Mar 31, 2023
# There is no change in value of investment as company has not provided foreign exchange loss/ gain on amount invested in foreign currency as provision for impairment of investment is provided for full value of investment.
Notes:
(a) The Company presently holds 100% interest in Fineline Hospitality & Consultancy Pte Ltd. (FHCPL), which in turn holds 80% stake in Lexon Hotels Venture Ltd., Mauritius (Lexon); and Lexon in turn holds 99.76% interest in Leading Hotels Limited (Leading). Leading is developing an all Villa Hotel Complex at Goa and an 18 hole, 72 par Championship Golf Course. The said project will be under the management of Four Seasons, a world famed hotel chain and hospitality management company.
(b) In respect of Ultimate Subsidiary company, i.e., Leading Hotels Limited, an Order under section 7 of Insolvency & Bankruptcy Code 2016, read with rule 4 of the Insolvency & Bankruptcy (Application to Adjudicating Authority) Rules, 2016 was passed on June 25, 2021 for initiating Corporate Insolvency Resolution Process (CIRP). Due to the uncertainty related to realisation of amount from the insolvency process the value of investment was fully impaired during the FY 2020-21 by creation of provision for diminution in the value of the investment.
8 - TAXATION - DEFERRED TAX ...contd.
III. Deferred Tax relates to the following...contd. :
Note :- Deferred Tax Asset is not recognised during the financial year on additional business loss / unabsorbed depreciation following the concept of prudence. Deferred Tax Assets created till March 31,2020 have not been reversed as the Company has made operational profits during FY 2022-23 and the Management has drawn plans for further improving profitability including increase of profitability through business lines such as Commercial Real Estate Sales, infusion of funds etc and settlement with the lenders. Accordingly, recognition of any additional Deferred Tax Asset in future shall be dependent on achieving / improving profitability in line with the relevant Accounting Standards. In case the standard is not met, the amount of Deferred Tax Asset outstanding in the books of account shall be reversed.
(b) Terms / rights attached to equity shares:
The Company has only one class of equity shares having a par value of Rs. 10 per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividend in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting. For the year ended 31st March, 2023, the amount of per share dividend proposed as distribution to equity shareholders is Nil (31st March, 2022: Rs. Nil). In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.
As per records of the Company, including its register of shareholders/members and other declarations received from shareholders regarding beneficial interest, the above shareholding represents both legal and beneficial ownerships of shares.
* Yes Bank Limited invoked the pledge on the shares of the Company & during the FY 2022-23, Yes bank Limited has transfered all credit facilities including shareholding in the Company to M/s J C Flowers Assets Reconstruction Pvt. Ltd (âARCâ). The Company has challenged the said invocation & transfer / assignment of credit facilities by Yes Bank Limited to the ARC and that this matter is subjudice before Hon''ble Delhi High Court.
(i) As a fallout of the COVID-19 in India in April 2020, the RBI had issued Resolution Framework for One Time Restructuring (âOTRâ). In accordance to the same, the financial institution lenders (5 No.s) entered into a Inter-Creditor Agreement on 23rd December, 2020 invoking the resolution process. As per the Guidelines, once the resolution is invoked, it needs to be implemented within 6 months, i.e., by June 09, 2021. The OTR is for obtaining extension in repayment of principal, reduction in interest rates and conversion of accrued interest into Funded Interest Term Loans (âFITLâ). Summary of Revised Interest Rates & Repayment terms are summarized below.
(ii) The Company has been unable to repay Installments due till March 31,2023 as per OTR Sanction letter issued by the respective banks amounting to Rs. 12,976.67 Lakhs (in aggregate for all banks taken together) and interest payment amounting to Rs. 7,723.94 Lakhs (in aggregate for all banks taken together) The delay has been due to non-receipt of NOC for such sale from the lender banks despite several reminders.
iii) During FY 2022-23 YBL assigned all credit facilities to JC Flower Assets Reconstruction Pvt. Ltd. pursuant to assignment agreement dated December 16, 2022. Other lender also issued loan recall notices & initiated recovery action under SARFAESI Act, 2002. Company has argued the said assignment by YBL & recovery actions of other lenders are inconsistent with Interim order passed by the Hon''able Delhi High Court vide order dated 24/02/2022. Hon''able Delhi High Court directed all lender to comply with the order dated 24/02/2022 & stay all recovery actions.
As the future outcome is uncertain, in line with the Inter Creditor Agreement as stated above, the company has accounted all Credit Facilities from lenders as per OTR sanctioned letter issued by them.
Nature of security and terms of repayment for secured current financial liabilities-borrowings:
(a) DBS Bank Limited -External Commercial Borrowings
ECBs carry interest @ 4.50% p.a. plus 6 months LIBOR / ARR (as per revised RBI Regulaations) and are secured by first pari passu charge of land & building of Hotel Hyatt Regency Delhi and unsold area of New Tower Block A in Hyatt Regency Delhi, first pari passu charge on movable fixed assets (Excluding vehicles, windmills and power saving equipment), first pari passu charge on current assets (Present and Future), personal guarantee of Mr. Shiv Kumar Jatia (Resigned from Chairman & Managing Director w.e.f 22nd October, 2021) & Chairman & Managing Director (Mr. Amritesh Jatia) and pledge of shares representing Company''s investment in foreign subsidiary company. External commercial borrowings are repayable as under: (i) USD 161.67 Lakhs is payable in 16 unequal half yearly instalments till March, 2030; (ii) USD 175.40 Lakhs is payable in 11 unequal half yearly instalments till March, 2030.
- The Company has been unable to repay the Installments amounting to USD 47.95 Lakhs due till March 31, 2023.
All the Above mentioned Loans (Both Term Loans & FITL) are secured by:- First pari passu charge of land & building of Hotel Hyatt Regency Delhi
- Pari passu charge of unsold area of New Tower Block A in Hyatt Regency Delhi (1st to 6th Floor except 3000 sq ft at 6th Floor) & Cash Flow thereon
- First pari passu charge on movable fixed assets (Excluding Wind Mills, vehicles and power saving equipment), first pari passu charge on current assets (Present and Future)
- Personal guarantee of Mr. Shiv Kumar Jatia (Resigned from Chairman & Managing Director w.e.f 22nd October, 2021) & Chairman & Managing Director (Mr. Amritesh Jatia)
- Pledge of shares representing Company''s investment in foreign subsidiary company on pari passu basis.
- The Company has been unable to repay Installments as per OTR Sanction letter due till March 31, 2023 amounting to INR 3,702.87 Lakhs (principal) and INR 2,719.82 Lakhs (interest) issued by the bank on account of NOC not provided by lenders.
*Pari Passu charge of unsold area of New Tower Block A in Hyatt Regency (1st to 6th Floor) not part of sanction from the lender
All the Above mentioned Loans (Both Term Loans & FITLs) are secured by:- First pari passu charge of land & building of Hotel Hyatt Regency Delhi
- First pari passu charge of unsold area of New Tower Block A in Hyatt Regency Delhi (1st to 6th Floor) & Receivable from the sale/lease.
- First pari passu charge on movable fixed assets (Excluding vehicles and power saving equipment), first pari passu charge on current assets.
- Personal guarantee of Mr. Shiv Kumar Jatia (Resigned from Chairman & Managing Director w.e.f 22th October, 2021) & Chairman & Managing Director (Mr. Amritesh Jatia)
- Pledge of shareholding of Mr. Shiv Kumar Jatia (Resigned from Chairman & Managing Director w.e.f 22th October, 2021), entities controlled by him, Asian Holding Private Limited & Other group Companies (total amounting to 7.29%) in the Company Invoked during FY 2021-22 by Yes Bank Limited.
- First pari passu Pledge of shares representing Company''s investment in foreign subsidiary company.
- Charge over two power generation units of 3MW (including its Cashflows) situated at Maharashtra.
i) Company has been unable to repay installments due till March 31, 2023 amounting to INR 2,247.15 Lakhs (principal) and INR 1,863.21 Lakhs (Interest) as per OTR Sanction letter issued by the bank on account of inability to monetize CRE Assets located in hotel premises.
ii) Yes Bank Limited has issued (''YBL'') âLoan Recall- Cum- Guarantee Invocation Noticeâ dated 17th February, 2022 & demanded that the Company should repay entire Term loan, Interest Funded Term Loans & Overdraft facilities. In addition, the Bank also invoked the Fixed Deposits provided by Asian Holding Private Limited (Rs. 500 Lakhs) and has exercised pledge on shareholding of Mr. Shiv Kumar Jatia, entities controlled by him, Asian Holding Private Limited & Other group Companies (total amounting to 7.29%) in the Company.
iii) The Company has challenged this action in Delhi High Court & that the Hon''ble High Court has granted stay on âLoan Recall-Cum- Guarantee Invocation Noticeâ vide Order Dated 24/02/2022. As per Clause 6.2 of the Inter Creditor Agreement signed between the lenders dated 6th August 2020, the Resolution Plan, that is approved by the Majority Lenders, shall be final and binding on all the Lenders (each Lender agrees and undertakes to be bound by the approved Resolution Plan and to the resolution process and its consequent implementation that has been approved by the Majority Lenders). In accordance with this Agreement and the August 6, 2020 Framework, the Lenders have agreed that, except as provided in Clause 11.4, they shall not initiate any legal action or proceedings (including proceedings under IBC) against the Borrower or any other Person that may jeopardise the successful implementation of the Resolution Plan in accordance with the terms of such Resolution Plan.
All the Above mentioned Loans (Both Term Loan & FITL) are secured by:- First pari passu charge of land & building of Hotel Hyatt Regency Delhi
- First pari passu charge of unsold area of New Tower Block A in Hyatt Regency Delhi
- First pari passu charge on Cashflows of the Company.
- First pari passu charge on movable fixed assets (Excluding vehicles and power saving equipment), first pari passu charge on
current assets (Present and Future)
- Personal / corporate guarantee of Mr. Shiv Kumar Jatia (Resigned from Chairman & Managing Director w.e.f 22th October, 2021) & Chairman & Managing Director (Mr. Amritesh Jatia)
- Pledge of shareholding of Mr. Shiv Kumar Jatia (Resigned from Chairman & Managing Director w.e.f 22th October, 2021), entities controlled by him, Asian Holding Private Limited & Other group Companies (total amounting to 0.16%) in the Company.
- First pari passu Pledge of shares representing Company''s investment in foreign subsidiary company.
- The Company has been unable to repay Installment as per OTR Sanction letter issued by the bank due till March 31, 2023 amounting to INR 2,169.02 Lakhs (principal) and INR 1,485.74 Lakhs (interest) on account of non receipt of NOC from lenders.
(e) Exclusive Capital Limited (Assigned from IndusInd Bank Limited)
IndusInd Bank Limited which was not initially part of OTR Scheme has during FY 2021-22 agreed for One time restructuring of all Credit facilities vide Sanction Letter dated 16th December, 2021. During the year credit facilities of IndusInd Bank Limited were assigned to Exclusive Capital Limited vide assignment agreement dated December 28, 2022. Company has not yet received any communication from Exclusive Capital Limited regarding the revision to the said terms, hence, terms as per OTR scheme agreed with Indusind Bank is applied for accounting & disclosure purposes.
All the Above mentioned Loans (Both Term Loan & FITL) are secured by:- First pari passu charge of existing and future land & building of Hotel Hyatt Regency Delhi
- First pari passu charge on movable fixed assets (Excluding vehicles and power saving equipment), first pari passu charge on current assets (Present and Future)
- Pari passu charge of unsold area of New Tower Block A and cashflow thereon
- First pari passu charge on current Assets of the company both present and future.
- Pari passu charge of unsold area of New Tower Block A and Cashflow thereon and cashflow from the sale of 40,000 Sq.
ft area of Shopping Arcade located in Hyatt Regency Delhi.
- First pari passu charge on all cashflow of the company.
- Personal guarantee of Mr. Shiv Kumar Jatia (Resigned from Chairman & Managing Director w.e.f 22nd October, 2021) &
Chairman & Managing Director (Mr. Amritesh Jatia)
- First pari passu Pledge of shares representing Company''s investment in foreign subsidiary company.
- The Company has been unable to repay Installment as per OTR Sanction letter issued by the bank due till March 31, 2023 amounting to INR 1,575.45 Lakhs (principal) and INR 995.33 Lakhs (interest) on account of non receipt of NOC from lenders.
(f) Kotak Mahindra Prime Limited -Rupee loan for acquisition of vehicles (carries interest @ 7.78% per annum) is secured against hypothecation of the vehicle financed by the loan. Balance repayable in monthly instalments up to April 2023.
The aggregate values of the vehicle loans outstanding from Kotak Mahindra Prime Ltd is Rs. 3.36 Lakhs as at March 31,2023.
(g) Toyota Financial Services India Ltd - Rupee loan for acquisition of a vehicle (carried interest @ 7.74% per annum) is secured against hypothecation of the vehicle financed by the loan. Balance repayable in monthly instalments up to April, 2023.
The aggregate values of the vehicle loans outstanding from Toyota Financial Services India Ltd is Rs. 0.67 Lakhs as at March 31, 2023.
Nature of security and terms of repayment for secured current financial liabilities-borrowings:
(a) Yes Bank Limited
- Overdraft facilities (carried interest @ 9.85 % per annum)
- Yes Bank Limited -FITL I OD (carried interest @ 10.55 % per annum) - Bullet repayment on March, 2023
Both facilities are secured by
- First pari passu charge of land & building of Hotel Hyatt Regency Delhi
- First pari passu charge of unsold area of New Tower Block A in Hyatt Regency Delhi (1st to 6th Floor except 3000 sq ft at
6th Floor) & Receivable from the sale/lease.
21 - CURRENT FINANCIAL LIABILITIES - BORROWINGS...contd.
- First pari passu charge on movable fixed assets (Excluding vehicles and power saving equipment), first pari passu charge on current assets
- Personal guarantee of Mr. Shiv Kumar Jatia (Resigned from Chairman & Managing Director w.e.f 22th October, 2021) & Chairman & Managing Director (Mr. Amritesh Jatia)
- Pledge of shareholding of Mr. Shiv Kumar Jatia, entities controlled by him, Asian Holding Private Limited & Other group Companies (total amounting to 7.2%) in the Company.
- First pari passu Pledge of shares representing Company''s investment in foreign subsidiary company.
- Charge over two power generation units of 3MW (including its Cashflows) situated at Maharashtra.
- Presently the OD is overdrawn by Rs. 1300.05 Lakhs.
- Refer Notes under Note 18 above
(b) Axis Bank Limited - Overdraft facilities (carried interest @ 11.65% per annum) and is secured by :-
- first pari passu charge of land & building of Hotel Hyatt Regency Delhi and unsold area of New Tower Block A in Hyatt Regency Delhi,
- first pari-passu charge on the Land and Building pertaining to the existing Hotel complex.
- first pari passu charge on movable fixed assets (Excluding vehicles, windmills and power saving equipment), first pari passu charge on current assets (Present and Future),
- personal guarantee of Mr. Shiv Kumar Jatia (Resigned from Chairman & Managing Director w.e.f 22th October, 2021) & Chairman & Managing Director (Mr. Amritesh Jatia),
- pledge of shares representing Company''s investment in foreign subsidiary company
- Presently the OD is in default & discussion is going with bank to settle the same.
(c) Exclusive Capital Limited - Overdraft facilities & FITL (OD) (Assigned from IndusInd Bank Limited)
IndusInd Bank Limited which was not initially part of OTR Scheme has during FY 2021-22 agreed for One time restructuring of all Credit facilities vide Sanction Letter dated 16th December, 2021. During the year credit facilities of IndusInd Bank Limited assigned to Exclusive Capital Limited vide assignment agreement dated December 28, 2022. The Company is yet to receive communication from Exclusive Capital Limited, accordingly, the terms as per OTR scheme agreed with Indusind Bank is applied for accounting & disclosure purposes.
All the Above mentioned Credit facilities are secured by:- First pari passu charge of existing and future land & building of Hotel Hyatt Regency Delhi
- First pari passu charge on movable fixed assets (Excluding vehicles, windmills and power saving equipment), first pari
passu charge on current assets (Present and Future)
- First pari passu charge on current Assets of the company both present and future.
- Pari passu charge of unsold area of New Tower Block A and Cashflow thereon.
- First pari passu charge on all cashflows of the company.
- Fixed Deposit of Rs. 600.00 Lakhs to be held as exclusive collateral and will be provided by Personal guarantors as per schedule provided by IndusInd Bank.
- Personal guarantee of Mr. Shiv Kumar Jatia (Resigned from Chairman & Managing Director w.e.f 22nd October, 2021) and Chairman & Managing Director (Mr. Amritesh Jatia)
- First pari passu Pledge of shares representing Company''s investment in foreign subsidiary company.
- Presently the OD is in default & discussion is going with Exclusive Capital Limited to settle the same.
NOTES ANNEXED TO AND FORMING PART OF THE STANDALONE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH, 2023 (Rs. In Lakhs) |
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33 - CONTINGENT LIABILITIES AND COMMITMENTS |
As at 31-03-2023 |
As at 31-03-2022 |
(a) Claims against the Company not acknowledged as debts * * pertains to cases filed by certain employees of the Company (b) Service tax demand not provided for * |
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*Appeal filed by AHNL before Supreme Court against Customs, Excise and Service Tax Appellate Tribunal (CESTAT) demand for Rs. 2,14,61,690/- |
214.62 |
214.62 |
(c) Additional bonus liability for the financial year 2014-15 owing to amendment made in "The Payment of Bonus Act, 1965" w.r.e.f. 1st April, 2014, has not been provided for as the matter is subjudice before various High Courts in the country. (d) Relating to an accident in the hotel premises, a writ petition has been filed with Delhi High Court by a relative of the injured person, and the Company has been made one of the respondents. The same relative has also filed a consumer complaint/petition, before the National Consumer Dispute Redressal Commission (NCDRC), against the Hyatt Hotels Corporation, Chicago and Hotel Hyatt Regency, Delhi, seeking compensation for the above injured person on various counts. Any consequence on the outcome of the above writ petition and the Consumer complaint before the NCDRC can not be ascertained. |
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(e) The Company has received a demand Notice from the Asstt. Assessor & Collector (HQ), South Delhi Municipal Corporation, New Delhi (SDMC) dated 20/02/2022, on account of Property Tax (including interest and penalty) for the years 2004-05 to 2019-20 . The matter of Property Tax in the case of Company and many other similarly situated entities is sub-judice before the Hon''ble High Court of Delhi. The Company has been depositing Property Tax as per order dated 23.5.2014 of the Hon''ble High Court. The Company has been advised that the said demand notice is contrary to the prior orders passed by the Hon''ble High Court, and therefore Company is in the process of taking appropriate legal recourse in the said matter. (f) Termination of Space Buyer Agreement (SBA) |
9,459.56 |
3,725.29 |
The Company has received Rs. 1,89,00,000/- under the SBA for Property- Unit number 1005 admeasuring approximately 750 sq. ft. super area situated on the 1 st Floor of the Block A- New Tower situated at District Centre, Bhikaji Cama Place, R. K. Puram, New Delhi. The Company has called upon for balance payment i.e. Rs. 47,25,000/- but party defauled for such payment & Company terminated SBA. Party has filed suit for specific performance seeking relief for value of Rs. 2,36,25,000/-case is pending in Delhi High Court |
189.00 |
189.00 |
(g) The Company has let out the commercial property Premises unit No. 404, 405 & 406 on 4th floor of Block-A "Hyatt Regency Complex" situated at District Centre, Bhikaji Cama Place, R. K. Puram, New Delhi. The tenant was defaulted in rent payment & demanding its security deposit of Rs. 54,70,206/-. The Tenant has moved to the Hon''ble Delhi High Court for refund of security deposit along with interest @18% p.a. The Company has made counter claim for Rs. 2,60,51,560/-. |
54.70 |
54.70 |
(h) Income Tax Matters against which appeal filed before Appellate Authority. Considering the facts of the matters, management is of the view that there will not be any material impact on accounts on finalization appeal. |
1,290.87 |
1,329.20 |
(i) Deposit for Car Parking of Apartment Tower Vistrat Real Estates Private Limited has issued demand notice for refund of refundable security deposit. The matter is pending for arbitration. (Refer Notes to Accounts 23 - Current - Other Financial Liabilities) (j) Rental Expenses related terminated lease agreements |
1,500.00 |
1,500.00 |
The company has terminated Lease agreements of Apartments. Due to such termination Rent Expenses not provided for from April, 2020 till March, 2022. Some parties have litigated such termination & demanded payment of monthly lease rental. |
1,677.60 |
1,434.32 |
33 - CONTINGENT LIABILITIES AND COMMITMENTS |
As at 31-03-2023 |
As at 31-03-2022 |
(k) Shopping Arcade The Company has terminated the license agreement of shopping arcade located |
180.13 |
180.13 |
in premises of hotel & ask to vacate the same with the time provided. Parties has disputed the same. Now matter is subjudice. Management is confident that they will able get shops vacated. (l) Commitment Charges Commitment Charges to various parties not booked on account of litigation & |
936.27 |
123.61 |
discussion going on with parties for waiver of the same. Company expecting outcome of litigation will be in favour of company & able to secure waiver letter from other parties. (m) TDS related dues appearing on TRACES portal (subject to reconciliation and |
13.62 |
3.79 |
adjustment) Notes: COMMITMENTS (a) Estimated amount of contracts remaining to be executed on capital account and not |
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provided for: (b) Future commitments in respect of assets acquired under Finance Schemes: Minimum instalments payable within one year |
4.06 |
53.78 |
later than one year but not later than five years |
- |
4.06 |
Present value of minimum instalments payable within one year |
4.04 |
51.61 |
later than one year but not later than five years |
- |
4.04 |
The Company operates only in one major reportable segment, i.e. Hospitality / Hotel Business. Other business segments i.e. power generation operations & Real Estate operations are governed by different set of risks and returns. However, the respective revenue streams and net profit / (loss) related to those segments though not material for disclosure purposes as separate reportable segment, but, as per condition laid down by Lenders of the Company in One Time Restructuring (OTR) Scheme, the Company is required to give a separate disclosure for the same in the financial statements. Accordingly, in compliance with conditions laid down by the said lenders, the Company has done Segment reporting for Hospitality / Hotel Business, power generation operations & Real Estate operations respectively.
35. DISCLOSURES AS REQUIRED BY INDIAN ACCOUNTING STANDARD (IND AS) 19 EMPLOYEE BENEFITS
The Company has classified the various benefits provided to employees as under:-
(a) Defined contribution plans -Provident fund
The Company has recognized the following amounts in the statement of profit and loss:
Employers'' contribution to provident fund :- Current Year Rs. 194.41 Lakhs (Previous Year Rs. 156.62 Lakhs)
(b) Defined benefit plans
- Gratuity
- Compensated absences - Earned leave
In accordance with Indian Accounting Standard 19, actuarial valuation was done in respect of the aforesaid defined benefit plans based on the following assumptions-Economic Assumptions
The discount rate and salary increases assumed are the key financial assumptions and should be considered together; it is the difference or ''gap'' between these rates which is more important than the individual rates in isolation.
The discounting rate is based on the gross redemption yield on medium to long term risk free investments. The estimated term of the benefits/obligations works out to zero years. For the current valuation a discount rate of 7.36% p.a. (Previous Year 7.18% p.a.) compound has been used.
Salary Escalation Rate
The salary escalation rate usually consists of at least three components, viz. regular increments, price inflation and promotional increases. In addition to this any commitments by the management regarding future salary increases and the Company''s philosophy towards employee remuneration are also to be taken into account. Again a long-term view as to trend in salary increase rates has to be taken rather than be guided by the escalation rates experienced in the immediate past, if they have been influenced by unusual factors.
36. CORPORATE SOCIAL RESPONSIBILITY
Pursuant to the provisions of section 135(5) of the Companies Act, 2013 (the Act), the Company has formed its Corporate Social Responsibility (CSR) Committee. As per the relevant provisions of the Act read with Rule 2(1)(f) of the Companies (Corporate Social Responsibility Policy) Rules, 2014, the Company is required to spend at least 2% of the average net profits determined under section 198 of the Companies Act 2013 during the immediately three financial years. However, due to inadequacy of profits as per Section 198 of the Companies Act, 2013, the company is not required to spend any amount on CSR activities for Financial Year 2022-23.
Gross amount required to be spent by the Company during the year: Rs. NIL (Previous year - Rs. NIL)
The fair values of the financial assets and liabilities are 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.
The following methods and assumptions were used to estimate the fair values:
1. Fair values of cash and short term deposits, trade and other short term receivables, trade payables, other current liabilities, short term loans from banks and other financial institutions approximate their carrying amounts largely due to short-term maturities of these instruments.
2. Financial instruments with fixed and variable interest rates are evaluated by the Company based on parameters such as interest rates and individual credit worthiness of the counterparty. Based on the evaluation, allowances are taken to account for the expected losses of these receivables.
The company uses the following hierarchy for determining and disclosing the fair values of financial instruments by valuation technique:
Level 1 : Quoted (unadjusted) prices in active markets for identical assets or liabilities.
Level 2 : Other techniques for which all inputs which have a significant effects on the recorded fair value are observable, either directly or indirectly.
Level 3 : Techniques which use inputs that have a significant effects on the recorded fair value that are not based on observable market data.
The Company''s financial risk management is an integral part of how to plan and execute its business strategies. The company''s financial risk management policy is set by the Managing Board.
Market risk
Market risk is the risk of loss of future earnings, fair values or future cash flows that may result from a change in the price of a financial instrument. The value of a financial instrument may change as a result of changes in the interest rates, foreign currency exchange rates, equity prices and other market changes that affect market risk sensitive instruments. Market risk is attributable to all market risk sensitive financial instruments including investments and deposits, foreign currency receivables, payables and loan borrowings.
The Company manages market risk through a treasury department, which evaluates and exercises independent control over the entire process of market risk management. The treasury department recommends risk management objectives and policies, which are approved by Senior Management and the Audit Committee. The activities of this department include management of cash resources, implementing hedging strategies for foreign currency exposures, borrowing strategies, and ensuring compliance with market risk limits and policies.
Interest rate risk
Interest rate risk is the risk that fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. In order to optimize the company''s position with regards to the interest income and interest expenses and to manage the interest rate risk, treasury performs a comprehensive corporate interest rate risk management by balancing the proportion of fixed rate and floating rate financial instruments in it total portfolio.
The company is not exposed to significant interest rate risk as at the specified reporting date.
Refer Note 18 and Note 21 for interest rate profile of the Company''s interest-bearing financial instrument at the reporting date. Foreign currency risk
The Company operates locally, however, the nature of its operations requires it to transact in several currencies and consequently the Company is exposed to foreign exchange risk in various foreign currencies.
The Company evaluates exchange rate exposure arising from foreign currency transactions and the Company follows established risk management policies.
I. Foreign Currency Exposure
Refer Note 37 for foreign currency exposure as at March 31, 2023 and March 31, 2022 respectively.
Credit risk arises from the possibility that counter party may not be able to settle their obligations as agreed. To manage this, the Company periodically assesses the financial reliability of customers, taking into account the financial condition, current economic trends, and analysis of historical bad debts and ageing of accounts receivable. Individual risk limits are set accordingly.
The Company considers the probability of default upon initial recognition of asset and whether there has been a significant increase in credit risk on an ongoing basis throughout each reporting period. To assess whether there is significant increase in credit risk the company compares the risk of a default occurring an the asset at the reporting date with the risk of default as the date of initial recognition. It considers reasonable and supportive forwarding-looking information such as:
(i) Actual or expected significant adverse changes in business,
(ii) Actual or expected significant changes in the operating results of the counterparty.
(iii) Financial or economic conditions that are expected to cause a significant change to the counterparty''s ability to mere its obligation,
(iv) Significant increase in credit risk on other financial instruments of the same counterparty.
(v) Significant changes in the value of the collateral supporting the obligation or in the quality of third-party guarantees or credit enhancements.
Financial assets are written off when there is no reasonable expectation of recovery, such as a debtor failing to engage in a repayment plan with the Company. The Company categorizes a loan or receivable for write off when a debtor fails to make contractual payments greater than 2 years past due. Where loans or receivables have been written off, the Company continues to engage in enforcement activity to attempt to recover the receivable due. Where recoveries are made, these are recognized in profit or loss.
IV. Provision for expected credit losses again âIIâ and âIIIâ above
The company has assets where the counter- parties have sufficient capacity to meet the obligations and where the risk of default is very low. Hence based on historic default rates, the Company believes that, no impairment allowance is necessary in respect of above mentioned financial assets.
Liquidity Risk
Liquidity Risk is defined as the risk that the company will not be able to settle or meet its obligations on time or at reasonable price. The company''s treasury department is responsible for liquidity, funding as well as settlement management. In addition, processes and policies related to such risks are overseen by senior management. Management monitors the company''s net liquidity position through rolling forecast on the basis of expected cash flows.
For the purposes of the Company''s capital management, capital includes issued capital and all other equity reserves. The primary objective of the Company''s Capital Management is to maximize shareholder value. The company manages its capital structure and makes adjustments in the light of changes in economic environment and the requirement of the financial covenants.
*Revaluation Reserve of Rs. 40,407.36 Lakhs (Rs. 41,348.25 Lakhs in FY 2021-22) is considered as part of Shareholder''s equity for the purpose of calculation of ratios.
Remarks for change in ratio by more than 25% with respect to previous year :-Current Ratio
There is improvement in ratio due to increase in current assets as there is improvement in business operations.
Debt - Equity Ratio
Ratio is adverse because of continuous increase in Debts (due to capitalization of Interest & Creation of FITL) and decrease in Equity due to continuous loss.
Debt Service Coverage Ratio
Ratio is adverse as company unable to generate enough cash to service its outstanding Debts. There improvement in ratio due to recovery in the business.
Trade receivables turnover ratio
Ratio has become more favourable as compared to previous year because last year due COVID- 19 pandemic operations of hotels & restaurants halted for some months in last year which resulted in delay in collection from corporate clients.
42. Additional Regulatory Information ...contd.
Inventory Turnover Ratio
Ratio has become more favourable as compared to previous year because last year due COVID- 19 pandemic operations of hotels & restaurants closed for substantial period during year which resulted in ineffective utilization of inventory.
Trade payables turnover ratio
Due to cash crunch company has been unable to repay its operational creditors which resulted in adverse ratio overall. There is improvement during the year due to recovery of business during the year.
Net capital turnover ratio
Ratio is negative because Working capital of the company is negative & the ratio has become more adverse because working capital pressure is more and the current liabilities exceed current assets by a higher amount during the current year as compared to the last year.
Net profit ratio
Ratio is adverse due to losses incurred by company. There is improvement in ratio as company has made operational profit during the year.
Return on capital employed (ROCE)
- There is improvement in ratio as compared to last year due improvement in EBIT.
(i) Registration of charges or satisfaction with Registrar of Companies (ROC)
The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.
(ii) Details of Benami Property held :
The Company does not have any Benami property, which any proceeding has been initiated or pending against the Company for holding any Benami property.
(iii) Borrowings secured against current assets
The Company has borrowings from banks on the basis of security of current assets. Currently OD limits are out of order & negotiation is going on with bankers to restructure the same.
(iv) Utilisation of borrowed funds and share premium :
The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or
(b) provide any guarantee, security or the like to or behalf of the Ultimate Beneficiaries.
The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the group shall:
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or
(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
(v) Utilisation of borrowings availed from banks and financial institutions
The borrowings obtained by the Company financial institutions have been applied for the purposes for which such loans were taken.
(vi) Wilful defaulter
The Company has not been declared wilful defaulter by any bank or financial Institution or other lender.
(vii) Relationship with struck off companies
The Company did not have any transactions with Companies struck off u/s companies Act, 2013 or Companies Act, 1956.
(viii) Compliance with number of layers of companies
The Company had complied with the number of layers prescribed under the Section 2(87) of the Act read with the Companies ( Restriction on number of Layers ) Rules,2017.
(ix) Compliance with approved scheme(s) of arrangements
The Company has not entered into any scheme of arrangement which has an accounting impact on current or previous financial year.
(x) Undisclosed income
The Company does not have any transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the income Tax Act,1961 (such as, search or survey or any other relevant provision of the Income Tax Act,1961).
(xi) Loans or advances to specified persons
The Company has not granted loans or advances to promoters, directors, key management personnel and the related parties (as defined under Companies Act, 2013) either severally or jointly with any other person, that are: (a) repayable on demand or (b) without specifying any terms or period of repayment.
(xii) Details of crypto currency or virtual currency
The Company has not traded or invested in Crypto currency or Virtual Currency during the current or previous years.
(xiii) Valuation of Property, Plant and Equipment, intangible assets and investment property
The Company has not revalued its property, plant and equipment (including right-of-use assets) or intangible assets or both during the current or previous year.
(xiv) Title deeds of immovable properties not held in name of the Company
The title deeds of immovable properties (other than immovable properties where the Company is the lessee and the leases agreements are duly executed in favour of the company) are held in the name of the Company.
The Company has not provided for Commitment charge worth Rs. 755.26 Lakhs in respect of Space Buying Agreement signed with various parties as the Company is confident of securing waivers / settlement from them for the same.
Note 44: Loss of Control over Foreign Subsidiaries
In respect of foreign subsidiaries, i.e., M/s Fineline Hospitality & Consultancy Pte Ltd. (FHCPL) & M/s Lexon Hotels Venture Ltd., Mauritius (Lexon) notice for appointment of liquidator has been accepted by the competent authority in Mauritius. As a result of the same, the Company has lost control of these entities. Accordingly, the Company will not be presenting Consolidated Financial Statements for FY 2022-23.
Note: 45 : Current State of Business Operations and Ability to Continue as Going Concern
The Company''s financial statements are prepared on a going concern basis, which contemplates the utilization of assets and the satisfaction of obligations in the normal course of business. While impact of COVID is still felt, operating profitability for the Company is improving significantly and it will be further aided by several cost reduction measures being adopted by the Company. The Company is in amicable discussions with Banks and Financial Institutions, to resolve financial matters in the best interest for bankers as well as shareholders. The Management is confident that its planned financial settlement will enable the Company to continue as a going concern.
Note: 46 : Regrouped, Recast, Reclassified
Figures of the earlier year have been regrouped or reclassified to confirm to Ind AS presentation requirements.
Mar 31, 2018
1 SEGMENT REPORTING
The Company operates only in one reportable segment, i.e. Hospitality/Hotel Business at one location, namely New Delhi (India). The other business segment, i.e. power generation, though governed by different sets of risks and returns, however, is not a reportable segment as defined under the Indian Accounting Standard In AS - 108 "Operating Segments", and therefore, no separate disclosures have been made. The assets, liabilities and revenues relating to the said power generation business have, however, been disclosed in the accounts separately. The above treatment is in accordance with the guiding principles enunciated in the said In AS.
2. DISCLOSURES AS REQUIRED BY INDIAN ACCOUNTING STANDARD (IND AS) 19 EMPLOYEE BENEFITS
The Company has classified the various benefits provided to employees as under:-
(a) Defined contribution plans
- Provident fund
The Company has recognized the following amounts in the statement of profit and loss:
Employersâ contribution to provident fund :- Current Year Rs. 198.63 Lakhs (Previous Year Rs. 197.56 Lakhs)
(b) Defined benefit plans
- Gratuity
- Compensated absences - Earned leave
In accordance with Indian Accounting Standard 19, actuarial valuation was done in respect of the aforesaid defined benefit plans based on the following assumptions-
Economic Assumptions
The discount rate and salary increases assumed are the key financial assumptions and should be considered together; it is the difference or ''gap'' between these rates which is more important than the individual rates in isolation.
Discount Rate
The discounting rate is based on the gross redemption yield on medium to long term risk free investments. The estimated term of the benefits/obligations works out to zero years. For the current valuation a discount rate of 7.71% p.a. (Previous Year 7.50% p.a.) compound has been used.
Salary Escalation Rate
The salary escalation rate usually consists of at least three components, viz. regular increments, price inflation and promotional increases. In addition to this any commitments by the management regarding future salary increases and the Company''s philosophy towards employee remuneration are also to be taken into account. Again a long-term view as to trend in salary increase rates has to be taken rather than be guided by the escalation rates experienced in the immediate past, if they have been influenced by unusual factors.
3. CORPORATE SOCIAL RESPONISIBILITY
Pursuant to the provisions of section 135(5) of the Companies Act, 2013 (the Act), the Company has formed its Corporate Social Responsibility (CSR) Committee. As per the relevant provisions of the Act read with Rule 2(1)(f) of the Companies (Corporate Social Responsibility Policy) Rules, 2014, the Company is required to spend at least 2% of the average net profits determined under section 198 of the Companies Act 2013 during the immediately three financial years. However, due to inadequacy of profits as per Section 198 of the Companies Act, 2013, the company is not required to spend any amount on CSR activities for Financial Year 2017-18.
Gross amount required to be spent by the Company during the year: Rs. NIL (Previous year - Rs. NIL)
4 RELATED PARTY DISCLOSURES AS PER INDIAN ACCOUNTING STANDARD-24 (a) Related Parties
- Subsidiaries Fineline Hospitality & Consultancy Pte Limited
Lexon Hotel Ventures Limited Leading Hotels Limited
- Key Management Personnel Mr. Shiv Kumar Jatia Chairman & Managing Director
Ms. Anita Thapar Whole Time Director
Mr. Amritesh Jatia Non-Executive Director
Mr. Dipendra B Goenka Non-Executive Director
Mr. Dinesh Kumar Jain Company Secretary
Mr. Lalit Bhasin Independent Director
Mr. Dinesh Chandra Kothari Independent Director
Mr. Pinaki Misra Independent Director
Mr. Ranjan Kishore Bhattacharya Independent Director
Mr. Prakash Chandra Sharma Chief Financial Officer
- Relative of Key Management Mr. Amritesh Jatia Director and son of Mr. Shiv Kumar Jatia Personnel Mrs. Archana Jatia Wife of Mr. Shiv Kumar Jatia
Mr. Ramesh Jatia Brother of Mr. Shiv Kumar Jatia
- Entities controlled by Directors or Ascent Hotels Private Limited their relatives Basin & Co.
(with whom transactions entered Binaural Tea Company Private Limited into during the financial year) Energy Infrastructure (I) Limited
Magus Estates & Hotels Limited Godfrey Philips India Limited
42. FINANCIAL INSTRUMENTS - ACCOUNTING CLASSIFICATIONS AND FAIR VALUE MEASUREMENTS
The fair values of the financial assets and liabilities are 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.
The following methods and assumptions were used to estimate the fair values:
1. Fair values of cash and short term deposits, trade and other short term receivables, trade payables, other current liabilities, short term loans from banks and other financial institutions approximate their carrying amounts largely due to short-term maturities of these instruments.
2. Financial instruments with fixed and variable interest rates are evaluated by the Company based on parameters such as interest rates and individual credit worthiness of the counterparty. Based on the evaluation, allowances are taken to account for the expected losses of these receivables.
The company uses the following hierarchy for determining and disclosing the fair values of financial instruments by valuation technique:
Level 1 : Quoted (unadjusted) prices in active markets for identical assets or liabilities.
Level 2 : Other techniques for which all inputs which have a significant effects on the recorded fair value are observable, either directly or indirectly.
Level 3 : Techniques which use inputs that have a significant effects on the recorded fair value that are not based on observable market data.
43. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES ...contd.
The Company manages market risk through a treasury department, which evaluates and exercises independent control over the entire process of market risk management. The treasury department recommends risk management objectives and policies, which are approved by Senior Management and the Audit Committee. The activities of this department include management of cash resources, implementing hedging strategies for foreign currency exposures, borrowing strategies, and ensuring compliance with market risk limits and policies.
Interest rate risk
Interest rate risk is the risk that fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. In order to optimize the company''s position with regards to the interest income and interest expenses and to manage the interest rate risk, treasury performs a comprehensive corporate interest rate risk management by balancing the proportion of fixed rate and floating rate financial instruments in it total portfolio.
The company is not exposed to significant interest rate risk as at the specified reporting date.
Refer Note 19 and Note 22 for interest rate profile of the Companyâs interest-bearing financial instrument at the reporting date. Foreign currency risk
The Company operates locally, however, the nature of its operations requires it to transact in in several currencies and consequently the Company is exposed to foreign exchange risk in various foreign currencies.
The Company evaluates exchange rate exposure arising from foreign currency transactions and the Company follows established risk management policies.
I. Foreign Currency Exposure
Refer Note 41 for foreign currency exposure as at March 31, 2018 and March 31, 2017 respectively.
II. Foreign Currency Sensitivity
1% increase or decrease in foreign exchange rates will have the following impact on the profit before tax Credit risk arises from the possibility that counter party may not be able to settle their obligations as agreed. To manage this, the Company periodically assesses the financial reliability of customers, taking into account the financial condition, current economic trends, and analysis of historical bad debts and ageing of accounts receivable. Individual risk limits are set accordingly.
The Company considers the probability of default upon initial recognition of asset and whether there has been a significant increase in credit risk on an ongoing basis throughout each reporting period. To assess whether there is significant increase in credit risk the company compares the risk of a default occurring an the asset at the reporting date with the risk of default as the date of initial recognition. It considers reasonable and supportive forwarding-looking information such as:
(i) Actual or expected significant adverse changes in business,
(ii) Actual or expected significant changes in the operating results of the counterparty.
(iii) Financial or economic conditions that are expected to cause a significant change to the counterparty''s ability to mere its obligation,
(iv) Significant increase in credit risk on other financial instruments of the same counterparty.
(v) Significant changes in the value of the collateral supporting the obligation or in the quality of third-party guarantees or credit enhancements.
Financial assets are written off when there is no reasonable expectation of recovery, such as a debtor failing to engage in a repayment plan with the Company. The Company categorizes a loan or receivable for write off when a debtor fails to make contractual payments greater than 2 years past due. Where loans or receivables have been written off, the Company continues to engage in enforcement activity to attempt to recover the receivable due. Where recoveries are made, these are recognized in profit or loss.
IV. Provision for expected credit losses again "II" and "III" above
The company has assets where the counter- parties have sufficient capacity to meet the obligations and where the risk of default is very low. Hence based on historic default rates, the Company believes that, no impairment allowance is necessary in respect of above mentioned financial assets.
Liquidity Risk
Liquidity Risk is defined as the risk that the company will not be able to settle or meet its obligations on time or at reasonable price. The company''s treasury department is responsible for liquidity, funding as well as settlement management. In addition, processes and policies related to such risks are overseen by senior management. Management monitors the company''s net liquidity position through rolling forecast on the basis of expected cash flows.
Maturity profile of financial liabilities
The table below provides details regarding the remaining contractual maturities of financial liabilities at the reporting date based on contractual undiscounted payments.
5. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES ...contd.
Capital management
For the purposes of the Companyâs capital management, capital includes issued capital and all other equity reserves. The primary objective of the Companyâs Capital Management is to maximize shareholder value. The company manages its capital structure and makes adjustments in the light of changes in economic environment and the requirement of the financial covenants.
The company monitors capital using gearing ratio, which is total debt divided by total capital plus debt.
6. Regrouped, Recast, Reclassified
Figures of the earlier year have been regrouped or reclassified to conform to In AS presentation requirements.
The accompanying notes are integral part of the financial statements
Mar 31, 2017
Nature of security and terms of repayment for secured current financial liabilities-borrowings:
1. DBS Bank Limited -External commercial borrowings (carried interest @ 3.25% p.a. plus LIBOR ) are secured by first pari passu charge of land & building of Hotel Hyatt Regency Delhi and New Tower Block A in Hyatt Regency Delhi (excluding 3,000 sq ft on 6th floor), first pari passu charge on movable fixed assets (Excluding vehicles, windmills and power saving equipment), first pari passu charge on current assets (Present and Future); personal guarantee of Chairman & Managing Director, pledge of shares representing Company''s investment in foreign subsidiary company. External commercial borrowings are repayable as under: (i) USD 60.99 Lakhs is payable in 21 unequal half yearly installments till March, 2030; (ii) USD 160.50 Lakhs is payable in 21 unequal half yearly installments till March, 2030 and; (iii) USD 279.28 Lakhs is payable in 21 unequal half yearly installments till March, 2030.
2. Axis Bank Limited - Rupee Term loan of Rs. 15,652.69 Lakhs (carried interest @ 11.70%-12.00% per annum) is secured by first pari passu charge of land & building of Hotel Hyatt Regency Delhi and New Tower Block A in Hyatt Regency Delhi (excluding 3,000 sq ft on 6th floor); first pari passu charge on movable fixed assets (Excluding vehicles, windmills and power saving equipment), first pari passu charge on current assets (Present and Future), personal guarantee of Chairman & Managing Director, pledge of shares representing Company''s investment in foreign subsidiary company. This loan has been obtained for the purpose of re-financing of existing loans. The loan is repayable in unequal 40 quarterly installments till March, 2030.
4. IDBI Bank Limited - Rupee Loan Rs. 5,700 Lakhs (carried interest @12.50% to 13.00% per annum) was secured by first pari-passu charge on land and building of existing Hotel block (Hyatt Regency Delhi); unconditional and irrevocable personal guarantee of Chairman & Managing Director and pledge of 15% shares of company''s one of the subsidiary. This loan was repayable in 18 unequal quarterly installments which commenced from October 01, 2015 and was repaid during the year.
5. Kotak Mahindra Bank Limited) - Rupee loan Rs. 1,224.21 Lakhs (carried interest @ 11.00-11.70% per annum) is secured by exclusive charge mortgage on 3000 sq. ft. of sixth floor of New Tower Block A in Hyatt Regency Delhi and personal guarantee of Chairman and Managing Director, repayable in 38 unequal monthly installments, up to May 2020.
6. Yes Bank Limited - Rupee loan of Rs. 5,266.25 Lakhs (carried interest @ 10.50% per annum) is secured by first pari passu charge of land & building of Hotel Hyatt Regency Delhi and New Tower Block A in Hyatt Regency Delhi (excluding 3,000 sq ft on 6th floor); first pari passu charge on movable fixed assets (Excluding vehicles and power saving equipment), first pari passu charge on current assets (Present and Future) and personal guarantee of Chairman & Managing Director. The loan is repayable in 39 unequal quarterly installments till July, 2030.
7. Yes Bank Limited - Rupee loan of Rs. 11,708.61 Lakhs (Amount Sanctioned Rs. 12,500 Lakhs) (carried interest @ 10.95% per annum) is secured by first pari passu charge of land & building of Hotel Hyatt Regency Delhi and New Tower Block A in Hyatt Regency Delhi (excluding 3,000 sq ft on 6th floor); first pari passu charge on movable fixed assets (Excluding vehicles and power saving equipment), first pari passu charge on current assets (Present and Future) and personal guarantee of Chairman & Managing Director. The loan is repayable in 40 structured quarterly installments till December, 2030.
8. Bank of Maharashtra (Term Loan I) of Rs. 19,775 Lakhs (carried interest @ 10.95% to 11.25% floating with monthly rests) -is secured by 1st Pari Passu charge on land and building of Hotel Hyatt Regency & personal guarantee of the Chairman & Managing Director. The loan is payable in 48 unequal quarterly installments commencing October, 2018.
9 Bank of Maharashtra (Term Loan II) of Rs. 4,366 Lakhs (carried interest @ 10.95% to 11.50% floating with monthly rests) -is secured by 1st Pari Passu charge on land and building of Hotel Hyatt Regency & personal guarantee of the Chairman & Managing Director. The loan is payable in 48 unequal quarterly installments commencing October, 2018.
10. ICICI Bank-Rupee loan (carried interest @ 11.41% per annum) is secured against hypothecation of 16 vehicles. Balance was repayable in monthly installments up to June 2016. This loan has been paid in full during the financial year ended 31st March, 2017.
11. ICICI Bank-Rupee loan (carried interest @ 9.84% per annum) is secured against hypothecation of 8 vehicles. Balance repayable in monthly installments up to December, 2020.
12. ICICI Bank-Rupee loan (carried interest @ 9.35% per annum) is secured against hypothecation of a vehicle. Balance repayable in monthly installments up to June, 2021.
The aggregate values of the vehicle loans from ICICI Bank aggregate to Rs. 169.97 Lakhs.
13. Kotak Mahindra Bank Limited)- Rupee loan for business of generation of electricity (carried interest @ 11.65% to 12.10% per annum) was secured by first charge and /or hypothecation of freehold land, plant & machinery and book-debts pertaining to the windmill situated at Sinner in Maharashtra and personal guarantee of Chairman & Managing Director. Balance was repayable in 3 equal installment up to October 2016. This loan has been repaid in full during the year.
14. Axis Bank-Rupee loan of Rs. 3.33 Lakhs for acquisition of vehicles (carried interest @ 10.5% per annum) was secured against hypothecation of certain vehicles. Balance was repayable in monthly installments up to July 2016. This loan has been repaid in full during the year.
15. IFCI Ltd - Rupee Loan of Rs. 5,000 Lakhs (Carried interest @14.95% per annum) was secured by first pari-passu charge on land & building of Hyatt Regency Delhi (excluding Serviced Apartment Tower and land underneath) and second charge on a portion of the property i.e. 6 floors from first floor to sixth floor with super built-up measuring 51,881 sq. ft. in the Serviced Apartment Tower, first charge and/or hypothecation of freehold land, plant and machinery situated at Sangli in Maharashtra and personal guarantee of Chairman and Managing Director. Repayable in 18 equal installments commencing from 15th October, 2016. This loan has been paid off in full during the year.
16. Kotak Mahindra Prime Limited -Rupee loan for acquisition of vehicles (carried interest @ 10.45% per annum) is secured against hypothecation of a vehicles. Balance repayable in monthly installments up to December 2018.
(p) Kotak Mahindra Prime Limited -Rupee loan for acquisition of vehicles (carries interest @ 10.25% per annum) is secured against hypothecation of certain vehicles. Balance repayable in monthly installments up to May 2020.
17. Kotak Mahindra Prime Limited -Rupee loan for acquisition of vehicles (carries interest @ 10.25% per annum) is secured against hypothecation of certain vehicles. Balance repayable in monthly installments up to February 2021.
18. Kotak Mahindra Prime Limited -Rupee loan for acquisition of vehicles (carries interest @ 11.89% per annum) is secured against hypothecation of certain vehicles. Balance repayable in monthly installments up to November, 2019.
19. Kotak Mahindra Prime Limited -Rupee loan for acquisition of vehicles (carries interest @ 8.60% per annum) is secured against hypothecation of the vehicle financed by the loan. Balance repayable in monthly installments up to March 2022.
The aggregate values of the vehicle loans outstanding from Kotak Mahindra Prime Ltd aggregates to Rs. 399.51 Lakhs
20. BMW Financial Services - Rupee loan of Rs. 2.57 Lakhs for acquisition of vehicles (carried interest @ 12.21% per annum) is secured against hypothecation of certain vehicles. Balance repayable in monthly installments up to July 2017.
21. SREI Equipment Finance Ltd - Rupee Loan of Rs. 125.59 Lakhs for acquisition of equipment (carried interest @ 14.25% per annum) is secured against the power saving equipment acquired from the loan. Balance is payable in equal monthly installments up to October, 2020 starting from December, 2015.
22. HDFC Bank Ltd - Rupee loan of Rs. 70 Lakhs for acquisition of a vehicle (carried interest @ 11.00% per annum) is secured against hypothecation of the vehicle financed by the loan. Balance repayable in monthly installments up to May 2021.
23. Toyota Financial Services India Ltd - Rupee loan of Rs. 16.60 Lakhs for acquisition of a vehicle (carried interest @ 9.05% per annum) is secured against hypothecation of the vehicle financed by the loan. Balance repayable in monthly installments up to June 2021.
There is no continuing default in repayment of loans and interest as on 31st March, 2017.
24. DBS Bank Limited -Overdraft facilities (carried interest @ 12.00% per annum) and is secured by first pari passu charge of land & building of Hotel Hyatt Regency Delhi and New Tower Block A in Hyatt Regency Delhi (excluding 3,000 sq ft on 6th floor), first pari passu charge on movable fixed assets (Excluding vehicles, windmills and power saving equipment), first pari passu charge on current assets (Present and Future); personal guarantee of Chairman & Managing Director, pledge of shares representing Company''s investment in foreign subsidiary company.
25. Yes Bank Limited -Over draft facilities (carried interest @ 11.50% per annum) is secured by first pari passu charge of land & building of Hotel Hyatt Regency Delhi and New Tower Block A in Hyatt Regency Delhi (excluding 3,000 sq ft on 6th floor); first pari passu charge on movable fixed assets (Excluding vehicles and power saving equipment), first pari passu charge on current assets and personal guarantee of Chairman & Managing Director.
26. IDBI Bank Limited - Overdraft facilities (carried interest @ 12.75% per annum) is secured against first pari-passu charge on Hyatt Regency, Delhi (excluding Serviced Apartment Tower) and pledge of 15% shares of one of the subsidiary of the company. This overdraft facility has been withdrawn during the year.
27. Axis Bank Limited - Overdraft facilities (carried interest @ 11.40% to 12.00% per annum) and is secured by first pari passu charge of land & building of Hotel Hyatt Regency Delhi and New Tower Block A in Hyatt Regency Delhi (excluding 3,000 sq ft on 6th floor), first pari passu charge on movable fixed assets (Excluding vehicles, windmills and power saving equipment), first pari passu charge on current assets (Present and Future); personal guarantee of Chairman & Managing Director, pledge of shares representing Company''s investment in foreign subsidiary company.
There is no continuing default in repayment of loans and interest as on 31st March, 2017.
28. . SEGMENT REPORTING
The Company operates only in one reportable segment, i.e. Hospitality/Hotel Business at one location, namely New Delhi (India). The other business segment, i.e. power generation, though governed by different sets of risks and returns, however, is not a reportable segment as defined under the Indian Accounting Standard Ind AS - 108 "Operating Segments", and therefore, no separate disclosures have been made. The assets, liabilities and revenues relating to the said power generation business have, however, been disclosed in the accounts separately. The above treatment is in accordance with the guiding principles enunciated in the said Ind AS.
29. DISCLOSURES AS REQUIRED BY INDIAN ACCOUNTING STANDARD (IND AS) 19 EMPLOYEE BENEFITS
The Company has classified the various benefits provided to employees as under:-
30. Defined contribution plans
- Provident fund
The Company has recognized the following amounts in the statement of profit and loss:
Employersâ contribution to provident fund :- Current Year Rs. 197.56 Lakhs (Previous Year Rs. 188.65 Lakhs)
31. Defined benefit plans
- Gratuity
- Compensated absences - Earned leave
In accordance with Indian Accounting Standard 19, actuarial valuation was done in respect of the aforesaid defined benefit plans based on the following assumptions-
Economic Assumptions
The discount rate and salary increases assumed are the key financial assumptions and should be considered together; it is the difference or ''gap'' between these rates which is more important than the individual rates in isolation.
Discount Rate
The discounting rate is based on the gross redemption yield on medium to long term risk free investments. The estimated term of the benefits/obligations works out to zero years. For the current valuation a discount rate of 7.50% p.a. (Previous Year 8.00% p.a.) compound has been used.
Salary Escalation Rate
The salary escalation rate usually consists of at least three components, viz. regular increments, price inflation and promotional increases. In addition to this any commitments by the management regarding future salary increases and the Company''s philosophy towards employee remuneration are also to be taken into account. Again a long-term view as to trend in salary increase rates has to be taken rather than be guided by the escalation rates experienced in the immediate past, if they have been influenced by unusual factors.
32. CORPORATE SOCIAL RESPONSIBILITY
Pursuant to the provisions of section 135(5) of the Companies Act, 2013 (the Act), the Company has formed its Corporate Social Responsibility (CSR) Committee. As per the relevant provisions of the Act read with Rule 2(1)(f) of the Companies (Corporate Social Responsibility Policy) Rules, 2014, the Company is required to spend at least 2% of the average net profits (determined under section 198 of the Companies Act 2013 and section 349 of the Companies Act 1956) made during the immediately three financial years. However, due to inadequacy of profits as per Section 198 of the Companies Act, 2013, the company is not required to spend any amount on CSR activities for Financial Year 2016-17.
Gross amount required to be spent by the Company during the year: Rs. NIL (Previous year - Rs. NIL)
33. FINANCIAL INSTRUMENTS - ACCOUNTING CLASSIFICATIONS AND FAIR VALUE MEASUREMENTS
The fair values of the financial assets and liabilities are 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.
The following methods and assumptions were used to estimate the fair values:
34. Fair values of cash and short term deposits, trade and other short term receivables, trade payables, other current liabilities, short term loans from banks and other financial institutions approximate their carrying amounts largely due to short-term maturities of these instruments.
35. Financial instruments with fixed and variable interest rates are evaluated by the Company based on parameters such as interest rates and individual credit worthiness of the counterparty. Based on the evaluation, allowances are taken to account for the expected losses of these receivables.
The company uses the following hierarchy for determining and disclosing the fair values of financial instruments by valuation technique:
Level 1 : Quoted (unadjusted) prices in active markets for identical assets or liabilities.
Level 2 : Other techniques for which all inputs which have a significant effects on the recorded fair value are observable, either directly or indirectly.
Level 3 : Techniques which use inputs that have a significant effects on the recorded fair value that are not based on observable market data.
36. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
The Company''s financial risk management is an integral part of how to plan and execute its business strategies. The company''s financial risk management policy is set by the Managing Board.
Market risk
Market risk is the risk of loss of future earnings, fair values or future cash flows that may result from a change in the price of a financial instrument. The value of a financial instrument may change as a result of changes in the interest rates, foreign currency exchange rates, equity prices and other market changes that affect market risk sensitive instruments. Market risk is attributable to all market risk sensitive financial instruments including investments and deposits, foreign currency receivables, payables and loan borrowings.
The Company manages market risk through a treasury department, which evaluates and exercises independent control over the entire process of market risk management. The treasury department recommends risk management objectives and policies, which are approved by Senior Management and the Audit Committee. The activities of this department include management of cash resources, implementing hedging strategies for foreign currency exposures, borrowing strategies, and ensuring compliance with market risk limits and policies.
Interest rate risk
Interest rate risk is the risk that fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. In order to optimize the company''s position with regards to the interest income and interest expenses and to manage the interest rate risk, treasury performs a comprehensive corporate interest rate risk management by balancing the proportion of fixed rate and floating rate financial instruments in it total portfolio.
The company is not exposed to significant interest rate risk as at the specified reporting date.
Refer Note 19 for interest rate profile of the Companyâs interest-bearing financial instrument at the reporting date.
Foreign currency risk
The Company operates locally, however, the nature of its operations requires it to transact in several currencies and consequently the Company is exposed to foreign exchange risk in various foreign currencies.
The Company evaluates exchange rate exposure arising from foreign currency transactions and the Company follows established risk management policies.
37. Foreign Currency Exposure
Refer Note 41 for foreign currency exposure as at March 31, 2017, March 31, 2016 and April 01, 2015 respectively.
38. Foreign Currency Sensitivity
1% increase or decrease in foreign exchange rates will have the following impact on the profit before tax
Credit risk
Credit risk arises from the possibility that counter party may not be able to settle their obligations as agreed. To manage this, the Company periodically assesses the financial reliability of customers, taking into account the financial condition, current economic trends, and analysis of historical bad debts and ageing of accounts receivable. Individual risk limits are set accordingly.
The Company considers the probability of default upon initial recognition of asset and whether there has been a significant increase in credit risk on an ongoing basis throughout each reporting period. To assess whether there is significant increase in credit risk the company compares the risk of a default occurring an the asset at the reporting date with the risk of default as the date of initial recognition. It considers reasonable and supportive forwarding-looking information such as:
39. Actual or expected significant adverse changes in business,
40. Actual or expected significant changes in the operating results of the counterparty.
41. Financial or economic conditions that are expected to cause a significant change to the counterparty''s ability to mere its obligation,
42. Significant increase in credit risk on other financial instruments of the same counterparty.
43. Significant changes in the value of the collateral supporting the obligation or in the quality of third-party guarantees or credit enhancements.
Financial assets are written off when there is no reasonable expectation of recovery, such as a debtor failing to engage in a repayment plan with the Company. The Company categorizes a loan or receivable for write off when a debtor fails to make contractual payments greater than 2 years past due. Where loans or receivables have been written off, the Company continues to engage in enforcement activity to attempt to recover the receivable due. Where recoveries are made, these are recognized in profit or loss.
44. Provision for expected credit losses again "II" and "III" above
The company has assets where the counter- parties have sufficient capacity to meet the obligations and where the risk of default is very low. Hence based on historic default rates, the Company believes that, no impairment allowance is necessary in respect of above mentioned financial assets.
Liquidity Risk
Liquidity Risk is defined as the risk that the company will not be able to settle or meet its obligations on time or at reasonable price. The company''s treasury department is responsible for liquidity, funding as well as settlement management. In addition, processes and policies related to such risks are overseen by senior management. Management monitors the company''s net liquidity position through rolling forecast on the basis of expected cash flows.
Maturity profile of financial liabilities
The table below provides details regarding the remaining contractual maturities of financial liabilities at the reporting date based on contractual undiscounted payments.
45. FIRST TIME ADOPTION OF IND AS First-time Adoption of Ind AS
The company has prepared its first Financial Statements in accordance with Ind AS for the year ended March 31, 2017. For periods up to and including the year ended 31 March 2016, the Company prepared its financial statements in accordance with Indian GAAP, including accounting standards notified under the Companies (Accounting Standards) Rules, 2006 (as amended). The effective date for Companyâs Ind AS Opening Balance Sheet is 1 April 2015 (the date of transition to Ind AS).
46. FIRST TIME ADOPTION OF IND AS (Contd.)
The accounting policies set out in Note 3 have been applied in preparing the financial statements for the year ended March 31, 2017, the comparative information presented in these financial statements for the year ended March 31, 2016 and in the preparation of an opening Ind AS Balance Sheet at April 01, 2015 (the Companyâs date of transition). According to Ind AS 101, the first Ind AS Financial Statements must use recognition and measurement principles that are based on standards and interpretations that are effective at March 31, 2017, the date of first-time preparation of Financial Statements according to Ind AS. These accounting principles and measurement principles must be applied retrospectively to the date of transition to Ind AS and for all periods presented within the first Ind AS Financial Statements.
Any resulting differences between carrying amounts of assets and liabilities according to Ind AS 101 as of April 01, 2015 compared with those presented in the Indian GAAP Balance Sheet as of March 31, 2015, were recognized in equity under retained earnings within the Ind AS Balance Sheet.
An explanation of how the transition from previous GAAP to Ind AS has affected the companyâs financial position, financial performance and cash flows is set out in the following notes and reconciliations.
47. Exemptions and exceptions availed:
Set out below are the applicable Ind AS 101 optional exemptions and mandatory exceptions applied in the transition from Indian GAAP to Ind AS.
48. Deemed cost:
Ind AS 101 permits a first-time adopter to elect to continue with the carrying value for all of its property, plant and equipment as recognized in the financial statements as at the date of transition to Ind AS, measured as per the Indian GAAP and use that as its deemed cost as at the date of transition after making necessary adjustments for de-commissioning liabilities. This exemption can also be used for intangible assets covered by Ind AS 38 Intangible Assets.
Accordingly, the Company has elected to measure all of its property, plant and equipment and intangible assets at their Indian GAAP carrying values.
49. Leases:
Appendix C to Ind AS 17 requires an entity to assess whether a contract or arrangement contains a lease. In accordance with Ind AS 17, this assessment should be carried out at the inception of the contract or arrangement. Ind AS 101 provides an option to make this assessment on the basis of facts and circumstances existing at the date of transition to Ind AS, except where the effect is expected to be not material. The Company has elected to apply this exemption for such contracts/arrangements.
50. Designation of previously recognised financial instruments:
Ind AS 101 allows an entity to designate investments in equity instruments at FVOCI on the basis of the facts and circumstances at the date of transition to Ind AS. The Company has elected to apply this exemption for its investment in equity investments.
51. Estimates:
An entityâs estimates in accordance with Ind ASs at the date of transition to Ind AS shall be consistent with estimates made for the same date in accordance with Indian GAAP [after adjustments to reflect any difference in accounting policies], unless there is objective evidence that those estimates were in error. Ind AS estimates as at April 1, 2015 are consistent with the estimates as at the same date made in conformity with Indian GAAP. The Company made estimates for following items in accordance with Ind AS at the date of transition as these were not required under Indian GAAP:
52. Investment in equity instruments carried at FVPL or FVOCI;
53. Investment in debt instruments carried at FVPL; and
54. Impairment of financial assets based on expected credit loss model.
55. Classification and measurement of financial assets:
Ind AS 101 requires an entity to assess classification and measurement of financial assets on the basis of the facts and circumstances that exist at the date of transition to Ind AS.
56. De-recognition of financial assets and liabilities:
Ind AS 101 requires a first-time adopter to apply the de-recognition provisions of Ind AS 109 prospectively for transactions occurring on or after the date of transition to Ind AS. However, Ind AS 101 allows a first-time adopter to apply the de-recognition requirements in Ind AS 109 retrospectively from a date of the entityâs choosing, provided that the information needed to apply Ind AS 109 to financial assets and financial liabilities derecognized as a result of past transactions was obtained at the time of initially accounting for those transactions.
57. Deferred Tax on Ind AS adjustments:
IGAAP requires deferred tax accounting using the income statement approach, which focuses on differences between taxable profits and accounting profits for the period. Ind AS 12 requires entities to account for deferred taxes using the balance sheet approach, which focuses on temporary differences between the carrying amount of an asset or liability in the balance sheet and its tax base. The application of Ind AS 12 approach has resulted in recognition of deferred tax on new temporary differences which was not required under IGAAP. In addition, the various transitional adjustments lead to temporary differences. According to the accounting policies, the Company has to account for such differences. Deferred tax adjustments are recognized in correlation to the underlying transaction either in retained earnings or a separate component of equity.
58. Actuarial loss on defined benefit plan:
Both under IGAAP and Ind AS, the Company recognized costs related to its post-employment defined benefit plan on an actuarial basis. Under IGAAP, the entire cost, including actuarial gains and losses, are charged to profit or loss. Under Ind AS, re-measurements [comprising of actuarial gains and losses, the effect of the asset ceiling, excluding amounts included in net interest on the net defined benefit liability and the return on plan assets excluding amounts included in net interest on the net defined benefit liability] are recognized immediately in the balance sheet with a corresponding debit or credit to retained earnings through OCI.
59. Effect of changes in revaluation surplus:
Para 39 to 42 of the Ind AS 16"Property, Plant & Equipment mandates that any change in the revaluation surplus is required to be routed through other comprehensive income (OCI). Accordingly, additional depreciation arising out of revalued property is also required to be routed through OCI account. The said effect has been eliminated from statement of profit and loss and has been shown under OCI
60. Fair valuation of borrowing through profit and loss account
Ind AS 109 mandates financial instruments that are classified as fair value through profit or loss account to be fair valued whenever the financial statements are prepared. As per the provisions of Ind AS 109, where any transaction costs have been incurred at the time of obtaining term loan, then they said costs are required to be amortized at "Effective Interest Rate" (EIR) in time span of the said term loan.
61. Others:
Sale of goods:
Under the IGAAP, revenue from sale of products was presented exclusive of excise duty. Under Ind AS, revenue from sale of goods is presented inclusive of excise duty. The excise duty paid is presented on the face of the statement of profit and loss as part of expenses.
Other comprehensive income:
Under Ind AS, all items of income and expense recognized in a period should be included in profit or loss for the period, unless a standard requires or permits otherwise. Items of income and expense that are not recognized in profit or loss but are shown in the statement of profit and loss as âother comprehensive incomeâ include re-measurements of defined benefit plans and fair value gains or (losses) on FVOCI equity instruments and corresponding tax impact thereon. The concept of other comprehensive income did not exist under previous GAAP.
Statement of cash flows:
The transition from IGAAP to Ind AS has not had a material impact on the statement of cash flows.
Mar 31, 2016
1. SIGNIFICANT ACCOUNTING POLICIES ...contd.
(i) All employees are covered under contributory provident fund benefit of a contribution of 12% of salary. It is a defined contribution scheme and the contribution is charged to the statement of profit and loss of the year when the contribution to the respective fund is due. There is no obligation other than the contribution payable to the respective fund.
(ii) The Company also provides for retirement benefits in the form of gratuity and compensated absences/ Leave encashment in pursuance of the Company leave rules. The Companyâs liability towards such defined benefit plans are determined based on valuations as at the Balance Sheet date made by independent actuaries. All actuarial gains/losses arising during the accounting year are recognized immediately in the statement of profit and loss as income or expense. The classification of the Companyâs net obligation into current and non-current is as per the actuarial valuation report.
j) Income and Deferred Taxes
Tax expense comprises current and deferred tax. Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the Income Tax Act, 1961 and tax laws prevailing in the respective tax jurisdictions where the Company operates.
Deferred income taxes reflect the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years.
Deferred tax assets and liabilities are measured using the tax rates and tax laws that have been enacted or substantively enacted at the Balance Sheet date.
Deferred tax liabilities are recognized for all taxable timing differences. Deferred tax assets are recognized for deductible timing differences only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized. Deferred tax asset on unabsorbed depreciation and carry forward losses is recognized only to the extent that there is virtual certainty supported by convincing evidence that they can be realized against future taxable profits.
At each balance sheet date, the Company reassesses unrecognized deferred tax assets. It recognizes unrecognized deferred tax assets to the extent that it has become reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available against which such deferred tax assets can be realized.
Minimum Alternate Tax (MAT) paid in a year is charged to the statement of profit and loss as current tax. The Company recognizes MAT credit available as an asset only to the extent that there is convincing evidence that the Company will pay normal income tax during the specified period, i.e. the period for which MAT credit is allowed to be carried forward. In the year in which the Company recognizes MAT credit as an asset, the said asset is created by way of credit to the statement of profit and loss and shown as âMAT Credit Entitlementâ. The Company reviews the âMAT Credit Entitlementâ asset at each reporting date and writes it down to the extent the Company does not have convincing evidence that it will pay normal tax during the specified period and utilize the MAT Credit Entitlement.
k) Borrowing costs
Borrowing cost includes interest, amortization of ancillary costs incurred in connection with the arrangement of borrowings and exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost.
Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalized as part of the cost of the respective asset. All other borrowing costs are expensed in the period they occur.
Borrowing costs which are not specifically attributable to the acquisition, construction or production of a qualifying asset, the amount of borrowing costs eligible for capitalization is determined by applying a weighted average capitalization rate. The weighted average rate is taken of the borrowing costs applicable to the outstanding borrowings of the company during the period, other than borrowings made specifically for the purpose of obtaining a qualifying asset. The amount of borrowing costs capitalized cannot exceed the amount of borrowing costs incurred during that period.
l) Earnings per equity share
Basic earnings per equity share is calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period. The weighted average number of equity shares is adjusted for events such as bonus issue and shares split that have changed the number of equity shares outstanding without a corresponding change in resources.
For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares, if any.
m) Provisions
A provision is recognized when an enterprise has a present obligation as a result of past events; it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reasonable estimate can be made. Provisions are not discounted to its present value and are determined based on best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates.
n) Contingent liabilities
A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the Company or a present obligation that is not recognized because it is probable that an outflow of resources will be required to settle the obligations. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognized because it cannot be measured reliably. The Company does not recognize a contingent liability but discloses its existence in the financial statements.
o) Cash and Cash Equivalents
Cash and cash equivalents comprise cash at bank and cash/cheques on hand and short term deposits with banks with an original maturity of not more than three months.
p) Measurement of EBITDA
The Company has elected to present earnings before interest, tax, depreciation and amortization (EBITDA) as a separate line item on the face of the statement of profit and loss. In its measurement, the Company does not include depreciation and amortization expense, finance costs and tax expense.
q) Operating Leases
Leases in which a significant portion of the risks and rewards of ownership are retained by the less or are classified as operating leases. The Company is both a lessee and a less or under such arrangements. Payments and receipts under such leases are charged or credited to the Statement of Profit and Loss on a straight line basis over the primary period of the lease unless another systematic basis is more representative of the time pattern of the userâs benefit.
(a) Rights, preferences and restrictions attached to Equity Shares
The Company has only one class of equity shares having a par value of Rs. 10 per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividend in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting. For the year ended 31st March, 2016, the amount of per share dividend proposed as distribution to equity shareholders is Nil (31st March, 2015: Re. Nil).
In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.
As per records of the Company, including its register of shareholders/members and other declarations received from shareholders regarding beneficial interest, the above shareholding represents both legal and beneficial ownerships of shares.
Nature of security and terms of repayment for secured long term borrowings:
(a) DBS Bank Limited - External commercial borrowings (carried interest margin over LIBOR / SIBOR from 3.10% to 3.25% per annum) are secured / to be secured by first pari-passu charge of land & building of Hotel Hyatt Regency Delhi (excluding Serviced Apartment Tower and land underneath); personal guarantee of Chairman & Managing Director, pledge of shares representing Company''s investment in foreign subsidiary company. External commercial borrowings are repayable as under:
(i) SGD 227.29 Lakhs is payable in 48 unequal quarterly installments commencing from June 2018; (ii) USD 310.05 Lakhs is payable in 48 unequal quarterly installments commencing from June 2018 and; (iii) USD 72.48 Lakhs is payable in 48 unequal quarterly installments commencing from June 2018.
(b) Axis Bank Limited - Rupee loan (carried interest from @ 12.60% to 12.90% per annum) was secured by first charge on six floors (Serviced Apartments) in the new tower/ building in the existing Hyatt Regency Hotel complex, second exclusive mortgage charge on the land and building pertaining to the existing Hyatt Regency Hotel complex, first pari-passu hypothecation charge on the moveable fixed assets of the Company - both present & future and personal guarantee of Chairman & Managing Director. The loan was repayable in unequal quarterly installments up to March 2023 which commenced from December 2014. This loan has been repaid full during the year.
(c) Axis Bank Limited - Rupee loan of Rs. 10,500 Lakhs (Amount sanctioned Rs. 16,200 Lakhs) (carried interest @ 12.00% per annum) secured by first pari-passu on entire unsold area measuring appx. 70,000 sq. ft. (Super Built Area) in the new tower, part of commercial hotel plot in Bhikaji Cama Place, New Delhi, first pari-passu charge on the cash flows of the company, first pari-passu charge on the land and building pertaining to the existing hotel complex, first pari-passu hypothecation charge on the movable fixed assets and current assets of the company, both present and future and personal guarantee of Chairman and Managing Director. This loan has been obtained for the purpose of re-financing of existing loans. The loan is repayable in unequal 48 quarterly installments commencing from June 2018.
(d) IDBI Bank Limited - Rupee Loan Rs. 5,700 Lakhs (carried interest @12.50% to 13.00% per annum) is secured by first pari-passu charge on land and building of existing Hotel block (Hyatt Regency Delhi); unconditional and irrevocable personal guarantee of Chairman & Managing Director and pledge of 15% shares of company''s one of the subsidiary. This loan was repayable in 18 unequal quarterly installments which commenced from October 01, 2015.
(e) ING Vysya Bank Limited (Now Kotak Mahindra Bank Limited) - Rupee loan (carrying interest from @ 11.85% to 12.10% per annum) was secured by exclusive mortgage charge on the two floors along with 3000 square ft. of the Sixth Floor (Serviced Apartments) in the new tower/ building in existing Hyatt Regency Hotel complex, first pari-passu hypothecation charge on the moveable fixed assets of the Company - both present & future and personal guarantee of Chairman & Managing Director. This loan was repayable in 84 monthly installments up to September 2020, repayment started from October 2013. This loan has been repaid during the year.
(f) ING Vysya Bank (Now Kotak Mahindra Bank Limited) - Rupee loan Rs. 1,710.50 Lakhs (carried interest @ 12.35% per annum) is secured by pari-passu charge on new tower ground, lobby level floor, exclusive charge mortgage on 3000 sq. ft. of sixth floor and personal guarantee of Chairman and Managing Director, repayable in 84 monthly installments, up to May 2021, repayment started from June, 2014.
(g) Yes Bank Limited - Rupee loan (carried interest @ 12.50% per annum) was secured by first pari-passu charge on land & building of Hyatt Regency Delhi, second pari-passu charge on current assets (both present and future); unconditional and irrevocable personal guarantee of Chairman & Managing Director and was repayable in 32 quarterly installments by January 2024 starting from April 2016. Outstanding balance as on 31st March, 2015 was Rs. 5,000 Lakhs. This loan has been repaid during the year.
(h) Yes Bank Limited - Rupee loan of Rs. 5,500 Lakhs (carried interest @ 10.50% to 10.75% per annum) is secured by first pari-passu charge on Land & Building of Hyatt Regency Delhi Hotel, second pari-passu charge on current assets of the borrower (excluding commercial/service apartment block) and a personal bank guarantee of Chairman and Managing Director. The loan is repayable in 48 structured quarterly installments starting from October 2018.
(i) Bank of Maharashtra (Term Loan I) of Rs. 19,775 Lakhs (carried interest @ 10.95% to 11.25% floating with monthly rests) - is secured by 1st pari-passu charge on land and building of Hotel Hyatt Regency, District Centre, R.K.Puram, Bhikaji Cama Place, M.G. Marg, New Delhi 110066 & personal guarantee of the Chairman & Managing Director. The loan is payable in 48 unequal quarterly installments commencing from June 2018.
(j) Bank of Maharastra (Term Loan II) of Rs. 4,366 Lakhs (carried interest @ 10.95% to 11.50% floating with monthly rests) - is secured by 1st pari-passu charge on land & building of Hotel Hyatt Regency, District Centre, R.K.Puram, Bhikaji Cama Place, M.G. Marg, New Delhi 110066 & personal guarantee of Chairman and Managing Director. The loan is payable in 48 unequal quarterly installments commencing from June 2018.
(k) ICICI Bank - Rupee loan (carried interest @ 11.41% per annum) is secured against hypothecation of 16 vehicles. Balance repayable in monthly installments up to June 2016.
ICICI Bank - Rupee loan (carried interest @ 9.84% per annum) is secured against hypothecation of 14 vehicles. Balance repayable in monthly installments up to December 2020.
The aggregate values of the vehicle loans from ICICI Bank aggregate to Rs. 343.16 Lakhs
(l) ING Vysya Bank (Now Kotak Mahindra Bank Limited) - Rupee loan of Rs. 146.83 Lakhs for business of generation of electricity (carried interest @ 11.65% to 12.10% per annum) is secured by first charge and /or hypothecation of freehold land, plant & machinery and book-debts pertaining to the windmill situated at Sinner in Maharashtra and personal guarantee of Chairman & Managing Director. Balance repayable in 3 equal installment up to October 2016.
(m) Axis Bank - Rupee loan of Rs. 3.33 Lakhs for acquisition of vehicles (carried interest @ 10.5% per annum) is secured against hypothecation of certain vehicles. Balance repayable in monthly installments up to July 2016.
(n) IFCI Ltd - Rupee Loan of Rs. 5,000 Lakhs (Carried interest @14.95% per annum) is secured by first pari-passu charge on land & building of Hyatt Regency Delhi (excluding Serviced Apartment Tower and land underneath) and second charge on a portion of the property i.e. 6 floors from first floor to sixth floor with super built-up measuring 51,881 sq. ft. in the Serviced Apartment Tower, first charge and/or hypothecation of freehold land, plant and machinery situated at Sanghli in Maharashtra and personal guarantee of Chairman and Managing Director. Repayable in 18 equal installments commencing from 15th October, 2016.
(o) Kotak Mahindra Prime Limited - Rupee loan for acquisition of vehicles (carried interest @ 8.75% to 10.45% per annum) is secured against hypothecation of certain vehicles. Balance repayable in monthly installments up to December 2018.
(p) Kotak Mahindra Prime Limited - Rupee loan for acquisition of vehicles (carries interest @ 9.00% to 10.00% per annum) is secured against hypothecation of certain vehicles. Balance repayable in monthly installments up to May 2020.
Kotak Mahindra Prime Limited - Rupee loan for acquisition of vehicles (carries interest @ 9.00% to 10.00% per annum) is secured against hypothecation of certain vehicles. Balance repayable in monthly installments up to February 2021.
The aggregate values of the vehicle loans outstanding from Kotak Mahindra Prime Ltd aggregates to Rs. 154.43 Lakhs
(q) BMW Financial Services - Rupee loan of Rs. 35.70 Lakhs for acquisition of vehicles (carried interest @ 12.21% per annum) is secured against hypothecation of certain vehicles. Balance repayable in monthly installments up to July 2017.
(r) SREI Equipment Finance Ltd - Rupee Loan of Rs. 150.34 Lakhs for acquisition of equipment (carried interest @ 14.25% per annum) is secured against the power saving equipment acquired from the loan. Balance is payable in equal monthly installments up to October 2020 starting from December 2015.
The above includes Rs. 177.33 Lakhs (Previous Year Rs. 177.33 Lakhs) received as refundable interest free security deposits against leave and license agreements relating to the shops in Hotel Hyatt Regency and Rs. 1,500 Lakhs (Previous Year Rs. 1,500.00 Lakhs) received as refundable interest free security deposit for parking space in Serviced Apartment Tower.
(a) DBS Bank Limited - Overdraft facilities (carried interest @ 12.00% per annum) and is secured against first pari-passu charge of land and building of Hotel Hyatt Regency, Delhi (excluding Serviced Apartment tower and land underneath) and pledge of shares representing Company''s investment in foreign subsidiary company.
(b) Yes Bank Limited - Over draft facilities (carried interest @ 11.50% per annum) was secured by pledge on shareholding of Chairman and Managing Director, his associates, Asian Holdings Private Limited''s holding in the Company, unconditional and irrevocable personal guarantee of Chairman and Managing Director. This overdraft facility has been withdrawn during the financial year.
(c) ING Vysya Bank Limited (Now Kotak Mahindra Bank Limited) - Overdraft facilities (carried interest @ 12.10% per annum) was secured against hypothecation of Land, Plant and Machinery of windmill situated at Sinner, Maharashtra and 2nd Floor of the Serviced Apartment at Hyatt Regency Delhi.
(d) IDBI Bank Limited - Overdraft facilities (carried interest @ 12.50% to 12.75% per annum) is secured against first pari-passu charge on Hyatt Regency, Delhi (excluding Serviced Apartment Tower) and pledge of 15% shares of one of the subsidiary of the company.
(e) Axis Bank Limited - Overdraft facilities (carried interest @ 11.95% to 12.30% per annum) and is secured by first pari-passu on entire unsold area measuring approx 70,000 sq. ft. (Super Built Area) in the new tower, part of commercial hotel plot in Bhikaji Cama Place, New Delhi, first pari-passu charge on the cash flows of the company, first pari-passu charge on the land & building pertaining to the existing hotel complex, first pari-passu hypothecation charge on the movable fixed assets and current assets of the company, both present and future and personal guarantee of Chairman and Managing Director.
(a) Security deposits (interest free) includes Rs. Nil (Previous Year Rs. 1,300.00 Lakhs) received from a company in which certain relatives of directors of the Company are interested, Rs. Nil (Previous Year Rs. 1,330 Lakhs) received from Newtown Hospitality Pvt. Ltd. (a subsidiary company, which ceased to be so w.e.f 27th July, 2015) and Rs. Nil (Previous Year Rs. 3,690.00 Lakhs) received from other entities against expression of interest for a Joint Venture in respect of its KOLKATA PROJECT. {Refer Note 14(a) to the standalone financial statements}. All these security deposits are subject to agreements/ memorandum of understandings.
(b) Statutory liabilities includes provision for difference of property tax along with interest thereon amounting to Rs. 1,693.11 Lakhs (Previous Year Rs. 5,159.27 Lakhs) {Refer Note 24 to the standalone financial statements}.
(c) There are no amounts due for payment to Investor Education and Protection Fund under Section 205C of the Companies Act, 1956.
(a) The Company, based on the report by a Certified Valuer, had revalued land and building of Hotel Hyatt Regency Delhi (the land and building being more than twenty years old) by adopting Cost of Contractor''s method, on 28th February, 2007 at Rs. 85,700 Lakhs. The same resulted in an increase in the value of land and building of an amount of Rs. 82,131.81 Lakhs, and therefore, an equivalent amount had been credited to the Revaluation Reserve.
(b) Due to increase in the value of assets, as stated above, there was an additional charge of Rs. 86.77 Lakhs (Previous Year Rs. 86.77 Lakhs) for the current year, on account of depreciation. Resultantly, an equivalent amount of Rs. 86.77 Lakhs (Previous Year Rs. 86.77 Lakhs) has been withdrawn from the Revaluation Reserve and credited to the General Reserve (Previous Year credited to the General Reserve).
(b) Interest expenses and net gain/(loss) on foreign currency transaction and translation (if any) are related to certain loans (including foreign currency external commercial borrowings) taken for projects under construction.
(c) The Ministry of Corporate Affairs vide Notification dated March 31, 2009, as amended from time to time, had given an option to the companies whereby the exchange differences pertaining to long term foreign currency monetary items relating to acquisition of a depreciable asset can be added to or deducted from the cost of asset and shall be depreciated over the balance life of the asset. The Company had adopted the said option (wherever applicable) given under paragraph 46 of Accounting Standard (AS)
2. Accordingly, the total net loss on foreign currency transaction and translation on long term foreign currency loans relating to projects under construction is included in capital work-in-progress, as a part of fixed assets.
# The value enhancement is solely on account of change in exchange rate on the stated foreign currency amount invested.
* Subsidiary ceased to exist so with effect from 27th July, 2015
(a) The Company presently holds 100% interest in Fineline Hospitality & Consultancy Pte. Ltd. (FHCPL), which in turn holds 80% stake in Lexon Hotels Venture Ltd., Mauritius (Lexon); and Lexon in turn holds 99.76% interest in Leading Hotels Limited (Leading). Leading is developing an all Villa Hotel Complex at Goa, including residential villas and an 18 hole, 72 par Championship Golf Course. The said project will be under the management of Four Seasons, a world famed hotel chain and hospitality management company.
(b) The Auditors of the subsidiary company, Leading Hotels Limited, in their report have drawn attention to the fact that there are some ongoing legal disputes on its project, and have also indicated that the financial implication of such disputes cannot be ascertained at this stage. However, there is an overall provision for impairment existing of Rs. 5,119.60 Lakhs against the investment in the same project created in the earlier years which has been thus retained and continued.
(c) During the financial year ended 31st March, 2016, the company has disposed off its investment in Newtown Hospitality Private Limited.
Municipal Corporation of Delhi (MCD) introduced a new computation method for levy of Property Tax effective 1st April, 2004 namely "Unit Area Method". Under this method, Five Star Hotels were supposed to pay property tax based on a user factor of 10, which was challenged by way of a joint writ petition filled by The Federation of Hotels & Restaurants Association of India (FHRAI) and the Company, before the High Court of Delhi, which is pending for final adjudication. The Company revisited the provision made earlier for property tax and interest thereon from a user factor of 10 to a user factor 4, in view of the interim order of the High Court of Delhi dated 23rd May, 2014 and legal advice received. Accordingly, the excess provision of Rs. 3,216.60 Lakhs has been reversed.
3. SEGMENT REPORTING
The Company operates only in one reportable segment, i.e. Hospitality/Hotel Business at one location, namely New Delhi (India). The other business segment, i.e. power generation, though governed by different sets of risks and returns, however, is not a reportable segment as defined under the Accounting Standard (AS)-17 on Segment Reporting, and therefore, no separate disclosures have been made. The assets, liabilities and revenues relating to the said power generation business have, however, been disclosed in the accounts separately. The above treatment is in accordance with the guiding principles enunciated in the said Accounting Standard.
4. RELATED PARTY DISCLOSURES AS PER ACCOUNTING STANDARD-18 :
(a) Individual and his relatives having control over the Company (either directly or indirectly)
(i) Mr. Amritesh Jatia, Director
(ii) Mr. Shiv Kumar Jatia, Chairman & Managing Director
(b) Group Companies which significantly influence the Company (either individually or with others)
(i) Yans Enterprises (H.K.) Limited, an overseas entity
(ii) Fineline Holdings Limited, an overseas entity
(iii) Asian Holdings Private Limited, a domestic entity
(c) Group Companies which are significantly influenced by the Company (either individually or with others)
(i) Fineline Hospitality & Consultancy Pte Limited, Mauritius, a wholly owned subsidiary company
(ii) Lexon Hotel Ventures Limited, Mauritius, a subsidiary company
(iii) Leading Hotels Limited, India, a subsidiary company
(iv) Newtown Hospitality Private Limited, a wholly owned subsidiary company (ceased to be subsidiary w.e.f 27th July, 2015
5. RELATED PARTY DISCLOSURES AS PER ACCOUNTING STANDARD-18 : ...contd.
(i) The above related party transactions have been reviewed periodically by the Board of Directors of the Company vis-a-vis the applicable provisions of the Companies Act, 2013, and justification of the rates being charged/ terms thereof and approved the same.
(ii) The details of guarantees and collaterals extended by the related parties in respect of borrowings of the Company have been given at the respective notes.
(e) Related Parties
- Subsidiaries Fineline Hospitality & Consultancy Pte Limited
Lexon Hotel Ventures Limited
Leading Hotels Limited
Newtown Hospitality Private Limited
(ceased to be subsidiary w.e.f. 27th July, 2015)
- Key Management Personnel Mr. Shiv Kumar Jatia Chairman & Managing Director
Ms. Anita Thapar Whole Time Director
- Relative of Key Management Personnel Mr. Amritesh Jatia Director and son of Mr. Shiv Kumar Jatia
Mrs. Archana Jatia Director and wife of Mr. Shiv Kumar Jatia
Mr. Ramesh Jatia Brother of Mr. Shiv Kumar Jatia
Mr. Raj Kumar Jatia Brother of Mr. Shiv Kumar Jatia
- Entities controlled by Directors or their relatives Ascent Hotels Private Limited (with whom transactions entered into during Bhasin & Co.
current year or previous year) Binaguri Tea Company Private Limited
Energy Infrastructure (I) Limited Magus Estates & Hotels Limited
Note: The above transactions excludes changes due to exchange rate fluctuation.
*Figure for 31st March, 2016 includes Provident Fund paid / payable by the employer.
Figure for 31st March, 2015 is net of recovery of Rs. 8.47 Lakhs excess paid in financial year 2010-11.
**Ms. Anita Thapar has been appointed as a whole time director of the company for a period of 3 years effective from 28th May, 2015 in the 34th Annual General Meeting of the Company.
6. EMPLOYEE BENEFITS
The Company has classified the various benefits provided to employees as under:
(a) Defined contribution plans
- Provident fund
The Company has recognized the following amounts in the Statement of Profit and Loss:
Employersâ contribution to provident fund : Current Year Rs. 188.65 Lakhs (Previous Year Rs. 193.33 Lakhs)
(b) Defined benefit plans
- Gratuity
- Compensated absences - Earned leave
In accordance with Accounting Standard 15 (revised 2005), actuarial valuation was done in respect of the aforesaid defined benefit plans based on the following assumptions-
Economic Assumptions
The discount rate and salary increases assumed are the key financial assumptions and should be considered together; it is the difference or ''gap'' between these rates which is more important than the individual rates in isolation.
Discount Rate
The discounting rate is based on the gross redemption yield on medium to long term risk free investments. The estimated term of the benefits/obligations works out to zero years. For the current valuation a discount rate of 8.00% p.a. (Previous Year 8.50% p.a.).
Salary Escalation Rate
The salary escalation rate usually consists of at least three components, viz. regular increments, price inflation and promotional increases. In addition to this any commitments by the management regarding future salary increases and the Company''s philosophy towards employee remuneration are also to be taken into account. Again a long-term view as to trend in salary increase rates has to be taken rather than be guided by the escalation rates experienced in the immediate past, if they have been influenced by unusual factors.
7. DUE TO MICRO, SMALL AND MEDIUM ENTERPRISES AS DEFINED UNDER THE MSMED ACT, 2006
As per the information available and explanations provided to us and certified by the management, there are no amounts due to any Micro, Small and Medium Enterprises which are outstanding for more than 45 days together with interest at the Balance sheet date as defined under the Micro, Small and Medium Enterprise Development Act, 2006.
8. CORPORATE SOCIAL RESPONSIBILITY (CSR)
Pursuant to the provisions of Section 135(5) of the Companies Act, 2013 (the Act), the Company has formed its Corporate Social Responsibility (CSR) Committee. As per the relevant provisions of the Act read with Rule 2(1)(f) of the Companies (Corporate Social Responsibility Policy) Rules, 2014, the Company is required to spend at least 2% of the average net profits (determined under Section 198 of the Companies Act, 2013 and Section 349 of the Companies Act, 1956) made during the immediately three financial years. However, due to inadequacy of profits as per Section 198 of the Companies Act, 2013, the company is not required to spend any amount on CSR activities for Financial Year 2015-16.
(a) Gross amount required to be spent by the Company during the year: Rs. NIL (Previous year - Rs. 76.88 Lakhs)
(b) The Company had decided to contribute to a Government of India approved project entitled to receive donations under Section 35AC of the Income Tax Act, 1961 in Financial Year 2014-15. The CSR Committee decided to contribute Rs. 59.45 Lakhs on the project and has actually contributed an amount of Rs. 15 Lakhs in Financial Year 2014-15 and Rs. 16 Lakhs during the current Financial Year.
9. DERIVATIVE INSTRUMENTS AND UN-HEDGED FOREIGN CURRENCY EXPOSURE
(a) Derivatives outstanding as at 31st March, 2016
Particulars
Forward contract to buy US$
Nil (Previous year NIL)
10. OTHER NOTES
(a) Due to inadequacy of profit in the financial year 2015-16, the minimum remuneration paid to Mr. Shiv Kumar Jatia as Managing Director in terms of the shareholdersâ special resolution dated 21st September, 2015, exceeded the remuneration payable in terms of Section II of Part II of Schedule V to the Companies Act, 2013. Consequently, the Company made an application to the Central Government for approval of managerial remuneration which was in excess of the captioned provisions of the Companies Act, 2013. The Company has since received the requisite approval for payment of managerial remuneration and managerial remuneration is paid to Mr. Shiv Kumar Jatia for FY 2015-16 is well within the limits approved by the Central Government.
(b) Taxation
(i) No provision for tax has been made for income tax in absence of any taxable income during the current year.
(ii) The Company is having net Deferred Tax Asset (DTA) as on 31st March, 2016, however, on the basis of virtual certainty concept and considering the carried forward losses, DTA is not recognized.
(c) The Lease rentals under an operating lease have not been recognized as expense on a straight-line basis, since, in the opinion of the management the recognition method adopted which is as per respective contracts, is more representative of the time pattern of the user''s benefit.
(d) As per the requirement of Schedule III of the Act, the Board of Directors have considered the values of all assets of the Company other than fixed assets and non-current investments, and have come to a conclusion that these have a value on realization in the ordinary course of business which is not less than the value at which they are stated in the balance sheet.
(e) Previous year''s figures
The Company has reclassified or regrouped previous year figures to conform to current year''s classification/ grouping.
Mar 31, 2015
1. Corporate information
Asian Hotels (North) Limited ("the Company") is a public limited
company domiciled in India and is listed on the National Stock Exchange
(NSE) and the Bombay Stock Exchange (BSE). The Company is operating a
Five Star Deluxe Hotel, namely Hyatt Regency in Delhi since 1982.
2. Rights, preferences and restrictions attached to Equity Shares
The Company has only one class of equity shares having a par value of
Rs. 10 per share. Each holder of equity shares is entitled to one vote
per share. The Company declares and pays dividend in Indian rupees. The
dividend proposed by the Board of Directors is subject to the approval
of the shareholders in the ensuing Annual General Meeting. For the year
ended 31st March 2015, the amount of per share dividend proposed as
distribution to equity shareholders is Nil (31st March, 2014: Re.
1.00).
In the event of liquidation of the Company, the holders of equity
shares will be entitled to receive remaining assets of the Company,
after distribution of all preferential amounts. The distribution will
be in proportion to the number of equity shares held by the
shareholders.
(a) Deduction to Revaluation Reserve represents amount withdrawn on
account of depreciation on the increased amount of assets due to
revaluation and credited to the General Reserve based on guidance
provided by "Application Guide on the Provisions of Schedule II to the
Companies Act, 2013" issued by the Institute of Chartered Accountants
of India.
Nature of security and terms of repayment for secured long-term
borrowings:
(a) DBS Bank Limited - External commercial borrowings (carried interest
from 4.10% to 5.95% per annum) are secured / to be secured by exclusive
first charge of land & building of Hotel Hyatt Regency Delhi; personal
guarantee of Chairman & Managing Director, pledge of shares
representing Company's investment in foreign subsidiary Company.
External commercial borrowings are repayable as under: (i). SGD 236.88
Lakhs is payable in 13 quarterly instalments up to June 2018; (ii). USD
416.05 Lakhs is payable in 8 semi-annual instalments up to October 2018
and; (iii). USD 90.72 Lakhs is payable in 10 semi-annual instalments up
to October 2019.
(b) Axis Bank Limited - Rupee loan (carried interest from @ 12.50% to
13.00% per annum) is secured by first charge on six floors (Service
Apartments) in the new tower/building in the existing Hyatt Regency
Hotel complex, second exclusive mortgage charge on the land and
building pertaining to the existing Hyatt Regency Hotel complex, first
pari-passu hypothecation charge on the moveable fixed assets of the
Company - both present & future and personal guarantee of Chairman &
Managing Director. Repayable in unequal quarterly instalments up to
March 2023 commenced from December 2014.
(c) IDBI Bank Limited - Rupee loan (carried interest @13.00% per annum)
is secured by first pari-passu charge on land and building of existing
Hotel block (Hyatt Regency Delhi) along with DBS Bank Limited
(excluding new tower which is mortgaged exclusively to Axis Bank and
ING Vysya Bank Limited); unconditional and irrevocable personal
guarantee of Chairman & Managing Director. Repayable in 18 unequal
quarterly instalments commencing from October 01, 2015.
(d) ING Vysya Bank Limited - Rupee loan Rs. 4,485.55 Lakhs (carried
interest from @ 12.10% to 12.55% per annum) is secured by exclusive
mortgage charge on two floors (Service Apartments) in the new
tower/building in the existing Hyatt Regency Hotel complex, first
pari-passu hypothecation charge on the moveable fixed assets of the
Company - both present & future and personal guarantee of Chairman &
Managing Director. Repayable in 84 monthly instalments up to September
2020, repayment started from October 2013. ING Vysya Bank - Rupee loan
Rs. 1,881.42 Lakhs (carried interest @ 12.35% per annum) is secured by
exclusive mortgage charge on new tower ground, lobby level floor, 3000
sq. ft. of sixth floor, first pari-passu charge on the moveable fixed
assets in the existing Hyatt Regency Delhi and personal guarantee of
Chairman and Managing Director, repayable in 84 monthly instalments, up
to June 2021.
(e) Yes Bank Limited - Rupee loan (carried interest @ 12.50% per annum)
is secured by first pari-passu charge on land & building of Hyatt
Regency Delhi, second pari-passu charge on current assets (both present
and future); unconditional and irrevocable personal guarantee of
Chairman & Managing Director and Mr. Amritesh Jatia, Director;
Repayable in 32 quarterly instalments by January 2024 starting from
April 2016.
(f) ICICI Bank - Rupee loan (carried interest @ 11.41% per annum) is
secured against hypothecation of 16 vehicles. Balance repayable in
monthly instalments up to June 2016.
(g) ING Vysya Bank - Rupee loan for business of generation of
electricity (carried interest from @ 12.10% to 12.55% per annum) is
secured by first charge and/or hypothecation of freehold land, plant &
machinery and book-debts pertaining to the windmill situated at Sinner
in Maharashtra and personal guarantee of Chairman & Managing Director.
Balance repayable in 5 equal instalment up to October 2016.
(h) Axis Bank - Rupee loan for acquisition of vehicles (carried
interest @ 9.32% to 11.12% per annum) is secured against hypothecation
of certain vehicles. Balance repayable in monthly instalments up to
July 2016.
(i) IFCI Ltd - Rupee loan (carried interest @14.95% per annum) is
secured by first pari-passu charge on land & building of Hyatt Regency
Delhi (excluding Serviced Apartment Tower and land underneath) and
second charge on a portion of the property i.e. 6 floors from first
floor to sixth floor with super built-up measuring 47695 sq. ft.
(excluding 3000 sq. ft. super built-up on sixth
floor, 5335 sq. ft. super built-up area on fifth floor, 985 sq. ft.
super built-up area on third floor and 985 sq. ft. super built-up area
on second floor) in the Serviced Apartment Tower, first charge and/or
hypothecation of freehold land, plant & machinery situated at Sangola
in Maharashtra and personal guarantee of Chairman & Managing Director.
Repayable in 18 equal instalment commencing from 15th October, 2016.
(j) Kotak Mahindra Prime Limited - Rupee loan for acquisition of
vehicles (carried interest @ 8.75% to 10.45% per annum) is secured
against hypothecation of certain vehicles. Balance repayable in monthly
instalments up to December 2018.
(k) There is no continuing default in repayment of loans and interest
as on 31st March, 2015. However, during the year there was a delay in
repayment of foreign currency term loan and certain delays in interest
payments.
(a) DBS Bank Limited - Overdraft facilities (carries interest @ 12.00%
per annum) and is secured against hypothecation of Inventories of Hotel
Hyatt Regency Delhi.
(b) Yes Bank Limited - Over draft facilities (carried interest @ 11.50%
per annum) is secured by pledge on shareholding of Chairman & Managing
Director, his associates, Asian Holdings Private Limited and other
group companies (total 7.2%) in the Company; Exclusive charge by way of
equitable mortgage of properties owned by two other group companies of
Chairman & Managing Director; pledge on 30% shareholding of Chairman &
Managing Director in RSJ Developers Private Limited; unconditional and
irrevocable personal guarantee of Chairman & Managing Director and
unconditional, irrevocable corporate guarantee of WEL Intertrade
Private Limited and unconditional and irrevocable personal guarantee of
Mr. Amritesh Jatia, Director.
(c) ING Vysya Bank Limited - Overdraft facilities (carried interest @
12.10% per annum) is secured against hypothecation of stocks and book
debts of Hotel Hyatt Regency Delhi.
(d) IDBI Bank Limited - Overdraft facilities (carried interest @ 12.75%
per annum) is secured against first pari-passu charge on Hyatt Regency
Delhi (excluding Serviced Apartment Tower).
(e) Inter-corporate loans amounting to Rs. 2,685.00 Lakhs are subject
to confirmation/reconciliation with respective parties as at 31st
March, 2015.
(f) There is no continuing default in repayment of loans and interest
as on 31st March 2015.
(a) Advances from customers includes Rs. 275.00 Lakhs (Previous Year
Rs. 7,707.97 Lakhs) received from prospective buyers against agreements
for sale/ fit outs of certain constituents forming part of the Serviced
Apartment Tower. These advances are subject to agreements/ memorandum
of understandings and confirmations/ reconciliations.
(b) Security deposits (interest free) includes Rs. 1,300.00 Lakhs
(Previous Year Rs. 1,400.00 Lakhs) received from a company in which
certain relatives of directors of the Company are interested, Rs.
1,330.00 Lakhs (Previous Year Nil) received from Newtown Hospitality
Pvt. Ltd. (a subsidiary company) and Rs. 3,690.00 Lakhs (Previous Year
Rs. 3,020.00 Lakhs) received from other entities against expression of
interest for a Joint Venture in respect of its KOLKATA PROJECT. {Refer
Note 14(a) to the standalone financial statements}. All these security
deposits are subject to agreements/ memorandum of understandings and
Rs. 3,500 Lakhs are subject to confirmations/ reconciliations.
(c) Statutory liabilities includes provision for difference of property
tax along with interest thereon amounting to Rs. 5,159.27 Lakhs
(Previous Year Rs. 3,121.80 Lakhs) {Refer Note 27A(d) to the standalone
financial statements}.
(a) The Company, based on the report by a Certified Valuer, had
revalued land and building of Hotel Hyatt Regency Delhi (the land and
building being more than twenty years old) by adopting Cost of
Contractor's method, on 28th February, 2007 at Rs. 85,700 Lakhs. The
same resulted in an increase in the value of land and building of an
amount of Rs. 82,131.81 Lakhs, and therefore, an equivalent amount had
been credited to the Revaluation Reserve.
(b) Due to increase in the value of assets, as stated above, there was
an additional charge of Rs. 86.77 Lakhs (Previous Year Rs. 53.91
Lakhs), for the current year, on account of depreciation. Resultantly,
an equivalent amount of Rs. 86.77 Lakhs (Previous Year Rs. 53.91 Lakhs)
has been withdrawn from the Revaluation Reserve and credited to the
General Reserve (Previous Year credited to the Statement of Profit and
Loss). The increase in current year charge is attributable to the
reassessment done due to the facts as mentioned in Note 12 (c) below.
(c) The management reassessed the remaining useful life of the
Company's fixed assets with effect from 1st April, 2014, as prescribed
in Schedule II to the Act. Due to the said reassessment, the
depreciation for the year ended 31st March, 2015 increased by Rs.
846.64 Lakhs. Further, based on transitional provision as provided in
Note 7(b) of the said Schedule II, an amount of Rs. 252.70 Lakhs is
also included in depreciation for the year ended 31st March, 2015 from
which an amount of Rs. 170.71 Lakhs (net of deferred tax Rs. 81.99
Lakhs) has been adjusted against the opening balance of retained
earnings, representing the carrying amount of the assets whose
remaining useful life is nil.
(d) Additions during the year to Land (freehold)-Refer Note 14(a) to
the standalone financial statements.
(h) Delhi Development Authority vide Notification No. 2034E dated
12.08.2008 has, subject to fulfillment of certain conditions, granted
an additional FSI, which in case of the Company, works out to approx.
15000 square meters. The Company has utilized most of the aforesaid
additional FSI up till 31st March, 2015 and capitalised.
(i) During the year, the sale of further two floors in Serviced
Apartment Tower/Building has been recognized and registered sale deed
in respect of the sale of these areas has also been executed. Further,
the long-term lease of certain further areas in Serviced Apartment
Tower/Building has been executed and registration of said deeds in
respect of these areas has also been executed. The same has been
treated as sale of fixed assets and the cost of said area being
de-capitalized during the current year. The gain on said
sales/long-term leases has been included in "Other Income".
3. CONTINGENT LIABILITIES AND COMMITMENTS
31st March 2015 31st March 2014
(Rs. In Lakhs) (Rs. In Lakhs)
A CONTINGENT LIABILITIES
(a) Claims against the Company
not acknowledged as debts* 20.00 20.00
* pertains to cases filed by
certain employees of the Company
(b) Income tax demand/
liabilities not provided for* 85.79 74.48
* includes income tax demand
of Rs. 5.53 Lakhs (Previous
Year Rs. 21.13 Lakhs)
* includes contingent liability of Rs. 80.26 Lakhs (Previous Year Rs.
53.35 Lakhs) on account of taxes as are required to be withheld by the
Company, as per the latest order of Assessing Officer from the payment
to a foreign service provider. However, during the earlier years the
Company was getting Nil withholding tax order for the same. The Company
has gone into appeal with appropriate authorities against this order.
As per the agreement with the foreign service provider the payments to
be made to him shall be without any deduction of taxes, however, if
there are any withholding taxes the same are to be borne by the
Company. Confident of getting a Nil withholding tax order, the Company
has not provided for the amount.
(c) Service tax demand not provided for* 401.10 401.10
* includes demand raised by Service Tax Authorities amounting to Rs.
401.10 Lakhs (Previous Year Rs. 401.10 Lakhs) including penalty demand
of Rs. 250.00 Lakhs and excluding interest for earlier years up to
2007, against which the Company has filed an appeal with Customs,
Excise and Service Tax Appellate Tribunal, New Delhi on 11th March,
2014. The Company is contesting to have already paid the determined
balance liability without penalty before the issuance of show cause
notice by Service Tax Authorities.
Hence, the Company may not be liable to pay any demand and penalty.
Further, the Company is examining in detail certain transactions for
applicability of service tax and will recognise and deposit the same if
applicable on completion of such determination.
(d) The Federation of Hotels & Restaurants Association of India (FHRAI)
and the Company had filed a writ petition in the High Court of Delhi
against the "Unit Area Scheme", the new method for payment of property
tax introduced by Municipal Corporation of Delhi (MCD) w.e.f. 1st
April, 2004. In terms of the interim order dated 10th September, 2004,
passed by the Hon'ble High Court of Delhi in the said matter, the
Company has, so far, been paying a sum of Rs. 54.52 Lakhs per annum
based on the Rateable Value Method, existing prior to the new method.
In a subsequent development, vide order dated 23rd May, 2014, the
Hon'ble High Court directed the petitioners to pay the property tax
based on user factor of 4 and the rate of tax at 10% of the annual
value, including all arrears, till the final adjudication of the
matter. However, as a matter of abundant caution, the Company has
provided for the property tax under the "Unit Area Scheme" based on the
user factor of 10 and the rate of tax at 10% of the annual value up to
Financial Year 2009-10 and 20% for the subsequent financial years. Such
provision appears as expense under Rates and Taxes (Other Expenses)
including for earlier years amounting to Rs. 1,417.12 Lakhs.
(e) Relating to an accident in the hotel Hyatt Regency Delhi premises,
a writ petition has been filed with Delhi High Court by a relative of
the injured person, the Company has been made one of the respondents.
Any consequence on the outcome of the case can not be ascertained.
(B) COMMITMENTS 31st March 2015 31st March 2014
(Rs. In Lakhs) (Rs. In Lakhs)
(a) Estimated amount of contracts
remaining to be executed on
capital account and not 713.89 1,752.80
provided for
(b) Lease commitments
(i) Future commitments in respect of assets acquired under
Finance Schemes:
Minimum installments payable within one year 58.63 53.02
later than one year but
not later than five years 86.27 44.10
Present value of payable within one year 48.52 46.52
minimum
instalments later than one year but 73.43 40.64
not later than five years
(ii) Future minimum lease amounts receivable by the Company in respect
of non-cancellable operating leases (other than land) for shops and
apartments entered into by the Company:
Not later than one year 78.23 48.60
Later than one year and not
later than five years 67.01 73.51
(iii) Future minimum lease amounts payable by the Company in respect
of non-cancellable operating leases (other than land) for other services
(including rented premises) entered into by the Company :
Not later than one year 146.62 95.97
Later than one year and not
later than five years 28.82 263.55
More than five years 182.73 -
4. SEGMENT REPORTING
The Company operates only in one reportable segment, i.e.
Hospitality/Hotel Business at one location, namely New Delhi (India).
The other business segment, i.e. power generation, though governed by
different sets of risks and returns, however, is not a reportable
segment as defined under the Accounting Standard (AS)-17 on Segment
Reporting, and therefore, no separate disclosures have been made. The
assets, liabilities and revenues relating to the said power generation
business have, however, been disclosed in the accounts separately. The
above treatment is in accordance with the guiding principles enunciated
in the said Accounting Standard.
5. RELATED PARTY DISCLOSURES AS PER ACCOUNTING STANDARD - 18 :
(a) Individual and his relatives having control over the Company
(either directly or indirectly)
(i) Mr. Amritesh Jatia, Director
(ii) Mr. Shiv Kumar Jatia, Chairman & Managing Director
(b) Group Companies which significantly influence the Company (either
individually or with others)
(i) Yans Enterprises (H.K.) Limited, an overseas entity
(ii) Fineline Holdings Limited, an overseas entity
(c) Group Companies which are significantly influenced by the Company
(either individually or with others)
(i) Fineline Hospitality & Consultancy Pte Limited, Mauritius, a wholly
owned subsidiary company
(ii) Lexon Hotel Ventures Limited, Mauritius, a subsidiary company
(iii) Leading Hotels Limited, India, a subsidiary company
(iv) Newtown Hospitality Private Limited, a wholly owned subsidiary
company (w.e.f. 26th February, 2014)
(d) Related Parties
* Subsidiaries Fineline Hospitality &
Consultancy Pte Limited
Lexon Hotel Ventures Limited
Leading Hotels Limited
Newtown Hospitality Private
Limited (w.e.f. 26th February, 2014)
* Key Management Personnel
Mr. Shiv Kumar Jatia Chairman & Managing Director
* Relative of Key Management
Personnel
Mr. Amritesh Jatia Director and son of Mr. Shiv Kumar Jatia
Mrs. Archana Jatia Director and wife of Mr. Shiv Kumar Jatia
Mr. Ramesh Jatia Brother of Mr. Shiv Kumar Jatia
Mr. Raj Kumar Jatia Brother of Mr. Shiv Kumar Jatia
- Entities controlled by Ascent Hotels Private Limited
Directors or their M/s Bhasin & Co.
relatives (with whom Binaguri Tea Company Private Limited
transactions current year
or previous year)
entered into during Energy Infrastructure (I) Limited
Magus Estates & Hotels Limited
6. EMPLOYEE BENEFITS
The Company has classified the various benefits provided to employees
as under:-
(a) Defined contribution plans
* Provident fund
The Company has recognized the following amounts in the statement of
profit and loss:
Employers' contribution to provident fund :- Current Year Rs. 193.33
Lakhs (Previous Year Rs. 205.37 Lakhs)
(b) Defined benefit plans
* Gratuity
* Compensated absences - Earned leave
In accordance with Accounting Standard-15 (revised 2005), actuarial
valuation was done in respect of the aforesaid defined benefit plans
based on the following assumptions-
Economic Assumptions
The discount rate and salary increases assumed are the key financial
assumptions and should be considered together; it is the difference or
'gap' between these rates which is more important than the individual
rates in isolation.
Discount Rate
The discounting rate is based on the gross redemption yield on medium
to long-term risk free investments. The estimated term of the
benefits/obligations works out to zero years. For the current valuation
a discount rate of 8.50% p.a. (Previous Year 8.50% p.a.) compound has
been used.
Salary Escalation Rate
The salary escalation rate usually consists of at least three
components, viz. regular increments, price inflation and promotional
increases. In addition to this, any commitments by the management
regarding future salary increases and the Company's philosophy towards
employee remuneration are also to be taken into account. Again a
long-term view as to trend in salary increase rates has to be taken
rather than be guided by the escalation rates experienced in the
immediate past, if they have been influenced by unusual factors.
7. DUE TO MICRO, SMALL AND MEDIUM ENTERPRISES AS DEFINED UNDER THE
MSMED ACT, 2006
As per the information available and explanations provided to us and
certified by the management, there are no amounts due to any Micro,
Small and Medium Enterprises which are outstanding for more than 45
days together with interest at the balance sheet date as defined under
the Micro, Small and Medium Enterprise Development Act, 2006.
8. CORPORATE SOCIAL RESPONSIBILITY (CSR)
Pursuant to the provisions of Section 135(5) of the Act, the Company
has formed its CSR Committee. As per the relevant provisions of the Act
read with Rule 2(1)(f) of the Companies (Corporate Social
Responsibility Policy) Rules, 2014, the Company is required to spend at
least 2% of the average net profits (determined under Section 349 of
the Companies Act, 1956, read with Section 198 of the Act) made during
the immediately preceding three financial years.
(a) Gross amount required to be spent by the Company during the year:
Rs. 76.88 Lakhs
9.DERIVATIVE INSTRUMENTS AND UN-HEDGED FOREIGN CURRENCY EXPOSURE
(a) Derivatives outstanding as at 31st March, 2015
Particulars Purpose
Forward contract to buy US$
Nil (Previous year US$ 5,816,502) Hedge of future repayment of loans
{Nil (Previous year Rs. 3,495.71
Lakhs)}
10. OTHER NOTES
(a) Due to inadequacy of profit in the Financial Year 2013-14, the
minimum remuneration paid to Mr. Shiv Kumar Jatia as Managing Director
in terms of the shareholders' ordinary resolution dated 28th September,
2010, was in excess by an amount of Rs. 61.72 Lakhs of 5% of the net
profit for that year. Consequently, the Company made an application to
the Central Government for requisite approval for waiver of recovery of
the excess remuneration, which was rejected. However, the Company has
made a representation and is proposing to obtain shareholders' approval
by means of a special resolution, in the forthcoming Annual General
Meeting, seeking waiver of recovery of the excess remuneration.
Since, the Company has incurred loss in the Financial Year 2014-15, the
minimum remuneration paid to Mr. Shiv Kumar Jatia as Managing Director
in terms of the shareholders' ordinary resolution dated 28th September,
2010, exceeds the remuneration payable in terms of Section II of Part
II of Schedule V to the Companies Act, 2013, for which the Company
proposes to obtain shareholders' approval by means of a special
resolution, in the forthcoming Annual General Meeting, seeking waiver
of recovery of the excess remuneration of Rs. 20.64 Lakhs; and
thereafter, will approach the Central Government for the requisite
approvals.
(b) Taxation
(i) No provision for tax has been made for income tax in absence of any
taxable income during the current year.
(ii) The Company has recognised deferred tax assets on employee
benefits liabilities and other statutory liabilities, however, no
deferred tax asset has been recognised in line with Accounting Standard
(AS)-12 on "Accounting For Taxes on Income" on unabsorbed depreciation
and carry forward losses in the absence of virtual certainty supported
by convincing evidence, that the Company will have sufficient future
taxable income against which such deferred tax can be realized.
(c) The Lease rentals under an operating lease have not been recognised
as expense on a straight-line basis, since, in the opinion of the
management the recognition method adopted which is as per respective
contracts, is more representative of the time pattern of the user's
benefit.
(d) Confirmation of debit & credit balances
Letters for confirmation of balances sent to parties have been received
back only in a few cases and discrepancies, if any, pointed out by the
parties are being investigated for necessary adjustments to be carried
out.
(e) As per the requirement of Schedule III of the Act, the Board of
Directors have considered the values of all assets of the Company other
then fixed assets and non-current investments, and have come to a
conclusion that these have a value on realisation in the ordinary
course of business which is not less than the value at which they are
stated in the balance sheet.
(f) Previous year's figures
The Company has reclassified or regrouped previous year figures to
conform to current year's classification/ grouping.
Mar 31, 2014
1. Corporate information
Asian Hotels (North) Limited is a public limited company domiciled in
India, incorporated under the provisions of the Companies Act, 1956 and
listed on both National Stock Exchange (NSE) and Bombay Stock Exchange
(BSE). The Company is operating a Five Star deluxe Hotel namely Hyatt
Regency in Delhi since 1982.
2 CONTINGENT LIABILITIES AND COMMITMENTS
31st March 2014 31st March 2013
(Rs. In Lakhs) (Rs. In Lakhs)
A contingent liabilities
(a) Claims against the Company 495.58 489.96
not acknowledged as debts*
* includes demand raised by Service Tax Authorities amounting to Rs.
401.10 Lakhs including penalty demand of Rs. 250.00 Lakhs (Previous
Year Rs. 467.96 Lakhs excluding interest and penalties) for earlier
years upto 2007, against which the Company has filed an appeal with
Customs, Excise and Service Tax Appellate Tribunal, New Delhi on 11th
March, 2014. The Company is contesting to have already paid the
determined balance liability before the issuance of show cause notice.
Hence the Company may not be liable to pay any demand.
* includes contingent liability of Rs 53.35 Lakhs on account of payment
to a foreign service provider, on which taxes are required to be
withheld by the Company, as per the latest order of Assessing Officer.
However, during the earlier years the Company was getting NIL
withholding tax order for the same. The Company has gone into appeal
with appropriate authorities against this order. As per the agreement
with the foreign service provider the payments to be made to him shall
be without any deduction of taxes, however, if there are any
withholding taxes the same are to be borne by the Company.
Confident of getting a NIL withholding tax order, the Company has not
provided for the expense of the withholding tax amount paid by the
Company.
(b) Municipal Corporation of Delhi introduced a new method for payment
of property tax under ''Unit Area Scheme'' w.e.f. 1st April, 2004. The
Federation of Hotels and Restaurants Association of India (FHRAI) and
the Company filed a writ petition in the High Court of Delhi against
the said new method, which is still pending. In terms of the interim
order dated 10th September, 2004 passed by the Hon''ble High Court, the
Company has been paying a sum of Rs. 54.52 Lakhs per annum based on the
Rateable Value method then existing. However, as a matter of abundant
caution, based on usage factor of ten, the Company has provided for the
difference in property tax as per Unit Area Scheme since introduction
of the said new method, alongwith interest thereon.
(c) Relating to an accident in the hotel premises, a writ petition has
been filed with Delhi High Court by a relative of the injured person,
the Company has been made one of the respondents. Any consequence on
the outcome of the case can not be ascertained.
3 SEGMENT REPORTING
The Company operates only in one reportable segment, i.e.
Hospitality/Hotel Business at one location, namely New Delhi (India).
The other business segment, i.e. power generation, though governed by
different sets of risks and returns, however, is not a reportable
segment as defined under the Accounting Standard (AS)-17 on Segment
Reporting, and therefore, no separate disclosures have been made. The
assets, liabilities and revenues relating to the said power generation
business have, however, been disclosed in the accounts separately. The
above treatment is in accordance with the guiding principles enunciated
in the said Accounting Standard.
4 OTHER NOTES
(a) Confirmation of debit & credit balances
Letters for confirmation of balances sent to parties have been received
back only in a few cases and discrepancies, if any, pointed out by the
parties are being investigated for necessary adjustments to be carried
out.
(b) As per the requirement of revised Schedule VI, the Board of
Directors have considered the values of all assets of the Company other
then fixed assets and non-current investments, and have come to a
conclusion that these have a value on realisation in the ordinary
course of business which is not less than the value at which they are
stated in the balance sheet.
(c) Previous year''s figures
The Company has reclassified or regrouped previous year figures to
conform to current year''s classification/ grouping.
Mar 31, 2013
1. Corporate information
Asian Hotels (North) Limited is a public limited company domiciled in
India'' incorporated under the provisions of the Companies Act'' 1956 and
listed on both National Stock Exchange (NSE) and Bombay Stock Exchange
(BSE). The Company is operating a Five Star deluxe Hotel namely Hyatt
Regency in Delhi since 1982.
2 seGment rePortinG
The Company operates only in one reportable segment'' i.e.
Hospitality/Hotel Business at one location'' namely New Delhi (India).
The other business segment'' i.e. power generation'' though governed by
different sets of risks and returns'' however'' is not a reportable
segment as defned under the Accounting Standard (AS)-17 on Segment
Reporting'' and therefore'' no separate disclosures have been made. The
assets'' liabilities and revenues relating to the said power generation
business have'' however'' been disclosed in the accounts separately. The
above treatment is in accordance with the guiding principles enunciated
in the said Accounting Standard.
3 relAted PArtY disClosUres
(a) individual and his relatives having control over the Company
(either directly or indirectly)
(i) Mr. Amritesh Jatia'' Director
(ii) Mr. Shiv Kumar Jatia'' Chairman & Managing Director
(b) Group Companies which signifcantly infuence the Company (either
individually or with others)
(i) Yans Enterprises (H.K.) Limited'' an overseas entity (ii) Fineline
Holdings Limited'' an overseas entity
(c) Group Companies which are signifcantly infuenced by the Company
(either individually or with others)
(i) Fineline Hospitality & Consultancy Pte. Limited'' Mauritius'' a
subsidiary company (wholly owned w.e.f. 29th January'' 2013)
(ii) Magus Estates and Hotels Limited'' India'' a subsidiary company
(upto 28th January'' 2013)
(iii) Lexon Hotel Ventures Limited'' Mauritius'' a subsidiary company
(w.e.f. 29th January'' 2013)
(iv) Leading Hotels Limited'' India'' a subsidiary company (w.e.f. 29th
January'' 2013)
4. emPloYee BeneFits
The Company has classifed the various benefts provided to employees as
under:-
(a) Defned contribution plans
 Provident fund
The Company has recognized the following amounts in the statement of
proft and loss:
Employers'' contribution to provident fund :- Current Year Rs. 211.74
Lakhs (Previous year Rs. 217.59 Lakhs)
(b) Defned beneft plans
- Contribution to Gratuity funds
- Compensated absences - Earned leave
In accordance with Accounting Standard 15 (revised 2005)'' actuarial
valuation was done in respect of the aforesaid defned beneft plans
based on the following assumptions-
economic Assumptions
The discount rate and salary increases assumed are the key fnancial
assumptions and should be considered together; it is the difference or
''gap'' between these rates which is more important than the individual
rates in isolation.
discount rate
The discounting rate is based on the gross redemption yield on medium
to long term risk free investments. The estimated term of the
benefts/obligations works out to zero years. For the current valuation
a discount rate of 8.00% p.a. (previous year 8.50%) compound has been
used.
5. dUe to miCro'' smAll And mediUm enterPrises As deFined Under tHe
msmed ACt'' 2006
As per the information available and explanations provided to us and
certifed by the management'' there are no amounts due to any Micro''
Small and Medium Enterprises which are outstanding for more than 45
days together with interest at the Balance sheet date as defned under
the Micro'' Small and Medium Enterprise Development Act'' 2006.
6. imPAirment
The Company has not recognised any loss on impairment in respect of
assets of the Company in terms of Accounting Standard (AS) 28 on
"Impairment of Assets" since in the opinion of the Management'' as
confrmed by the Audit Committee'' the reduction in value of any asset''
to the extent required'' has already been provided for in the books. In
respect of the assets at the subsidiary the impairment testing is based
on the realisable value of underlying assets as tested at the level of
the Board of Directors at the subsidiary and as confrmed by the Audit
Committee of the Company.
7. otHer notes
(a) During the fnancial year 2011-12'' 76782214 3.5% Optionally
Convertible Redeemable Preference Shares of USD 1 each held by the
Company in FHCPL were prematurely redeemed and the redemption proceeds
of USD 76.78 millions were converted into a foreign currency loan
effective 30th September'' 2011. Interest accrued on the said loan for
18 months period ended 31st March'' 2013'' amounting to USD 5.42 million
was due and payable on that date. The interest amount of USD 5.42
million and a part of the said loan'' to the extent of USD 31.73
million'' aggregating to USD 37.15 million were deployed to subscribe
additional No Par Value ordinary shares of FHCPL after 31st March''
2013.
(b) Confrmation of debit & credit balances
Letters for confrmation of balances sent to parties have been received
back only in a few cases and discrepancies'' if any'' pointed out by the
parties are being investigated for necessary adjustments to be carried
out.
(c) As per the requirement of revised Schedule VI'' the Board of
Directors have considered the values of all assets of the Company other
then fxed assets and non-current investments'' and have come to a
conclusion that these have a value on realisation in the ordinary
course of business which is not less than the value at which they are
stated in the balance sheet.
(d) Previous year''s fgures
The Company has reclassifed or regrouped previous year fgures to
conform to current year''s classifcation/ grouping.
Mar 31, 2012
1. Corporate Information
Asian Hotels (North) Limited is a public limited company domiciled in
India, incorporated under the provisions of the Companies Act, 1956 and
listed on both National Stock Exchange (NSE) and Bombay Stock Exchange
(BSE). The Company is operating a Five-star deluxe hotel namely Hyatt
Regency in Delhi since 1982.
(a) Rights, preferences and restrictions attached to Equity shares
The Company has only one class of equity shares having a par value of
Rs. 10 per share. Each holder of equity shares is entitled to one vote
per share. The Company declares and pays dividend in Indian Rupees. The
dividend proposed by the Board of Directors is subject to the approval
of the shareholders in the ensuing Annual General Meeting. For the year
ended 31st March 2012, the amount of per share dividend proposed as
distribution to equity shareholders is Rs.1.50 (31st March 2011: Rs.
2.50). In the event of liquidation of the Company, the holders of
equity shares will be entitled to receive remaining assets of the
Company, after distribution of all preferential amounts. The
distribution will be in proportion to the number of equity shares held
by the shareholders.
(b) Rights, preferences and restrictions attached to NCPs
NCPS carry a cumulative dividend of 1% p.a. Each holder of NCPS is
entitled to preferential dividend and preferential distribution on
liquidation of the Company. These shares carry no voting right except
for one vote per share only on resolutions which directly affect their
rights.
*During the previous year, the entire lot of 6,259,255 1% Fully
Convertible Preference Shares (FCPS) were converted into equity shares
of Rs. 10 each at a price of Rs. 419.80 per equity share, as computed
in accordance with the mechanism provided in the Scheme of Arrangement
and Demerger (the Scheme of demerger), as sanctioned by the High Court
of Delhi, read with provisions relating to 'Preferential Issue' under
SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009.
Consequently, 8,051,447 equity shares of Rs. 10 each had been issued.
Nature of security and terms of repayment for secured long term
borrowings:
(a) DBS Bank Limited -Rupee loan (carried interest @ 12.95%) and
external commercial borrowings (carried interest range 4.2% to 5.95%)
are secured / to be secured by exclusive first charge of land &
building of Hotel Hyatt Regency Delhi; Personal guarantee of Chairman &
Managing Director, pledge of shares held by him and an entity
controlled by him; and pledge of shares representing Company's
investment in foreign subsidiary Company. Rupees loan balance is
repayable in 18 equal quarterly installments and External Commercial
Borrowings are repayable as under: a. USD 217.50 lakhs is payable in 24
quarterly installments commencing from September, 2012; b. USD 530.00
lakhs is payable in 12 semi-annual installments commencing from April,
2013 and; c. USD 101.94 lakhs is payable in 12 semi-annual installments
commencing from April, 2014.
(b) Axis Bank Limited -Rupee loan (carried interest @ 13.00%) is
secured by exclusive first charge on moveable fixed assets of the
Company - present & future; Personal guarantee of Chairman & Managing
Director and Second Charge to be created on immovable assets of Hotel
Hyatt Regency Delhi. Balance is repayable in 19 quarterly installments
upto March 2017.
(c) Punjab National Bank-Rupee loan for business of generation of
electricity (carried interest @ 14.25%) was secured by first charge by
way of mortgage of freehold land and hypothecation of plant and
machinery pertaining to windmills situated at Sinner & Sangli, Maharashtra.
(d) ING Vysya Bank-Rupee loan for business of generation of electricity
(carried interest @ 12.50%) is secured by first charge and /or
hypothecation of freehold land, plant & machinery and book-debts
pertaining to the windmills situated at Sinner & Sangli in Maharashtra
and personal guarantee of Chairman & Managing Director. Balance
repayable in 19 equal installment upto October, 2016.
(e) Axis Bank-Rupee loan for acquisition of vehicles (carried interest
@ 11.12%) is secured against hypothecation of certain vehicles. Balance
repayable in 28 monthly installments upto July, 2014.
(f) ICICI Bank-Rupee loan for acquisition of vehicles (carried interest
@ 7.75% to 8.50%) is secured against hypothecation of certain vehicles.
Balance repayable in 17 monthly installments upto August, 2013.
(g) Kotak Mahindra Prime Limited -Rupee loan for acquisition of
vehicles (carried interest @ 7.50% to 10.28%) is secured against
hypothecation of certain vehicles. Balance repayable in 37 monthly
installments upto April, 2015.
(a) Other loans and advances from DBS Bank Limited carries interest @
12.95% and is secured / to be secured by exclusive first charge of land
& building of Hotel Hyatt Regency Delhi; Personal guarantee of Chairman
& Managing Director, pledge of shares held by him and an entity
controlled by him; and pledge of shares representing Company's
investment in foreign subsidiary Company.
(b) Other loans and advances from Punjab National Bank carried interest
@ 10.45% and is secured by second charge (hypothecation) on all
moveable assets, entire plant & machinery and furniture & fixtures
forming part of fixed assets at Hotel Hyatt Regency Delhi.
(c) There is no continuing default in repayment of loans and interest
as on 31st March 2012.
(a) Advances from customers includes Rs. 11,500 Lakhs (Previous Year
Rs. 6,500 Lakhs) received from prospective buyer against agreements for
sale/ fit outs of certain constituents forming part of the SERVICED
APARTMENT PROJECT.
(b) Security deposits (interest free) includes Rs. 1,400 lakhs
(Previous Year Rs. 900 lakhs) received from a company in which certain
relatives of directors of the Company are interested, against
expression of interest for forging a Joint Venture with the Company in
respect of its KOLKATA PROJECT {Refer Note 14(a)}.
(c) Statutory liabilities includes provision for difference of property
tax along with interest thereon amounting to Rs. 2,312.29 Lakhs,
Previous Year 1,942.52 Lakhs {Refer Note 27A(b)}.
(a) The Company, based on the report by a Certified Valuer, had
revalued land and building of Hotel Hyatt Regency Delhi (the land and
building being more than twenty years old) by adopting Cost of
Contractor's method, on 28th February 2007 at Rs. 85,700 Lakhs. The
same resulted in an increase in the value of land and building of an
amount of Rs. 82,131.81 Lakhs, and therefore, an equivalent amount had
been credited to the Revaluation Reserve.
(b) Due to increase in the value of assets, as stated above, there was
an additional charge of Rs. 53.91 Lakhs (Previous Year Rs. 53.91
Lakhs), for the current year, on account of depreciation. Resultantly,
an equivalent amount of Rs. 53.91 Lakhs (Previous Year Rs. 53.91 Lakhs)
has been withdrawn from the Revaluation Reserve and credited to the
statement of profit and loss.
(g) Delhi Development Authority vide Notification No. 2034E dated
12.08.2008 has, subject to fulfillment of certain conditions, granted
an additional FSI, which in case of the Company, works out to approx.
15000 square meters. The Company is in the process of utilizing the
aforesaid additional FSI partially for expansion of the existing
facilities (EXPANSION PROJECT) and the balance as a new Serviced
Apartments Block (SERVICED APARTMENT PROJECT) with permitted commercial
area at Hotel Hyatt Regency Delhi.
(b) Building under construction includes : -
- Rs.10,799.42 Lakhs paid to Municipal Corporation of Delhi as
additional FSI charges and labour cess
- Rs. 211.65 Lakhs paid for repossession of areas for construction of
spa
(c) Interest expenses and net gain/(loss) on foreign currency
transaction and translation are related to certain loans (including
foreign currency external commercial borrowings) taken for projects
under construction.
(d) The Ministry of Corporate Affairs vide Notification dated March 31,
2009, as amended from time to time, had given an option to the
companies whereby the exchange differences pertaining to long term
foreign currency monetary items relating to acquisition of a
depreciable asset can be added to or deducted from the cost of asset
and shall be depreciated over the balance life of the asset. The
Company had adopted the said option given under paragraph 46 of
Accounting Standard (AS) 11. Accordingly, the net loss on foreign
currency transaction and translation of Rs. 1,028.88 Lakhs (previous
year Net gain on foreign currency transaction and translation of Rs.
440.65 Lakhs) on long term foreign currency loans relating to projects
under construction is included in capital work-in-progress, as a part
of fixed assets.
(a) Pursuant to a Joint-venture cum Subscription Agreement executed on
18th October 2010, the Company made a strategic investment of
approximately Rs. 39,106.22 Lakhs in Fineline Hospitality & Consultancy
Pte. Ltd., Mauritius, (Fineline Hospitality) previously known as Darius
Holdings Ltd., acquiring controlling interest of 53% in its Equity and
Preference Share Capital in accordance with extant regulations framed
under the Foreign Exchange Management Act, 1999. Fineline Hospitality
is to engage in the business of providing consultancy, project
development and offshore project management primarily in the
hospitality sector.
(b) With effect from 18th October, 2010, Fineline Hospitality along
with two overseas subsidiaries and an Indian subsidiary became the
Company's subsidiary. The Indian subsidiary is Magus Estates and Hotels
Limited (Magus). Magus owns and operates "Four Seasons Mumbai". The
overseas subsidiaries of Fineline Hospitality namely, Most Prof
Hospitality & Consultancy Pte. Ltd. and Lexon Ventures Ltd. were
amalgamated with Fineline Hospitality on 23rd August, 2011 and 14th
September, 2011 respectively following the purchase method at the value
of assets including investments at fair value, based on the Valuation
Report on the basis of which the Company made its initial investment in
Fineline Hospitality stated above.
(c) 76,782,214 3.5% Optionally Convertible Redeemable Preference Shares
of USD 1 each (OCRPS) held by the Company in Fineline Hospitality were
prematurely redeemed and the redemption proceeds were converted into
foreign currency loan effective 30th September, 2011. Correspondingly,
on the same date residual outstanding OCRPS which were held by Fineline
Holdings Ltd., an overseas entity, in which certain directors are
interested, in Fineline Hospitality were converted into 3.5% Redeemable
Preference Shares thereby obviating the possibility of dilution in the
Company's stake in Fineline Hospitality.
(d) During the year, the Company has taken a foreign currency loan
equivalent to Rs 5,000 Lakhs and made investment in 5% Cumulative
Redeemable Preference Shares (CRPS) of Fineline Hospitality, based on
Revalidation Report issued by the merchant banker.
(a) In response to a financial bid made to West Bengal Housing
Infrastructure Development Corporation Limited (WBHIDCO), the Company
had been offered an allotment of a plot of land measuring six acres
(approx.) on freehold basis for setting up of a five star hotel and
allied facilities (KOLKATA PROJECT). Advance for Capital goods includes
Rs. 2,921.49 Lakhs (Previous Year Rs.1,311.49 Lakhs) paid as earnest
money, which represents 59% (Previous Year 25%) of the total cost of
said allotted land. The balance is due for payment in the next
financial year.
2 CONTINGENT LIABILITIES AND COMMITMENTS
31st March 2012 31st March 2011
(Rs. In Lakhs) (Rs. In Lakhs)
A CONTINGENT LIABILITIES
(a) Claims against the
Company not acknowledged
as debts* 499.68 530.32
* includes demand raised
by Service Tax Authorities
amounting to Rs. 467.96
lakhs (excluding interest
and penalties) for earlier
years upto 2007, against which
the Company has filed an
appeal with the said authorities.
The Company may, however, be not
liable to pay the demand for the
periods till 18th April, 2006 in
view of the judgement of the
Hon'ble Supreme Court of India
in the case of Indian National
Shipowners Association whereby
it is held that no service tax is
leviable on certain services
prior to 18th April 2006.
(b) Municipal Corporation of
Delhi introduced a new
method for payment
of property tax under 'Unit
Area Scheme' w.e.f. 1st April,
2004. The Federation of Hotels
and Restaurants Association of
India (FHRAI) and the Company
filed a writ petition in the
High Court of Delhi against the
said new method, which is still
pending. In terms of the interim
order dated 10th September,
2004 passed by the Hon'ble High
Court, the Company has been paying
a sum of Rs. 54.52 Lakhs per annum
based on the Rateable Value method
then existing. However, as a matter
of abundant caution, based on usage
factor of ten, the Company has
provided for the difference in
property tax as per Unit Area Scheme
since introduction of the said new
method, alongwith interest thereon.
c) The Company has received a show
cause notice from Directorate of
Revenue Intelligence (DRI) in
connection with alleged misuse of
seven cars imported under EPCG scheme.
The matter is being dealt with by the
Company through their lawyers and on
the insistence of the authorities,
the Company has paid an amount of
Rs. 220.00 lakhs (included under
'Advances recoverable in cash or in
kind or for value to be received'
Note no. 14 -Loans and Advances) as
custom duty under protest.
Further, the Company has also provided
a bank guarantee for Rs. 47.23
lakhs in the said matter.
B COMMITMENTS
(a) Estimated amount of contracts
remaining to be executed on capital
account and not 5750.39 6640.10
provided for:
(b) Lease commitments
(i) Future commitments in respect
of assets acquired under Finance
Schemes
Minimum installments
payable within one year 160.19 147.17
later than one year but not
later than 64.10 179.88
five years
Present value of minimum
installments
payable within one year 147.95 128.17
later than one year but
not later than 60.53 168.97
five years
(ii) Future minimum lease
payments receivable by the
Company in respect of non-
cancellable operating leases
(other than land) for shops
and vehicles entered
into by the Company :
Not later than one year 105.50 33.23
Later than one year and not later than 95.43 46.62
five years
(iii) Future minimum lease
payments payable by the Company
in respect of non- cancellable
operating leases (other than land)
for rented apartments entered into
by the Company :
Not later than one year 57.96 -
Later than one year and
not later than 8.25 -
five years
3 SEGMENT REPORTING
The Company operates only in one reportable segment, i.e.
Hospitality/Hotel Business at one location, namely New Delhi (India).
The other business segment, i.e. power generation, though governed by
different sets of risks and returns, however, is not a reportable
segment as defined under the Accounting Standard (AS)-17 on Segment
Reporting, and therefore, no separate disclosures have been made. The
assets, liabilities and revenues relating to the said power generation
business have, however, been disclosed in the accounts separately. The
above treatment is in accordance with the guiding principles enunciated
in the said Accounting Standard.
4 Related Party Disclosures
(a) Group Companies which significantly influence the Company (either
individually or with others)
(i) Yans Enterprises (H.K.) Ltd., an overseas entity
(ii) Fineline Holdings Ltd., an overseas entity
(b) Group Companies which are significantly influenced by the Company
(either individually or with others)
(i) Fineline Hospitality & Consultancy Pte Ltd, Mauritius, a subsidiary
company
(ii) Magus Estates & Hotels Limited, India, a subsidiary company
(ii) Further, the Company had taken a legal advise that in view of the
multiplicity of transactions / information, it is not practicable to
identify and disclose the food / beverage / room or other sales to the
employees / guests of the related parties at any of the outlets of the
hotel owned by the Company and such transactions do not require prior
approval from Central Government under Section 297 of the Companies
Act, 1956.
5 employee benefits
The Company has classified the various benefits provided to employees
as under:-
(a) Defined contribution plans
- Provident fund
(b) Defined benefit plans
- Contribution to Gratuity funds
- Compensated absences - Earned leave
In accordance with Accounting Standard 15 (revised 2005), actuarial
valuation was done in respect of the aforesaid defined benefit plans
based on the following assumptions- Economic Assumptions
The discount rate and salary increases assumed are the key financial
assumptions and should be considered together; it is the difference or
'gap' between these rates which is more important than the individual
rates in isolation.
Discount Rate
The discounting rate is based on the gross redemption yield on medium
to long term risk free investments. The estimated term of the
benefits/obligations works out to zero years. For the current valuation
a discount rate of 8.50% p.a. (previous year 8.00%) compound has been
used. salary Escalation Rate
The salary escalation rate usually consists of at least three
components, viz. regular increments, price inflation and promotional
increases. In addition to this any commitments by the management
regarding future salary increases and the Company's philosophy towards
employee remuneration are also to be taken into account. Again a
long-term view as to trend in salary increase rates has to be taken
rather than be guided by the escalation rates experienced in the
immediate past, if they have been influenced by unusual factors.
6 DUE TO MICRO, SMALL AND MEDIUM ENTERPRISES AS DEFINED UNDER THE
MSMED ACT, 2006
As per the information available and explanations provided to us and
certified by the management, there are no amounts due to any Micro,
Small and Medium Enterprises which are outstanding for more than 45
days together with interest at the Balance Sheet date as defined under
the Micro, Small and Medium Enterprise Development Act, 2006.
7 IMPAIRMENT
The Company has not recognised any loss on impairment in respect of
assets of the Company in terms of Accounting Standard (AS)
28 on "Impairment of Assets" since in the opinion of the Management, as
confirmed by the Audit Committee, the reduction in value of any asset,
to the extent required, has already been provided for in the books. In
respect of the assets at the subsidiary the impairment testing is based
on the realisable value of underlying assets as tested at the level of
the Board of Directors at the subsidiary and as confirmed by the Audit
Committee of the Company.
8 OTHER NOTES
(a) Post restructuring of the Company in terms of the Scheme of
demerger, as sanctioned by the High Court of Delhi, each of promoter
groups namely the Jatia Group, Gupta Group and Saraf Group, undertook
inter-se transfer of their respective shareholding in the three
de-merged entities pursuant to Regulation 3(1)(e) of the SEBI
(Substantial Acquistion of Shares and Takeovers) Regulations, 1997, on
23rd August, 2010, as envisaged in Clause 5.8 of the Scheme of
demerger. Resultantly, in the previous year, the Jatia Group acquired
shares held in the Company by the other two promoter groups named
above.
(b) Confirmation Of Debit & Credit Balances
Letters for confirmation of balances sent to parties have been received
back only in a few cases and discrepancies, if any, pointed out by the
parties are being investigated for necessary adjustments to be carried
out.
(c) In the opinion of the Board of Directors, all assets of the Company
except fixed assets and non-current investments have a value on
realization in the ordinary course of business which is not less than
the value at which they are stated in the balance sheet.
(d) Previous year's figures
Till the year ended 31st March 2011, the Company was using pre-revised
Schedule VI to the Companies Act, 1956, for preparation and
presentation of its financial statements. During the year ended 31st
March 2012, the revised Schedule VI notified under the Companies Act,
1956, has become applicable. The Company has reclassified previous year
figure to conform to current year's classification. The adoption of
revised Schedule VI does not impact recognition and measurement
principles followed for preparation of financial statements. However,
it significantly impacts presentation and disclosures made in the
financial statements, particularly presentation of the balance sheet.
Mar 31, 2011
1. Contingent Liabilities :
Prior Period
Rs in lakhs Rs in Lakhs
(a) Outstanding Capital
Expenditure Commitments* 6,640.10 660.64
(b) Claims against the Company
not acknowledged as debts ** 530.32 508.49
* includes custom duty as may be payable.
** includes demand raised by the Service Tax authorities on Hotel Hyatt
Regency Delhi amounting to Rs.467.96 lakhs (excluding interest and
penalties) for earlier years upto 2007, against which the Company has
fled an appeal with the said authorities. The Company may, however, be
not liable to pay the demand for the periods till 18th April, 2006 in
view of the judgement of the HonÃble Supreme Court of India in the case
of Indian National Shipowners Association whereby it held that no
service tax is leviable on certain foreign services prior to 18th April
2006.
2. NEW PROJECTS :
(a) Delhi Development Authority vide Notification No. 2034E dated
12.08.2008 has, subject to fulfillment of certain conditions, granted
an additional FSI, which in case of the Company, works out to approx.
15000 square meters. The Company is in the process of utilizing the
aforesaid additional FSI partially for expansion of the existing
facilities (EXPANSION PROJECT) and the balance as a new Serviced
Apartments Block (SERVICED APARTMENT PROJECT) with permitted commercial
area at Hotel Hyatt Regency Delhi.
(b) In response to a financial bid made to West Bengal Housing
Infrastructure Development Corporation Limited (WBHIDCO), the Company
has been offered allotment of a plot of land measuring six acres
(approx.) on freehold basis for setting up of a five star hotel
(KOLKATA PROJECT). The Company has already paid 25% of the land price
as earnest money.
3. (a) Advances from Customers includes Rs. 6500 Lakhs received from
prospective buyer against agreements for sale/ ftouts of
certain constituents forming part of the SERVICED APARTMENT PROJECT.
(b) Other Liabilities includes an amount of Rs 900 lakhs received, in
respect of KOLKATA PROJECT, as expression of interest for forging a
Joint Venture with a company in which a director is related to certain
directors of the Company .
4. Note:
(a) Building under construction includes : -
à Rs.10799.42 lakhs paid to Municipal Corporation of Delhi as
additional FAR charges and labour cess à Rs. 211.65 paid for
repossession of areas for construction of spa
(b) Interest on loans and difference in exchange pertaining to loans
(including foreign currency external commercial borrowings) taken for
new projects.
(c) The Company intends to capitalise the major part of incidental
expenditure when commercial operations begin in accordance with the
accepted accounting principles.
5. Post restructuring of the Company in terms of the Scheme of
Arrangement and Demerger (the Scheme), as sanctioned by the High Court
of Delhi, each of promoter groups namely the Jatia Group, Gupta Group
and Saraf Group, undertook inter-se transfer of their respective
shareholding in the three de-merged entities pursuant to Regulation
3(1)(e) of the SEBI (Substantial Acquistion of Shares and Takeovers)
Regulations, 1997, on 23rd August, 2010, as envisaged in Clause 5.8 of
the Scheme. Resultantly, the Jatia Group acquired shares held in the
Company by the other two promoter groups named above.
6. The Company, based on the report by a Certified Valuer, had
revalued land and building of Hotel Hyatt Regency Delhi (the land and
building being more than twenty years old) by adopting Cost of
Contractor's method, on 28th February, 2007 at Rs. 85,700.00 Lakhs. The
same resulted in an increase in the value of land and building of an
amount of Rs. 82,131.81 Lakhs, and therefore, an equivalent amount had
been credited to the Revaluation Reserve Account.
Due to increase in the value of assets, there was an additional charge
of Rs. 53.91 Lakhs (Prior Period Rs. 26.96 Lakhs), for the current
year, on account of depreciation. Resultantly, an equivalent amount of
Rs 53.91 Lakhs (Prior period Rs. 26.96 Lakhs) has been withdrawn from
the Revaluation Reserve Account and credited to the Profit & Loss
Account. In the prior period, the Loss amounting to Rs.62,414.67 Lakhs
arising to the Company from restructuring and transfer of the Kolkata
undertaking and the Mumbai undertaking had been set off against the
Revaluation Reserve Account as envisaged in the Scheme.
7. The Company has not recognised any loss on impairment in respect
of assets of the Company in terms of Accounting Standard (AS) 28 on
"Impairment of Assets" since in the opinion of the Management, as
confirmed by the Audit Committee, the reduction in value of any asset,
to the extent required, has already been provided for in the books.
8. Letters for confirmation of balances sent to parties have been
received back only in a few cases and discrepancies, if any, pointed
out by the parties are being investigated for necessary adjustments to
be carried out.
9. The Company operates only one hotel, namely Hotel Hyatt Regency
Delhi. The power generation business of the Company is governed by
different set of risks and returns. However, it is not a reportable
segment as defined under the said Accounting Standard, and therefore,
no separate disclosures have been made. The assets, liabilities and
revenues relating to the said business have, however, been disclosed in
the accounts separately.
The above treatment is in accordance with the guiding principles
enunciated in the Accounting Standard (AS)-17 on Segment Reporting.
10. Municipal Corporation of Delhi introduced a new method for payment
of property tax under 'Unit Area Scheme' w.e.f. 1st April, 2004.
The Federation of Hotels and Restaurants Association of India (FHRAI)
and the Company fled a writ petition in the High Court of Delhi against
the said new method, which is still pending. In terms of the interim
order dated 10th September, 2004 passed by the HonÃble High Court, the
Company has been paying a sum of Rs. 54.52 Lakhs per annum based on the
Rateable Value method then existing. However, as a matter of abundant
caution, based on usage factor of ten, the Company has provided for the
difference in property tax as per Unit Area Scheme since introduction
of the said new method, alongwith interest thereon.
11. The Company has classified the various benefits provided to
employees as under:- (a) Defined contribution plans i) Provident fund
During the period, the Company has recognized the following amounts in
the profit and loss account: Employersà contribution to provident fund
Rs. 202.06 Lakhs (Prior Period Rs. 110.66 Lakhs) (b) Defined benefit
plans
a) Contribution to Gratuity funds
b) Compensated absences à Earned leave
In accordance with Accounting Standard 15 (revised 2005), actuarial
valuation was done in respect of the aforesaid defined benefit plans
based on the following assumptions-
Economic Assumptions
The discount rate and salary increases assumed are the key financial
assumptions and should be considered together; it is the difference or
Ãgapà between these rates which is more important than the individual
rates in isolation.
Discount Rate
The discounting rate is based on the gross redemption yield on medium
to long term risk free investments. The estimated term of the benefit
obligations works out to 0 years. For the current valuation a discount
rate of 8 % p.a. compound, has been used in consultation with the
employer.
12. Related Party Disclosures
a) Group Companies which significantly influence the Company (either
individually or with others)
(i) Yans Enterprises (H.K.) Ltd.
(ii) Fineline Holdings Ltd., Mauritius
b) Group Companies which are significantly influenced by the Company
(either individually or with others)
(i) Fineline Hospitality & Consultancy Pte Ltd, Mauritius, a subsidiary
company (Formerly known as Darius Holdings Limited)
(ii) Most Prof Hospitality & Consultancy Pte Ltd, Mauritius, a
sudsidiary company (Formerly known as Mostprof Investment Pte Ltd)
(iii) Lexon Ventures Limited, B.V.I., a subsidiary company
(iv) Magus Estates & Hotels Limited, India, a subsidiary company
d) Related Parties
à Subsidiaries of the Company Fineline Hospitality & Consultancy
Pte Ltd, Mauritius,
(Formerly known as Darius Holdings
Limited)
Most Prof Hospitality & Consultancy
Pte Ltd, Mauritius,
(Formerly known as Mostprof Investment
Pte Ltd)
Lexon Ventures Limited, B.V.I.
Magus Estates & Hotels Limited, India,
(covered as entity controlled by
directors during prior period)
à Erstwhile Subsidiaries
of the Company GJS Hotels Limited
(for part of the prior Aria Hotels & Consultancy
period) Services Private Limited
Chillwinds Hotels Limited
Vardhman Hotels Limited
Regency Convention Centre
& Hotels Ltd
à Key Management Personnel Mr. Shiv Jatia
Chairman & Managing Director
Mr. Adarsh Jatia Joint
Managing Director, for part of
the year
Mr. Sushil Gupta
Managing Director (West),
for part of the prior period
Mr. Umesh Saraf Managing Director
(East), for part of the prior period
à Relatives (other than Mr. Sandeep Gupta
directors) of Key Son of Mr. Sushil Gupta
Management Personnel (for part of the year)
Mr R S Saraf Father of
Mr. Umesh Saraf (for part
of the year)
à Entities controlled by / Asian Hotels (East) Limited
Directors Erstwhile (previously Vardhman Hotels
Directors or their Limited) Asian Hotels (West)
relatives (with whom Limited (previously Chillwinds
transactions entered Hotels Limited) Bell Ceramics
into during current Ltd M/s Bhasin & Co
year or prior period) Wel Inter Trade Private
Limited
The Bina Gudi Tea
Estates Limited
à Entities controlled by / Energy Infrastructure (I)
Directors Erstwhile Limited
Directors or their Nepal Travel Agency Pvt Ltd.
relatives (with whom Eden Park Hotels Pvt. Ltd
transactions entered Ascent Hotels Private Limited
into during current Godfrey Philips Ltd
year or prior period)
13. During the year, the entire lot of 6259255 1% Cumulative Fully
Convertible Preference Shares (FCPS) were converted into equity shares
of Rs. 10/- each at a price of Rs.419.80 per equity share, as computed
in accordance with the provisions relating to 'Preferential Issue'
under SEBI (Issue of Capital and Disclosure Requirements) Regulations,
2009. Consequently, 8,051,447 equity shares of Rs. 10/- each have been
allotted, taking the aggregate paid up equity capital to
Rs.19,45,32,290/-.
14. 49 lakhs 1% Cumulative Redeemable Non-convertible Preference
Shares (NCPS) of Rs. 10/- each were due for redemption on 30th June,
2010, in terms of issuance thereof. The same have been rescheduled for
redemption on 30th June, 2013, with the consent of the holder thereof,
namely Magus Estates and Hotels Limited, which has during the year
become a subisidiary of the Company.
15. Pursuant to a Joint-venture cum Subscription Agreement executed in
October 2010, the Company made a strategic investment of approx. Rs.
391 crores in Fineline Hospitality & Consultancy Pte. Ltd., Mauritius,
(Fineline Hospitality) previously known as Darius Holdings Ltd.,
acquiring controlling interest of 53% in its Equity and Preference
Share Capital in accordance with extant regulations framed under the
Foreign Exchange Management Act, 1999. Fineline Hospitality is in the
business of providing consultancy, project development and offshore
project management primarily in the hospitality sector. Thus, with
effect from 18th October, 2010, Fineline Hospitality and its
subsidairies have become the Company's subisidiaries. One of such
subsidiaries is Magus Estates and Hotels Limited, India (Magus). Magus,
which owns and operates "Four Seasons" hotel comprising of 202 rooms in
Mumbai, is in the process of expanding its facilities to utilize the
additional FAR available under the building norms.
16. The name of the Company has been changed from Asian Hotels Limited
to Asian Hotels (North) Limited w.e.f 16th February 2010.
17. The current accounting year is for twelve months from 1st April,
2010 to 31st March, 2011, whereas the prior accounting year was for six
months from 1st October, 2009 to 31st March, 2010. The prior period
figures include one month figures of two discontinued demerged
undertakings whereas current year figures are for continuing operations
only . Hence, the figures for prior period are not comparable with
those of the current year.
18. Prior period figures have been regrouped and rearranged wherever
necessary.
Schedules 1 to 21 form an integral part of the Balance Sheet as at 31st
March, 2011 and Profit & Loss Account for the year ended on that date
Mar 31, 2010
1. Contingent Liabilities :
Prior Period
Rs in Lakhs Rs in Lakhs
(a) Outstanding Capital Expenditure
Commitments 660.64 718.10
(b) Claims against the Company not
acknowledged as debts * 508.49 617.18
* includes demand raised by the Service Tax authorities on Hotel Hyatt
Regency Delhi amounting to Rs.467.96 lakhs (excluding inter- est and
penalties) for earlier years upto 2007, against which the Company has
filed an appeal with the said authorities. The Company may, however, be
not be liable to pay the demand for the periods till 18 April, 2006 in
view of the judgement of the HonÃble Supreme Court of India in the case
of Indian National Shipowners Association whereby it held that no
service tax is leviable on certain foreign services prior to 18th April
2006.
2. The Scheme of Arrangement and Demerger (the Scheme) mooted by the
Company envisaged the trifurcation of the Company in the following
manner:-
i) Kolkata Undertaking as defned in clause 1.2.1 of the Scheme,
comprising interalia of Hotel Hyatt Regency Kolkata and invest- ments
in the shares held in GJS Hotels Limited and Regency Convention Centre
and Hotels Limited, and appropriate cash liquidity.
ii) Mumbai Undertaking as defned in clause 1.2.1 of the Scheme,
comprising interalia of Hotel Hyatt Regency Mumbai, invest- ments in
the shares held in Aria Hotels & Consultancy Services Private Limited
and deposits/advances paid towards acquisition of immovable property in
Bangalore.
iii) AHL Residual as would emerge immediately after the transfer of and
vesting in of Mumbai Undertaking and the Kolkata Undertaking in
Chillwinds Hotels Limited (Transferee Company -I) and Vardhman Hotels
Limited (Transferee Company-II) respectively.
The Scheme has been approved by the Honble High Court of Delhi vide
order pronounced on 13th January 2010 and has became effective on 11th
Febuary 2010, the day formal order sanctioning the Scheme was fled with
the Registrar of Companies, NCT of Delhi and Haryana and the same
relates back to the Appointed Date i.e 31st October 2009. The Promoter
Groups are in the process of transferring their shareholding inter-se
in the three de-merged entities as provided in Clause 5.8 of the
Scheme.
On effectiveness of the Scheme, the operations of Kolkata Undertaking
and Mumbai Undertaking have been discontinued from 1st November, 2009.
Further, operations of the Kolkata Undertaking and Mumbai Undertaking
till 31st October 2009, as defined in terms of the Scheme, constitute
discontinuing operations within the meaning of Accounting Standard (AS)
24 on "Discontinuing Operations".
As at 31st October, 2009, the carried amount of the assets of the
Kolkata undertaking were Rs 77,302.14 Lakhs (prior period Rs 40,112.29
Lakhs), and of the Mumbai undertaking were Rs 38,106.76 Lakhs (prior
period Rs 39,429.73 Lakhs) and their liabilities were Rs 22,184.84
Lakhs (prior period Rs 22,028.95 Lakhs) and Rs 30,809.39 Lakhs (prior
period Rs29,111.48 Lakhs) respectively. The following statement shows
the revenue and expenses of continuing and discontinuing operations: -
* Figures for the current period are for the period of one month, i.e.,
October 1, 2009 to October 31, 2009 and for the period of eighteen
months, i.e., April 1, 2008 to September 30, 2009 for prior period.
3. The Company, based on the report by a Certified Valuer, had
revalued land and building of Hotel Hyatt Regency Delhi by adopting
Cost of Contractors method, on 28th February 2007 at Rs. 85,700.00
Lakhs, the same resulted in an increase in the value of land and
building of an amount of Rs. 82,131.81 Lakhs, and therefore an
equivalent amount had been credited to the Revaluation Reserve Account.
Due to increase in the value of as- sets, there was an additional
charge of Rs. 26.96 Lakhs (Prior period Rs. 80.87 Lakhs), for the
current period, on account of depreciation. Resultantly, an equivalent
amount of Rs 26.96 Lakhs (Prior period Rs. 80.87 Lakhs) has been
withdrawn from the Revalua- tion Reserve Account and credited to the
Proft & Loss Account. The Loss arising to the Company from
restructuring and transfer of the Kolkata undertaking and the Mumbai
undertaking has been set off against the Revaluation Reserve Account in
terms of the Scheme (Refer clause 5.5.5(g) & 5.5.6 of the Scheme).
4. The Company has not recognised any loss on impairment in respect
of assets of the Company as is required in terms of Accounting Standard
(AS) 28 on "Impairment of As- sets" since in the opinion of the
Management, as confrmed by the Audit Committee, the reduction in value
of any asset, to the extent required, has already been provided for in
the books.
5. Letters for confrmation of balances sent to parties have been
received back only in a few cases and discrepancies, if any, pointed
out by the parties are being investigated for necessary adjustments to
be carried out.
6. The Company operated an integrated hotel business at three
geographical locations upto the Appointed Date in terms of the Scheme,
i.e., 31st October 2009. The operations of these hotels namely Hyatt
Regency Delhi, Hyatt Regency Kolkata and Hyatt Regency Mumbai are
governed by the same set of risks and returns and hence have been
consid- ered as representing a Single Segment. Post effectiveness of
the Scheme, the Company operates only one hotel, namely Hotel Hyatt
Regency Delhi. The power generation busi- ness of the Company is
governed by different set of risks and returns. However, it is not a
reportable segment as defned under the said Accounting Standard, and
therefore, no separate disclosures have been made. The assets,
liabilities and revenues relating to the said business have, however,
been disclosed in the accounts separately.
The above treatments are in accordance with the guiding principles
enunciated in the Accounting Standard (AS-17) on Segment Reporting.
7. Municipal Corporation of Delhi introduced a new method for payment
of property tax un- der Unit Area Scheme w.e.f. 1st April, 2004. The
Federation of Hotels and Restaurants Association of India (FHRAI) and
the Company fled a writ petition in the High Court of Delhi against the
said new method, which is still pending. However, in terms of the
interim order dated 10th September, 2004 passed by the HonÃble High
Court, the Company has been paying a sum of Rs. 54.52 Lakhs per annum
based on the Rateable Value method then existing. However, as a matter
of abundant caution, based on usage factor of ten, the Company has
provided for the difference in property tax as per Unit Area Scheme and
the payments made since introduction of the said new method, alongwith
interest thereon.
8. The Company has classifed the various benefts provided to
employees as under:-
(a) Defned contribution plans
i) Provident fund
During the period, the Company has recognized the following amounts in
the profit and loss account:
Employers contribution to
provident fund
Rs. 110.66 Lakhs (prior period
Rs. 527.33 Lakhs)
(b) Defned beneft plans
a) Contribution to Gratuity funds
b) Compensated absences à Earned leave
In accordance with Accounting Standard 15 (revised 2005), actuarial
valuation was done in respect of the aforesaid defned beneft plans
based on the following assumptions- Economic Assumptions:
The discount rate and salary increases assumed are the key fnancial
assumptions and should be considered together; it is the difference or
gap between these rates which is more important than the individual
rates in isolation. Discount Rate:
The discounting rate is based on the gross redemption yield on medium
to long term risk free investments. The estimated term of the beneft
obligations works out to 0 years. For the current valuation a discount
rate of 8 % p.a. compound, has been used in consultation with the
employer. Salary Escalation Rate:
The salary escalation rate usually consists of at least three
components, viz. Regular increments, price infation and promotional
increases. In addition to this any commitments by the management
regarding future salary increases and the companyÃs philosophy towards
employee remuneration are also to be taken into account. Again a
long-term view as to the trend in salary increase rates has to be taken
rather than be guided by the escalation rates experienced in the
immediate past, if they have been infuenced by unusual factors. The
assumptions used are summarised in the following table:
*Note: - Transfer of obligations as on 31st October 2009 relating to
Mumbai Undertaking and Kolkata Undertaking pursuant to the Scheme: -
9. Related Party Disclosures
a) Parties which significantly influence the Company (either
individually or with others) (i) Yans Enterprises (H.K.) Ltd. (ii) DSO
Ltd. (iii) Saraf Industries Ltd.
Note : 1. In view of the multiplicity of transactions / information, it
is not practicable to identify and disclose the food / beverage / room
or other sales to the employees / guests of the related parties at any
of the outlets of the Hotels of the Company
Note : 2. In view of the legal opinion taken by the Company, the above
said transactions does not require prior approval from Central
Government under Section 297 of the Companies Act, 1956.
c) Related Parties
- Erstwhile Subsidiaries of
the Company GJS Hotels Limited
Aria Hotels & Consultancy
Services Private Limited
Chillwinds Hotels Limited
Vardhman Hotels Limited
Regency Convention Centre
& Hotels Ltd
- Key Management
Personnel Mr. Sushil Gupta Managing Director
(West), for part of
the period
Mr. Shiv Jatia Managing Director
(North)
Mr. Umesh Saraf Managing Director
(East), for part
of the period
- Relatives (other than
directors) of Mr. Sandeep Gupta Son of Mr. Sushil
Gupta
Key Management Personnel Mr. R.G. Saraf Uncle of Mr. Umesh
Saraf
- Entities controlled by
Directors/Erstwhile Asian Hotels (East)
Limited Juniper Hotels Pvt
Ltd
Directors or their
relatives (with whom (previously Vardhman
Hotels Limited) Magus Estates &
Hotels Ltd
transactions entered into
during current Asian Hotels (West)
Limited Nepal Travel Agency
Pvt Ltd
or prior period) (previously Chillwind
Hotels Limited) Ram Pyari Devi
Charitable Trust
Bell Ceramics Ltd WEL Intertrade Ltd
M/s Bhasin & Co Eden Park Hotels
Pvt. Ltd
Choice Hospitality
(India)Pvt Ltd Energy Infrastruc
ture (I) Limited
Godfrey Philips Ltd
10. (a) Future commitments in respect of minimum lease payments
payable for non cancellable operating leases (other than land) entered
into by the Company :
11. A. The Company has been exempted vide order no 46/91/2008-CL-III
dated 23rd May 2008 of Ministry of Corporate Affairs, Government of
India under Section 211 (4) of the Companies Act, 1956 from disclosure
of quantitative details of turnover, opening and closing stock,
purchases, production and consumption of raw materials for the
financial years ended March 31, 2008, March 31, 2009 and March 31,
2010.
12. Upon the scheme becoming effective on 11th February 2010, the
existing 22,803,564 equity shares of the Company stood cancelled and
extinguished and 11,401,782 fresh equity shares of Rs 10/- each were
issued in lieu thereof to those shareholders who held the existing
shares as on the entitlement date, in terms of the Scheme.
13. In the financial year 2007-08, the Company with an object to
facilitate trifurcation under the Scheme had allotted 2 crores 1%
Cumulative Redeemable Non Convertible Preference Shares (NCPS) of Rs
10/- each at a premium of Rs 80/- per share. As per the respective
Subscription Agreements with Infrastructure Development Finance Company
Limited (IDFC) and Magus Estate and Hotels Limited (ÃMagusÃ, a Company
in which two of the directors are interested) for subscription to the
said NCPS, the Company was obligated to redeem the said Preference
Shares in three installments of 25%, 25% and 50% (including premiums)
respectively beginning June 30, 2008 in three annual installments
Upto the end of the prior period, 50% of such NCPS have already been
redeemed. Capital Redemption Reserve for redeemed NCPS represents
reserve created on redemption of NCPS
Capital Redemption Reserve for redeemable NCPS represents the amount
payable on redemption of NCPS yet to be redeemed over and above the
amount available in Securities Premium Account.
Aforesaid NCPS, Securities premium on NCPS, Capital Redemption Reserve
for redeemed NCPS and Capital Redemption Reserve for redeemable NCPS,
have been allocated to Transferee Company-I and Transferee Company-II
as per the terms of the Scheme {Refer clause 5.4.2 (ii) and also clause
5.5.5.(c) and (d) of the Scheme}. Consequently, the remaining
redemption liability of the Company is as under: -
14. The Company had issued and allotted 5,759,260 and 555,555 1 %
Cumulative Fully Convertible Preference Shares (FCPS) of Rs.10/- each
to Fineline Holdings Limited and UDT Enterprises Pty Ltd. respectively
for cash at an issue price of Rs.540/- each, aggregating to an amount
of Rs.34,100 lakhs (FCPS) on preferential allotment basis to facilitate
the trifurcation of the Company as envisaged in the Scheme and proceeds
thereof had been allocated, for the proposes of the utilisation, by the
Board of Directors of the Company, to itÃs undertakings pre- demerger
as per their expansion/ fnancial plans or otherwise. These FCPS are
deemed to have been allotted on October 31, 2009, being the Appointed
date under the Scheme.
Further, pursuant to the Scheme, 27780 FCPS each were allocated to
Transferee Company-I and Transferee Company-II, and the balance
6,259,255 FCPS remain outstanding with the Company, which are liable to
be converted in one or more tranches, into equity shares of Rs.10/-
each during the period commencing November 07, 2010 and ending April
30, 2011, as may be decided by the respective subscriber. In the event
any subscriber does not exercise the option to convert the FCPS within
the aforesaid period, the FCPS held by such subscriber shall
compulsorily get converted into equity shares on April 30, 2011.
Conversion shall be made at a price computed in accordance with
provisions relating to Preferential Allotment under SEBI (Issue of
Capital & Disclosure Requirements) Regulations, 2009.
15. Pursuant to the provisions of Micro, Small and Medium Enterprises
Development Act, 2006, the Company had sent letters to its suppliers
for confrmations of their registration under the said Act, and on the
basis of replies received from them, the disclosure is given below: -
16. The name of the Company has been changed from Asian Hotels Limited
to Asian Hotels (North) Limited w.e.f 16th February 2010.
17. The Company vide Notifcation No. 2034E dated 12.08.2008 issued by
the Delhi Development Authority has been granted an additional FSI of
approx. 15000 square meters. The Company is in the process of utilizing
the aforesaid additional FSI for expansion of the existing facilities
at Hyatt Regency Delhi and build a new tower, comprising of serviced
apartments and commercial space.
18. The current accounting period is for six months from 1st October,
2009 to 31st March, 2010, whereas, the prior accounting period is for
eighteen months from 1st April, 2008 to 30th September, 2009. As
referred to in note no. 15 above, prior period fgures also include
those for the two demerged undertakings whereas current period fgures
include those demerged undertakings only for one month. Hence, the
fgures for prior period are not comparable with those of the current
period.
19. Prior period fgures have been regrouped and rearranged wherever
necessary.
Schedules 1 to 21 form an integral part of the Balance Sheet as at 31st
March, 2010 and Proft & Loss Account for the six month period ended on
that date.
Sep 30, 2009
1. Cash and Cash Equivalents
Cash and cash equivalents in the cash flow comprise of cash at bank and
cash/cheques in hand and short term deposits with banks less short term
advances from banks.
2. Dividend
Dividend proposed on equity shares, if any, is accounted for pending
approval at the Annual General Meeting.
3. Contingent Liabilities: Prior Year
Rs. in lakhs Rs. in lakhs
(a) Outstanding Capital
Expenditure Commitments 718.10 1577.29
(b) Claims against the Company
not acknowledged as debts 617.18 653.01
(c) Demand for income tax (exclusive
of interest amounting to Rs.NIL
Prior Year Rs 109.59 Lakhs) not
provided for pending appeals - 113.25
4. The Company, based on the report by a Certified Valuer, had
revalued land and building of Hotel Hyatt Regency Delhi by adopting
Cost of Contractors method, on 28th February 2007 at Rs. 85,700.00
Lakhs, the same resulted in an increase in the value of land and
building of an amount of Rs. 82,131.81 Lakhs, and therefore an
equivalent amount had been credited to the Revaluation Reserve Account.
Due to increase in the value of assets, there was an additional charge
of Rs. 80.87 Lakhs (Prior year Rs.53.91 Lakhs), for the current period,
on account of depreciation. Resultantly, an equivalent amount of Rs
80.87 Lakhs (Prior year Rs.53.91 Lakhs) has been withdrawn from the
Revaluation Reserve Account and credited to the Profit & Loss Account.
5. At the beginning of the current period, the Company held 75000
equity shares of Rs.10/- each of Regency Convention Centre and Hotels
Ltd (RCC), representing 48.28% of paid up equity capital of RCC,
acquired for a consideration of Rs. 173.02 Lakhs. During the current
period, the Company acquired a further 16652 equity shares of RCC for a
consideration amounting to Rs.2400 Lakhs, by virtue of which the
aggregate share holding of the Company in RCC stood at 58.99% of the
paid up capital of RCC, thus making it a subsidiary of the Company.
Apart from the above, the Company, during the prior years, had also
made an advance of Rs. 334 Lakhs for acquiring further shares of RCC
from their existing shareholders and incurred expenditure on behalf of
RCC amounting to Rs. 55.82 Lakhs upto the balance sheet date.
The principal assets of RCC comprises of an interest in a parcel of
land at Mumbai, the right in such interest is being contested in the
Bombay High Court. However, the Company has been legally advised that
it has a fair chance of success. An independet broker has also made an
indicative offer to the Company for its interest in RCC at a value
which is higher than the book value being reflected in the books of the
Company. In the proposed Scheme of Arrangement and Demerger of the
Company (Refer Note 18 below) the aforesaid assets forms part of
Kolkata undertaking at their book value. Considering that the value of
the asset is contingent upon the outcome of legal proceedings, as
suggested supra, in the light of present uncertainty about the outcome
of the matter, and, therefore, whether there is impairment, if any, the
value of the aforesaid assets can not be reasonably determined at
present.
In view of the above, no provision for impairment in respect of said
assets has been made in these financial statements.
6. The Company has not recognised any loss on impairment in respect
of assets of the Company as is required in terms of Accounting Standard
(AS) 28 on "Impairment of Assets" since in the opinion of the
Management, as confirmed by the Audit Committee, the reduction in value
of any asset, to the extent required, has already been provided for in
the books. In respect of subsidiaries such decision is based on the
management accounts/ audited accounts of the subsidiaries, as available
and as examined by the Audit Committee on the basis of the information
and explanations available.
7. Presently, the Company is operating an integrated hotel business
at three geographical locations. These hotels namely Hyatt Regency
Delhi, Hyatt Regency Kolkata and Hyatt Regency Mumbai are governed by
the same set of risks and returns and hence have been considered as
representing a Single Segment.
A Scheme of Arrangement and Demerger (the Scheme) was approved by the
Board of Directors of the Company on 14th May, 2007. The Scheme
envisaged the trifurcation of the Company in the following manner:-
i) Kolkata Undertaking as defined in clause 1.2.1 of the Scheme,
comprising interalia of Hotel Hyatt Regency Kolkata and investments in
the shares held in GJS Hotels Limited and Regency Convention Centre and
Hotels Limited, and appropriate cash liquidity.
ii) Mumbai Undertaking as defined in clause 1.2.1 of the Scheme,
comprising interalia of Hotel Hyatt Regency Mumbai, investments in the
shares held in Aria Hotels & Consultancy Services Private Limited and
deposits/advances paid towards acquisition of immovable property in
Bangalore.
iii) AHL Residual as would emerge immediately after the transfer of and
vesting in of Mumbai Undertaking and the Kolkata Undertaking in
Chillwinds Hotels Limited (Transferee Company -I) and Vardhman Hotels
Limited (Transferee Company-ll) respectively.
The Scheme, which was approved by the High Court of Delhi vide its
order dated 29th February, 2008 and amended vide Orders dated 9th
April, 2009 and 18th August, 2009, was filed with the Registrar of
Companies, NCT of Delhi & Haryana, but could not take effect as certain
conditions precedent were yet to be fulfilled. In order to overcome the
impediments in implementation of the Scheme and to determine a fixed
date which should be the Appointed Date for the purpose of drawing up
the undertaking wise balance sheets in terms of the Scheme, the Company
made an application to the Honble Court in May 2009, introducing the
Appointed Date and incorporated certain clauses to define how the
business of the three undertakings would be conducted between the
Appointed Date and the Effective Date. The Honble High Court vide
its order dated 29th May, 2009, stayed the effect and implementation of
the Scheme, as approved earlier and directed the Company to obtain the
approval of its equity shareholders for the amended Scheme. The Company
made additional applications in August 2009 and November 2009, for
further amendments, before the equity shareholders meeting could be
convened in terms of Order dated 29th May, 2009, and the Honble Court
vide its Order dated 10th November, 2009, directed the Company to
convene a meeting of its equity shareholders on 11th December, 2009, to
obtain their approval for the amended Scheme. Pursuant to the
directions of the Honble Court, the Company has called its equity
shareholders meeting on 11th December, 2009. Once the amended Scheme is
approved by the equity shareholders and sanctioned by the Honble
Court, the amended Scheme is expected to be implemented by the end of
January 2010 having retrospective effect from the Appointed Date i.e.
31 st October, 2009. Subsequent thereto, the Promoter Groups intend
to transfer their shareholding inter-se in the three demerged entities
as provided in Clause 5.8 of the Scheme.
In view of the above, within the meaning of Accounting Standard (AS) 24
on "Discontinuing Operations", the operations of Kolkata undertaking
and Mumbai undertaking constitute discontinuing operations. As at 30th
September, 2009, the carrying amount of the assets of the Kolkata
undertaking were Rs 40112.29 Lakhs (prior year Rs 38731.48 Lakhs), and
of the Mumbai undertaking were Rs 39429.73 Lakhs (prior year Rs
42005.98 Lakhs) and their liabilities were Rs 22028.95 Lakhs (prior
year Rs 21094.39 Lakhs) and Rs 29111.48 Lakhs (prior year Rs 30353.95
Lakhs) respectively.
The following statement shows the revenue and expenditure of continuing
and discontinuing operations of the Company.
8. Letters for confirmation of balances sent to parties have been
received back only in a few cases and discrepancies, if any, pointed
out by the parties are being investigated for necessary adjustments to
be carried out.
9. Out of the Service Tax demand raised and paid during the prior year
for Rs.146.11 Lakhs, Rs. 95.94 Lakhs had been paid under protest. In
the opinion of the Company, amount paid under protest is not liable to
be paid and hence has been included under "Loans & Advances" as "Claims
Recoverable" vide application dated May 9, 2008. The Company has also
received notices with regard to Service Tax demand on certain services
aggregating to Rs.482.54 Lakhs considered not tenable in the opinion of
the Company. These are thus included under "Contingent Liabilities" as
"Claims against the Company not acknowledged as debts" and no provision
has been made against the same.
10. The Company is presently operating an integrated hotel business at
three geographical locations. The operations of these hotels namely
Hyatt Regency Delhi, Hyatt Regency Kolkata and Hyatt Regency Mumbai are
governed by the same set of risks and returns and hence have been
considered as representing a Single Segment. The said treatment is in
accordance with the guiding principles enunciated in the Accounting
Standard (AS)- 17 on Segment Reporting. The Company, during the prior
year, had altered its object clause of memorandum of association and
entered into a different business segment, viz., power generation,
governed by different risks and returns. However, it is not a
reportable segment as defined under the said Accounting Standard, and
therefore, no separate disclosures have been made. The assets,
liabilities and revenues relating to the said business have however,
been disclosed in the accounts separately.
11. Municipal Corporation of Delhi introduced a new method for payment
of property tax under Unit Area Scheme w.e.f. 1st April, 2004. The
Federation of Hotels and Restaurants Association of India (FHRAI) and
the Company filed a writ petition in the High Court of Delhi against
the said new method, which is still pending. However, in terms of the
interim order dated 10th September, 2004 passed by the Honble High
Court, the Company has been paying a sum of Rs. 54.52 Lakhs per annum
based on the Ratable Value method then existing. However, as a matter
of abundant caution, and based on the legal opinion obtained by the
Company, the Company has provided for the difference in property tax as
per Unit Area Scheme and the payments made since introduction of the
said new method, alongwith interest thereon. Such calculations are
based on usage factor of 10.
12. The Company has classified the various benefits provided to
employees as under: -
(a) Defined contribution plans
i) Provident fund
During the period, the Company has recognized the following amounts in
the profit and loss account: Employers contribution to provident fund
Rs. 527.52 Lakhs (prior year Rs. 272.33 Lakhs)
(b) Defined benefit plans
a) Contribution to Gratuity funds
b) Compensated absences - Earned leave
In accordance with Accounting Standard 15 (revised 2005), actuarial
valuation was done in respect of the aforesaid defined benefit
plans based on the following assumptions- Economic Assumptions
The discount rate and salary increases assumed are the key financial
assumptions and should be considered together; it is the difference or
gap between these rates which is more important than the individual
rates in isolation. Discount Rate
The discounting rate is based on the gross redemption yield on medium
to long term risk free investments. The estimated term of the benefit
obligations works out to 0 years. For the current valuation a discount
rate of 8 % pa. compound, has been used in consultation with the
employer.
13. Related Party Disclosures
a) Parties which significantly influence the Company (either
individually or with others) (i) Yans Enterprises (H.K.) Ltd.
(ii) DSO Ltd.
(iii) Saraf Industries Ltd.
b) Parties which are significantly influenced by the Company (either
individually or with others)
(i) GJS Hotels Limited - a subsidiary company
(ii) Aria Hotels & Consultancy Services Private Limited - a subsidiary
company
(iii) Chillwinds Hotels Limited - a subsidiary company
(iv) Vardhman Hotels Limited - a subsidiary company
(v) Regency Convention Centre & Hotels Ltd - a subsidiary company (an
erstwhile associate company in the prior year)
d) Related Parties
Subsidiary
GJS Hotels Limited
Aria Hotels & Consultancy Services Private Limited
Chillwinds Hotels Limited
Vardhman Hotels Limited
Regency Convention Centre & Hotels Limited
(an erstwhile associate company in the prior year)
- Key Management Personnel
Mr. Sushil Gupta Managing Director (West)
Mr. Shiv Jatia Managing Director (North)
Mr. Umesh Saraf Managing Director (East)
- Relatives of Key Management Personnel
Mr. Sandeep Gupta Son of Mr. Sushil Gupta
Mr. R.G. Saraf Uncle of Mr. Umesh Saraf
- Entities controlled by Directors or their relatives
Bell Ceramics Limited
M/s Bhasin & Co
Choice Hospitality (India) Limited
Energy Infrastructure (I) Limited
Godfrey Philips Limited
Juniper Hotels Private Limited
Magus Estates & Hotels Limited Nepal Travel Agency Private Limited Ram
Pyari Devi Charitable Trust WEL Intertrade Limited Eden Park Hotels
Private Limited
14. Subsequent to 30th September, 2009, the Company has received Rs.
3000 lakhs on October 14, 2009 and Rs.31100 Lakhs on October 16,2009 as
subscription money against the Fully Convertible Preference Shares
(FCPS) which are to be issued pursuant to the Scheme.
The Object of the aforesaid proposed issue on preferential allotment
basis is to facilitate the trifurcation of the Company as envisaged in
the Scheme. The above proceeds may be allocated, for the purposes of
the utilisation, by the Board of Directors of the Company, to their
undertakings as per their expansion/ financial plans or otherwise.
The FCPS shall be convertible, in one or more tranches, into equity
shares of face value of Rs.10/- each of the respective companies, i.e.
AHL Residual Company, Transferee Company-I or Transferee Company-ll, as
the case may be, based on allocation of FCPS in terms of the Scheme.
15. During the period, Term Loans taken by Aria Hotels and Consultancy
Services Private Limited, a subsidiary company, from a financial
institution and bank are secured by way of:-
(a) Mortgage by way of second pari passu charge created by the Company
on its immovable property situated at Mumbai namely Hotel Hyatt Regency
Mumbai.
(b) First pari passu charge created by the Company on credit card
receivables of Hotel Hyatt Regency Mumbai.
(c) Pledge of Investment of the Company in Aria Hotels and Consultancy
Services Private Limited, a subsidiary company.
(d) Personal Guarantees of the two of the directors of the Company.
16. The Company had obtained approval of the Registrar of Companies,
NCT of Delhi & Haryana under Section 210 of the Companies Act, 1956,
for extension of accounting year 2008-09. Accordingly, the current
accounting period is for eighteen months from 1 st April, 2008 to 30th
September, 2009 and hence the prior year figures are not comparable.
17. Prior year figures have been regrouped and rearranged wherever
necessary.
Schedules 1 to 21 form an integral part of the Balance Sheet as at 30th
September, 2009 and Profit & Loss Account for the eighteen months
period ended on that date.
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