly controlled entity Greenwoods Palaces and Resorts Pvt Ltd

Companies/Firms/Trust in which the key management and their relatives are interested:

Accura Constructions (P)

Ltd Accura Estates (P)

Ltd Alaknanda Hydro Power Co Ltd (*)

Allied Estates (P) Ltd

Amtran Constructions (P) Ltd

Anchor Estates (P) Ltd

Appease Estates Private Limited

Bengaluru Airport & Infrastructure Developers Pvt.Ltd

Bengaluru International Airport Ltd (*)

Blue Streak Land Holdings (P)

Ltd Bonanza Real Estates (P)

Ltd Caspian Capital & Finance (P)

Ltd Casuarina Capital & Finanace (P)

Ltd Classic Land Holdings (P)

Ltd Consolidated Real Estates (P)

Ltd Cygnus Real Estates (P)

Ltd Delta Land Holdings (P)

Ltd Dhaulasidh Power (P)

Ltd Eagle Land Holdings (P)

Ltd Fair Value Land Holdings (P)

Ltd Fortune Real Estates (P)

Ltd Fresenius Intraven (P)

Ltd GVK Gautami Power Ltd (*)

Genesis Realtors (P)

Ltd Goldgreen Land Holdings (P)

Ltd Goriganga Hydro Power Co.(P)

Ltd Greenwoods Land Holdings (P)

Ltd Greenwoods Palaces & Resorts (P) Ltd (*)

Greenridge Hotels and Resorts

LLP GVK Airport Developers (P)

Ltd GVK Airport Holdings (P) Ltd

GVK Biosciences (P) Ltd (*)

GVK City (P) Ltd

GVK Cements Pvt Ltd

GVK Coal (Tokisud) Co.(P) Ltd (*)

GVK Davix Research (P)

Ltd GVK Davix Technologies (P)

Ltd GVK Deoli Kota Expressway (P)

Ltd GVK Developmental Projects (P)

Ltd GVK Foundation (*)

GVK EMRI (UP) Pvt Ltd GVK Energy Holdings (P)

Ltd GVK Energy Ltd (*)

GVK Energy Ventures (P)

Ltd GVK Estates Private Limited GVK Hydel (P)

Ltd GVK Industries Ltd (*)

GVK Jaipur Expressway Private Ltd (*)

GVK Natural Resources (P) Ltd GVK Oil & Gas Limited (*)

GVK Perambalur SEZ (P) Ltd GVK Power & Infrastructure Ltd (*)

GVK Power (Goindwal Sahib) Ltd (*)

GVK Properties & Management Co.(P) Ltd

GVK Projects & Technical Services Ltd. (*)

GVK Technical & Consultancy Private Ltd (*)

GVK Ratle Hydro Electric Project Pvt Ltd (*)

GVK Transportation (P) Ltd (*)

GVK Virudhnagar SEZ (P) Ltd

Inc GVK Bio (P) Ltd

Innovative Land Holdings (P) Ltd

Inogent Laboratories (P) Ltd

GVK EMRI(*)

Mallikarjuna Estates (P) Ltd

Mallikarjuna Finance (P) Ltd

Marriot Land Holdings (P) Ltd

Metro Architects & Contractors (P) Ltd

Midas Estates (P) Ltd

Mumbai Airotropolis Pvt Ltd

Mumbai Airport Habitation Pvt Ltd

Navi Mumbai Airport Developers (P) Ltd

Mumbai Aviation Fuel Form Facility (P) Ltd

Mumbai International Airport (P) Ltd (*)

Novopan Industries Ltd (*)

Orbit Travel & Tours (P) Ltd (*)

Oxford Land Holdings (P) Ltd

Pace Constructions (P) Ltd

Pace Estates (P) Ltd

Paigah House Hotel (P )Ltd

Parthasarathy A/c Tourists (P) Ltd

Pinakini Share & Stock Brokers Ltd

Pinnacle Land Holdings (P) Ltd

Raghavendra Finance (P) Ltd

Raghavendra Land Holdings (P) Ltd

Regulus Estates (P) Ltd

Rocktown Estates Pvt Ltd(*)

Seregarha Mines Limited

SR Finance (P) Ltd

Starlet Land Holdings (P) Ltd

Suphala Real Estates (P) Ltd

Vertex Infratech (P) Ltd

Vertex Projects Ltd

Volantis Land Holdings (P) Ltd

Vulcon Constructions (P) Ltd

Zinger Investments (P) Ltd

(*) - companies with which there are transactions during the year

7. Deferred Tax:

In accordance with the Accounting Standard 22 (AS-22) ''Accounting for Taxes on Income'' issued by the Institute of Chartered Accountants of India, the company has provided for deferred tax liability up to 31.03.2013 comprising of the following components.

8. Disclosure of interest in jointly controlled entities:

i) The Company holds 26.05% (Previous year 21.06%) of the total share capital of M/s Greenwoods Palaces & Resorts Pvt Ltd (Greenwoods), which is incorporated in India.

ii) The share of contracts to be executed on capital account of the Company in Greenwoods is Rs.1159.60 lacs (Rs.775.34 lacs).

iii) The interest of the Company in Greenwoods'' assets and liabilities as required to be disclosed as per Accounting Standard 27, Reporting of interests in Joint Ventures, is given below:

9. In the opinion of the Board of Directors of the company, the current assets, loans and advances are expected to realise in the ordinary course of business approximately the value at which they are stated in accounts.

10. Previous Year''s figures have been regrouped / rearranged, wherever necessary. Figures in brackets indicates those for previous year.

Mar 31, 2012

I) Term Loans from banks

Rs 90 crores from Housing Development Finance Corporation Limited secured by first charge on all assets of Taj Krishna & Taj Deccan is repayable in 32 equal instalments after 2 years from date of each disbursement. First instalment payable in June 2012. Interest at a weighted average rate of 11.15% p.a with an annual reset clause

Rs 72 crores from HDFC Bank Ltd secured by first charge on all assets of Taj Club House, Chennai is repayable in 32 equal instalments after 2 years from date of each disbursement. First instalment payable in June 2012. Interest at a weighted average rate of 11.40% p.a with an annual reset clause

ii) Loans from related parties

Rs 5 crores from The Indian Hotels Company Limited repayable in July 2013. Interest at a rate of 7% p.a

i) Secured loans - Bank overdraft

Rs 6,60,64,046/- from Hongkong and Shanghai Banking Corporation Ltd secured by first charge on all assets of Taj Chandigarh at an interest rate of 10.75% p.a

Rs 2,71,33,594/- from IDBI Bank Ltd secured by hypothecation of Operating Supplies, Stores, Food & Beverages and Receivables at an interest rate of 12.25% p.a

ii) Unsecured loans

Loan from the Bank of Nova Scotia for a tenure of 67 days from the drawal date at an interest rate of 11.90% p.a

i) The Non-Trade Unquoted Investment are made in a company with which the Company entered into a power purchase agreement for supply of 3 million units of power or 5.65% of its actual generation whichever is less in order to comply with regulatory requirement for supply of such power.

ii) The Company has acquired 1,58,00,000 Equity Shares (21.06% of total shares issued) of Rs10/- each (Rs3/- paid up) of Greenwoods Palaces & Resorts Pvt Ltd from M/s Greenridge Hotels and Resorts Pvt Ltd at a premium of Rs 20/- per share. The Company is setting up a 5 Star Deluxe (Luxury category) Hotel Project comprising of 275 rooms near Terminal 1C, Santacruz, Mumbai at Mumbai International Airport, under the 'TAJ' brand with M/s. Greenridge Hotels & Resorts Private Limited (a GVK Company) through its SPV M/s. Green Woods Palaces & Resorts Private Limited. As per the MOU signed with M/s Greenridge, the Company is entitled to acquire upto 49% stake in the SPV. As per the conditions of the share holders' agreement, the same is treated as a jointly controlled entity as per the Accounting Standards in vogue.

1. Contingent liabilities not provided for in respect of :

(Rs in lacs) Sl. Particulars As at As at No. 31-03-2012 31-03-2011

i. Sales Tax matters 169.45 169.45

ii. Income Tax matters 7.60 86.41

iii. Service Tax matters 23.65 23.65

iv. Excise duty 3.21 -

v. Probable customs duty payable on the Equipment Imported under Export Promotion Capital Goods Scheme 487.18 613.74

vi. Letters of Credit - 224.31

vii. Bank Guarantees - Others 153.26 140.43

viii.Estimated amount of contracts remaining to be executed on capital account. 274.10 2422.66

ix. Telephone charges in dispute with BSNL 13.73 13.73

2. Deposits recoverable under Loans and Advances include the following paid under protest:

i) Rs 83.84 lacs paid under the VAT Act pertaining to financial years 2005-06 to 2008-09.

3. Other Commitments: The uncalled liability on account of acquisition of 1,58,00,000 shares of Rs10/- each of Greenwoods Palaces & Resorts Pvt Ltd, Rs 11,06,00,000/-

4. i) Disclosure of Trade Payables under Current Liabilities is based on the information available with the Company regarding the status of the suppliers as defined under the "Micro, Small and Medium Enterprises Development Act, 2006" and relied upon by the Auditors.

ii) Details of total outstanding dues to Micro and Small Enterprises as per MSMED Act, 2006:

5. The Executive Chairman and Managing Director are entitled to commission @ 1% each of Net Profits computed in accordance with Section 349 of the Companies Act, 1956 after tax. Due to inadequacy of the profits no commission was provided for the year and the Company is in the process of submitting an application to the Central Government for approval of minimum remuneration as per the terms of appointment.

6. Disclosure of interest in jointly controlled entities:

i) The Company holds 21.06% (Previous year NIL) of the total share capital of M/s Greenwoods Palaces & Resorts Pvt Ltd (Greenwoods), which is incorporated in India.

ii) The share of contracts to be executed on capital account of the Company in Greenwoods is Rs 775.34 lacs as of 31.03.2012.

7. In the opinion of the Board of Directors of the company, the current assets, loans and advances are expected to realise in the ordinary course of business approximately the value at which they are stated in accounts.

8. Previous Year's figures have been regrouped / rearranged, wherever necessary. Figures in brackets indicates those for previous year.

Mar 31, 2011

1. Contingent liabilities not provided for in respect of :

Rs. in lacs

Sl. Particulars As at As at No. 31-03-2011 31-03-2010

i. Sales Tax matters 169.45 135.86

ii. Income-tax matters 86.41 86.41

iii. Service Tax matters 23.65 Ã

iv. Probable customs duty payable on the Equipment Imported under Export Promotion Capital Goods Scheme 126.56 144.69

v. Letters of Credit 224.31 11.08

vi. Bank Guarantees-Others 140.43 453.22

vii. Estimated amount of contracts remaining to be executed on capital account. 2422.66 3080.55

viii. Telephone charges in dispute with BSNL 13.73 13.73

2. None of the suppliers informed the Company regarding their status under Micro, Small and Medium Enterprises Development Act, 2006. Accordingly, dues to the suppliers under this Act could not be furnished.

3. Balances in current accounts under Cash and Bank balances include Rs.150.47 lacs (Rs. 139.20 lacs) on account of unclaimed dividends.

4. MANAGERIAL REMUNERATION :

Computation of Profit under Section 349 of the Companies Act, 1956

The Executive Chairman and Managing Director are entitled to commission @ 1% each of Net Profits computed in accordance with Section 349 of the Companies Act, 1956 after tax. Due to inadequacy of the profits no commission was provided for the year and the Company is in the process of submitting an application to the Central Government for approval of minimum remuneration as per the terms of appointment.

5. Deposits recoverable under Loans and Advances include the following paid under protest:

i) Rs. 86.41 lacs, Rs. 18.77 lacs and Rs. 6.96 lacs paid under the Income Tax Act pertaining to A.Y 2003-04, A.Y 2007-08 and A.Y 2008-09 respectively.

ii) Rs. 45.12 lacs paid under the VAT Act pertaining to financial years 2005-06 to 2008-09.

6. The Company has subscribed to 18000 Equity Shares of Rs. 10/- each of Green Infra Windfarms Limited, with whom the Company entered into a power purchase agreement for supply of 3 million units of power or 5.65% of its actual generation whichever is less in order to comply with regulatory requirement for supply of such power.

7. Additional information pursuant to provisions of paragraphs 3, 4 and 4D of Part II of Schedule VI of the Companies Act 1956.

8. a) Related Parties Disclosures

The Company does not have any holding Company or Companies controlling the Company, as defined under Accounting Standard 18. The Company does not have any subsidiary Companies. Transactions with various Companies related to the Company by way of common directorships or firms in which directors are partners, are disclosed hereunder:

Key Management personnel:

Dr. G.V.Krishna Reddy Executive Chairman

Smt.G.Indira Krishna Reddy Managing Director

Smt.Shalini Bhupal Executive Director

Joint Venture with

Companies/Firms/Trust in which the key management

and their relatives are interested:

Accura Constructions (P) Ltd

Accura Estates (P) Ltd

Alaknanda Hydro Power Co Ltd (*)

Allied Estates (P) Ltd

Altitude Design & Development (P) Ltd

Amtran Constructions (P) Ltd

Anchor Estates (P) Ltd

Appease Estates Private Limited

Bengaluru Airport & Infrastructure Developers Pvt.Ltd (*)

Bengaluru International Airport Ltd (*)

Blue Streak Consultants (P) Ltd

Blue Streak Land Holdings (P) Ltd

Bonanza Real Estates (P) Ltd

Caspian Capital & Finance (P) Ltd

Casuarina Capital & Finanace (P) Ltd

Classic Land Holdings (P) Ltd

Consolidated Real Estates (P) Ltd

Cygnus Real Estates (P) Ltd

Delta Land Holdings (P) Ltd

Dhaulasidh Power (P) Ltd

Eagle Land Holdings (P) Ltd

Fair Value Land Holdings (P) Ltd

Fortune Real Estates (P) Ltd

Fresenius Intraven (P) Ltd

Gautami Power Ltd (*)

Genesis Realtors (P) Ltd

GIKR Land Holdings (P) Ltd

Goldgreen Land Holdings (P) Ltd

Goriganga Hydro Power Co.(P) Ltd

Greenridge Hotels & Resorts(P)Ltd

The Indian Hotels Company Limited

JK Operation & Maintainance (P) Ltd

KR Bhupal Land Holdings (P) Ltd

KRAMB Land Holdings (P) Ltd

KRBSB Estates Private Limited

KRGV Land Holdings (P) Ltd

Krishna Enterprises

Lakshmi Enterprises

Lepus Land Holdings (P) Ltd

Mallikarjuna Estates (P) Ltd

Mallikarjuna Finance (P) Ltd

Marine Developers

Marine Enterprises

Marine Estates

Marriot Land Holdings (P) Ltd

Marwell Architects & Contractors (P) Ltd

Metro Architects & Contractors (P) Ltd

Midas Estates (P) Ltd

MMR Constructions

MR Constructions

MRK Constructions

Mumbai Airport Developers (P) Ltd

Mumbai Aviation Fuel Form Facility (P) Ltd

Mumbai International Airport (P) Ltd (*)

Mystique Jewellery & Accessories P Ltd

Novopan Industries Ltd (*)

Orbit Travel & Tours (P) Ltd (*)

Oxford Land Holdings (P) Ltd

Pace Constructions (P) Ltd

Pace Estates (P) Ltd

Paigah House Hotel (P )Ltd

GSR Land Holdings (P) Ltd

GVK Airport Developers (P) Ltd

GVK Airport Holdings (P) Ltd

GVK Biosciences (P) Ltd (*)

GVK Cements Pvt Ltd (*)

GVK City (P) Ltd

GVK Coal (Tokisud) Co.(P) Ltd (*)

GVK Davix Research (P) Ltd

GVK Davix Technologies (P) Ltd

GVK Developmental Projects (P) Ltd

GVK Foundation (*)

GVK Energy Holdings (P) Ltd

GVK Energy Ltd (*)

GVK Enterprises

GVK Estates Private Limited

GVK Hydel (P) Ltd

GVK Industries Ltd (*)

GVK Jaipur Expressway Private Ltd (*)

GVK Power (Jegurupadu) Pvt Ltd

GVK Oil & Gas Limited (*)

GVK Perambalur SEZ (P) Ltd

GVK Power & Infrastructure Ltd (*)

GVK Power (Goindwal Sahib) Ltd (*)

GVK Power (Krishnapatnam) (P) Ltd

GVK Power (Ratlam) Private Ltd

GVK Properties & Management Co.(P) Ltd (*)

GVK Projects & Technical Services Ltd.

GVK Technical & Consultancy Private Ltd

GVK Transportation (P) Ltd

GVK Virudhnagar Sez (P) Ltd

IKR Land Holdings (P) Ltd

Inc GVK Bio (P) Ltd

Indigo Enterprises

Indigo Estates

Indira Constructions

Indira Enterprises

Innovative Land Holdings (P) Ltd

Inogent Laboratories (P) Ltd (*)

ISR Infrastructure

Parthasarathy A/c Tourists (P) Ltd

Patikari Power Private Ltd

Pinakini Share & Stock Brokers Ltd

Pinnacle Land Holdings (P) Ltd

Plateau Construction & Engg.(P) Ltd

Plateau Land Holdings (P) Ltd

Raghavendra Finance (P) Ltd

Raghavendra Land Holdings (P) Ltd

Regulus Estates (P) Ltd

Revatha Aqua Mineral (P) Ltd

RK Estates

S.Bhupal & Others

SBSR Land Holdings (P) Ltd

Sheraton Estates (P) Ltd (*)

SHSB Land Holdings (P) Ltd

Siregraha Mines Limited

SOMKRB Land Holdings (P) Ltd

SR Finance & Others

SR Finance (P) Ltd

Sri Hari Developers

Sri Hari Enterprises

Sri Hari Estates

Sri Lakshmi Enterprises

Sri Parvathi Enterprises

Sri Shiva Enterprises

Sri Venkateswara Enterprises

Sri Vishnu Enterprises

Starlet Land Holdings (P) Ltd

Sunshine Properties (P) Ltd

Suphala Real Estates (P) Ltd

TRG Constructions

Trinity Advisors (P) Ltd

Ubiquitous Infratech (P) Ltd

Verdura

Vertex Infratech (P) Ltd

Vertex Projects Ltd

Volantis Land Holdings (P) Ltd

Vulcon Constructions (P) Ltd

Zinger Investments (P) Ltd

(*) - Companies with which there are transactions during the year

9. The company operates a post retirement benefit plan for gratuity.

10. In the opinion of the Board of Directors of the company, the current assets, loans and advances are expected to realise in the ordinary course of business approximately the value at which they are stated in accounts.

11. Previous Years figures have been regrouped / rearranged, wherever necessary. Figures in brackets indicates those for previous year

Mar 31, 2010

1. Contingent liabilities not provided for in respect of:

Rs.in lacs SI. Particulars As at As at No. 31-03-2010 31-03-2009 i. Sales Tax matters 135.86 71.80 ii. Income-tax matters 86.41 86.41 iii. Probable customs duty payable on the Equipment Imported under Export Promotion Capital Goods Scheme against which Bank Guarantees of Rs.72.34 lacs are given. (Previous Year: Rs.107.81 lacs) 144.69 215.62 iv. Letters of Credit 11.08 283.09 v. Bank Guarantees-Others 453.22 482.07 vi. Estimated amount of contracts remaining to be executed on capital account. 3080.55 1013.07 vii. Telephone charges in dispute with BSNL 13.73 -

2. None of the suppliers informed the Company regarding their status under Micro, Small and Medium Enterprises Development Act, 2006. Accordingly, the dues to the supplier under this Act and interest payable, if any could not be furnished.

3. Balances in current accounts under Cash and Bank balances include Rs.139.20 lacs (Rs. 119.29 lacs) on account of unclaimed dividends.

4. MANAGERIAL REMUNERATION :

Computation of Profit under Section 349 of the Companies Act, 1956

The Executive Chairman and Managing Director are entitled to commission @ 1% each of Net Profits computed in accordance with Section 349 of the Companies Act, 1956 after tax. Due to inadequacy of the profits no commission was provided for the year and the Company has submitted an application to the Central Government for approval of minimum remuneration as per the term of appointment.

5. Deposits recoverable under Loans and Advances include the following being paid under protest: i) Rs.86.41 lacs paid under the Income Tax Act pertaining to A.Y 2003-04.

ii) Rs.32.64 lacs paid under the VAT Act pertaining to the years 2005-06 to 2008-09

6. The Company has subscribed to 18000 Equity Shares of Rs.10/- each of Green Infra Windfarms Limited, with whom the Company entered into a power purchase agreement for supply of 3 million units of power or 5.65% of its actual generation whichever is less in order to comply with regulatory requirement for supply of such power.

7. Additional information pursuant to provisions of paragraphs 3, 4 and 4D of Part II of Schedule VI of the Companies Act 1956.

i) As per the Order No.46/179/2008 CL - III dated 17/06/2008 issued by the Department of Company Affairs, the Company has been exempted from giving the quantitative details of turnover in respect of supply of Food & Beverages, Liquors & Wines and Accomodation.

11. a) Related Parties Disclosures

The Company does not have any holding company or companies controlling the company, as defined under Accounting Standard 18. The company does not have any subsidiary companies. Transactions with various companies related to the company by way of common directorships or firms in which directors are partners, are disclosed hereunder:

Key Management personnel:

Sri C.V.Krishna Reddy Executive Chairman

Smt.G.Indira Krishna Reddy Managing Director

Smt.Shalini Bhupal Executive Director

Joint Venture with The Indian Hotels Company Limited (*)

Companies/Firms/Trust in which the key management and their relatives are interested:

Accura Constructions (P) Ltd Accura Estates (P) Ltd Alaknanda Hydro Power Co Ltd (*) Allied Estates (P) Ltd (*) Altitude Design & Development (P) Ltd Amtran Constructions (P) Ltd Anchor Estates (P) Ltd Appease Estates Private Limited Blue Streak Consultants (P) Ltd Blue Streak Land Holdings (P) Ltd Bonanza Real Estates (P) Ltd Caspian Capital & Finance (P) Ltd Casuarina Capital & Finanace (P) Ltd Classic Land Holdings (P) Ltd Consolidated Real Estates (P) Ltd Cygnus Real Estates (P) Ltd Delta Land Holdings (P) Ltd Dhaulasidh Power (P) Ltd Eagle Land Holdings (P) Ltd Fair Value Land Holdings (P) Ltd Fortune Real Estates (P) Ltd Fresenius Intraven (P) Ltd Gautami Power (samalkot) Private Ltd Gautami Power Ltd (*) Genesis Realtors (P) Ltd GIKR Land Holdings (P) Ltd Goldgreen Land Holdings (P) Ltd Goriganga Hydro Power Co.(P) Ltd Green Woods Golf & Resorts (P) Ltd Greenridge Hotels &Resorts(P)Ltd GSR Land Holdings (P) Ltd GVK Airport Developers (P) Ltd GVK Airport Holdings (P) Ltd GVK Aviation (P) Ltd GVK Biosciences (P) Ltd (*) GVK Cements Ltd GVK City (P) Ltd GVK Coal (Tokisud) Co.(P) Ltd (*) GVK Davix Research (P) Ltd (*) GVK Davix Technologies (P) Ltd GVK Developmental Projects (P) Ltd GVK Foundation (*) GVK Energy Holdings (P) Ltd GVK Energy Ltd GVK Estates Private Limited GVK Hydel (P) Ltd GVK Industries Ltd (*) GVK Infrastructure Holdings (P) Ltd. GVK Infratech (P) Ltd GVK Jaipur Expressway Private Ltd (*) GVK Oil & Gas Limited (*) GVK Perambalur SEZ (P) Ltd ISR Infrastructure Jegurupadu Power Plant Services (P) Ltd JK Operation & Maintainance (P) Ltd KR Bhupal Land Holdings (P) Ltd KRAMB Land Holdings (P) Ltd KRBSB Estates Private Limited KRGV Land Holdings (P) Ltd Krishna Enterprises Lakshmi Enterprises Lepus Land Holdings (P) Ltd Mallikarjuna Estates (P) Ltd Mallikarjuna Finance (P) Ltd Marine Developers Marine Enterprises Marine Estates Marriot Land Holdings (P) Ltd Marwell Architects & Contractors (P) Ltd Metro Architects & Contractors (P) Ltd Midas Estates (P) Ltd MMR Constructions MR Constructions MRK Constructions Mumbai Airport Developers (P) Ltd Mumbai International Airport (P) Ltd (*) Mystique Jewellery & Accessories P Ltd Novopan Industries Ltd (*) Orbit Travel & Tours (P) Ltd (*) Oxford Land Holdings (P) Ltd Pace Constructions (P) Ltd Pace Estates (P) Ltd Paigah House Hotel (P )Ltd Parthasarathy A/c Tourists (P) Ltd Patikari Power Private Ltd Pinakini Share & Stock Brokers Ltd Pinnacle Land Holdings (P) Ltd Plateau Construction & Engg.(P) Ltd Plateau Land Holdings (P) Ltd Raghavendra Finance (P) Ltd Raghavendra Land Holdings (P) Ltd Regulus Estates (P) Ltd Revatha Aqua Mineral (P) Ltd RK Estates S.Bhupal & Others (*) SBSR Land Holdings (P) Ltd Sheraton Estates (P) Ltd (*) SHSB Land Holdings (P) Ltd Siregraha Mines Limited SOMKRB Land Holdings (P) Ltd , SR Finance & Others SR Finance (P) Ltd Sri Hari Developers Sri Hari Enterprises GVK Power & Infrastructure Ltd (*) GVK Power & Infrastructure Private Ltd GVK Power (Goindwal Sahib) Ltd (*) GVK Power (Krishnapatnam) (P) Ltd (*) GVK Power (Ratlam) Private Ltd GVK Properties & Management Co.(P) Ltd (*) GVK Projects Ltd GVK Technical & Consultancy Private Ltd (*) GVK Virudhnagar Sez (P) Ltd IKR Land Holdings (P) Ltd Inc GVK Bio (P) Ltd Indigo Enterprises Indigo Estates Indira Constructions Indira Enterprises (*) Innovative Land Holdings (P) Ltd Inogent Laboratories (P) Ltd (*) Sri Hari Estates Sri Lakshmi Enterprises Sri Shiva Enterprises Sri Venkateswara Enterprises Sri Vishnu Enterprises Starlet Land Holdings (P) Ltd Sunshine Properties (P) Ltd Suphala Real Estates (P) Ltd TRG Constructions Trinity Advisors (P) Lid Ubiquitous Infratech (P) Ltd Verdura Vertex Infratech (P) Ltd Vertex Projects Ltd Volantis Land Holdings (P) Ltd Vulcon Constructions (P) Ltd Zinger Investments (P) Ltd

(*) Companies with which there are transactions during the year

8. In the opinion of the Board of Directors of the company, the current assets, loans and advances are expected to realise in the ordinary course of business approximately the value at which they are stated in accounts.

9. Previous Years figures have been regrouped / rearranged, wherever necessary. Figures in brackets indicates those for previous year.

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