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Notes to Accounts of EIH Associated Hotels Ltd.

Mar 31, 2022

2 RECENT ACCOUNTING PRONOUNCEMENTS

Ministry of Corporate Affairs (“MCA”) through Companies (Indian Accounting Standards) Amendment Rules, 2020 notifies new standard or amendments to the standards. On March 23, 2022, MCA amended the Companies (Indian Accounting Standards) Amendment Rules, 2022, as below.

Ind AS 16 - Property Plant and equipment

The amendment clarifies that excess of net sale proceeds of items produced over the cost of testing, if any, shall not be recognised in the profit or loss but deducted from the directly attributable costs considered as part of cost of an item of property, plant, and equipment. This amendment comes into effect from April 1, 2022.

The Company does not expect the amendment to have any significant impact in its recognition of its property, plant and equipment in its financial statements.

Ind AS 37 - Provisions, Contingent Liabilities and Contingent Assets

The amendment specifies that the ‘cost of fulfilling’ a contract comprises the ‘costs that relate directly to the contract’. Costs that relate directly to a contract can either be incremental costs of fulfilling that contract (examples would be direct labour, materials) or an allocation of other costs that relate directly to fulfilling contracts (an example would be the allocation of the depreciation charge for an item of property, plant and equipment used in fulfilling the contract). This amendment comes into effect from April 1, 2022.

The amendment is essentially a clarification and the Company does not expect the amendment to have any significant impact in its financial statements.

Ind AS 109 - Financial Instruments

The amendment specifies that for the purpose of paragraph 3.3.2 of IndAS 109, the terms shall be considered to be substantially different if the discounted present value of the cash flows under the new terms of a debt instrument, including any fees paid net of any fees received and discounted using the original effective interest rate, is at least 10 per cent different from the discounted present value of the remaining cash flows of the original financial liability. In determining those fees paid net of fees received, a borrower includes only fees paid or received between the borrower and the lender, including fees paid or received by either the borrower or lender on the other‘s behalf.

This amendment comes into effect from April 1, 2022. The amendment is essentially a clarification and the Company does not expect the amendment to have any significant impact in its financial statements.


3 Significant estimates and judgements

The preparation of financial statements requires the use of accounting estimates which, by definition, will seldom equal the actual results. Management also needs to exercise judgement in applying the Company’s accounting policies.

This note provides information about the areas involving a higher degree of judgement or complexity, and of items which are more likely to be materially adjusted due to estimates and assumptions turning out to be different than those originally assessed.

Estimates and judgements are continually evaluated. They are based on historical experience and other factors, including expectations of future events that may have a financial impact on the Company and that are believed to be reasonable under the circumstances.

Detailed information about each of these estimates or judgements is included in relevant notes together with information about the basis of calculation for each impacted line item in the financial statements.

A. Significant estimates:

Useful life of the hotel buildings [refer note 1 (n) and note 4]

The Company has adopted useful life of property, plant and equipment as stipulated by Schedule II to the Companies Act, 2013 except for the hotel buildings for computing depreciation. In the case of the hotel building of the Company, due to superior structural condition, management decided to assess the balance useful life by independent technical expert. As per the certificates of the technical expert as on March 31, 2022, the balance useful life of the hotel buildings ranges between 10 to 53 years and the total useful life of the buildings are higher than those specified by Schedule II to the Companies Act, 2013. The carrying amount of the hotel building is being depreciated over its residual life. Based on management evaluation performed at each reporting period, there has been no change in the earlier assessed useful life.

B. SIGNIFICANT JUDGEMENTS:Contingent liabilities [refer note 1 (r) and note 44 (a)]

The Company has ongoing litigations with various regulatory authorities and third parties with respect to tax/legal matters. Contingent liabilities are possible obligations whose existence will be confirmed only on the occurrence or non-occurrence of uncertain future events outside the Company’s control, or present obligations that are not recognised because it is not probable that a settlement will be required or the value of such a payment cannot be reliably estimated. These are subjective in nature and involve judgement in determining the likely outcome of such tax/legal matters. The Company has disclosed these as contingent liability. Refer to Note 44(a) on Contingent liabilities.

Inventories are valued at cost which is based on ‘Cumulative weighted average method’ or net realisable value, whichever is lower.

The cost of inventories recognised as an expense during the year as consumption of provisions, wines and others was INR 161.66 million (for the year ended March 31, 2021 : INR 102.69 million million).

Inventories with a carrying amount of INR 114.71 million (2021 - 103.29 million) have been pledged as security for cash credit facility from HDFC Bank

Nature and purpose of Reserves

(i) Capital redemption reserve

Capital redemption reserve represents the statutory reserve created by the Company for the redemption of its preference share capital. The same can be utilised by the Company for issuing fully paid bonus shares.

(ii) Securities premium

This reserve represents the premium on issue of shares and can be utilised in accordance with the provisions of the Companies Act, 2013.

(iii) Capital reserve

The Capital reserve includes government grant received in the nature of subsidy, where no repayment is ordinarily expected in respect thereof and on amalgamation where the net value of the assets acquired exceeded the purchase consideration.

(iv) General reserve

General reserve represents profits transferred from retained earnings from time to time to general reserve for appropriate purposes based on the provisions of the erstwhile Companies Act, 1956. Consequent to introduction of the Companies Act 2013, the requirement to mandatorily transfer a specified percentage of the net profit to general reserve has been withdrawn. It can be utilised in accordance with the provisions of the Companies Act, 2013.

(v) Retained earnings - Surplus

Retained earnings represents accumulated profits of the Company. It can be utilised in accordance with the provisions of the Companies Act, 2013.

The Company recognised an impairment loss in respect of certain property, plant and equipment and right-of-use assets amounting to INR 4.32 million (Previous Year - INR 39.27 million) on account of continuing losses in respect of the Company’s hotel Trident Cochin. “Exceptional items” recognised in the Statement of Profit and Loss represents this impairment loss. The recoverable amount of the aforementioned hotel was determined by the Company’s management based on fair value less costs to sell. Fair value was determined by an independent valuer based on market prices of these assets by reference to an active market. The recoverable amount has been calculated as per the provisions of Ind AS 36, Impairment of Assets.

Considering that the Company’s turnover was lower than INR 4,000 million in the financial year 2017-18, the Company recognised a provision for income tax for the year ended March 31, 2020 and re-measured its deferred tax liabilities as at March 31, 2020 and onwards at the reduced rate of 25% plus applicable surcharge and health and education cess thereon as enacted in the Union Budget 2019 which was presented on July 5, 2019.

(ii) Fair value hierarchy

This section explains the judgements and estimates made in determining the fair values of the financial instruments that are (a) recognised and measured at fair value and (b) measured at amortised cost and for which fair values are disclosed in the financial statements. To provide an indication about the reliability of the inputs used in determining fair value, the Company has classified its financial instruments into the three levels prescribed under the accounting standard.

Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices. This includes listed financial instruments that have quoted price. The fair value of all financial instruments which are traded in the stock exchanges is valued using the closing price as at the reporting period. Fair value of mutual funds is determined based on the closing NAV.

Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. This is the case for unlisted equity securities, security deposits included in level 3.

(iii) Assets and liabilities which are measured at amortised cost for which fair values are disclosed

All the financial assets and financial liabilities measured at amortised cost, carrying value is an approximation of their respective fair value.

(iv) Valuation technique used to determine fair value

Specific valuation techniques used to value financial instruments include:

• Investment in Green Infra Wind Generation Limited has been made pursuant to the contract for procuring electricity supply at the hotel unit.

Investment in the said company is not usually traded in market. Considering the terms of the contract and best information available in the market, cost of investment is considered as fair value of the investments

Significant estimates

The fair value of financial instruments that are not traded in an active market is determined using valuation techniques. The Company uses its judgement to select a variety of methods and make assumptions that are mainly based on market conditions existing at the end of each reporting period.

40 FINANCIAL RISK MANAGEMENT

The Company’s activities expose it to market risk (including currency risk, interest rate risk and other price risk), liquidity risk and credit risk.

This note explains the sources of risk which the entity is exposed to and how the entity manages the risk :

The Company’s risk management is carried out by a treasury department under policies approved by the Board of Directors. The Company treasury identifies, evaluates and hedges financial risks in close co-operation with the Company’s operating units. The Board of Directors provide principles for overall risk management, as well as policies covering specific areas, such as foreign exchange risk, interest rate risk, credit risk, use of non-derivative financial instruments and investment of excess liquidity.

(A) Market risk

(i) Foreign currency risk

Foreign currency risk arises from future commercial transactions and recognised assets or liabilities denominated in a currency that are not the Company’s functional currency (INR).

(iii) Price risk

The Company’s exposure to equity securities price risk arises from investments held by the Company in listed securities and classified in the balance sheet as at fair value through profit or loss (refer note 8- Investments). However, at the reporting date the Company does not hold material value of quoted securities. Accordingly, the Company is not exposed to significant market price risk.

(B) Credit risk

Credit risk arises when a counter party defaults on contractual obligations resulting in financial loss to the Company.

Trade receivables consist of large number of customers, spread across diverse industries and geographical areas. In order to mitigate the risk of financial loss from defaulters, the Company has an ongoing credit evaluation process in respect of customers who are allowed credit period. In respect of walk-in customers the Company does not allow any credit period and therefore, is not exposed to any credit risk.

The Company does not have any derivative transaction and therefore is not exposed to any credit risk on account of derivatives. The Company does not have any long-term contracts for which there were any material foreseeable losses.

(C) Liquidity risk

The Company has a liquidity risk management framework for managing its short term, medium term and long term sources of funding vis-a-vis short term and long term utilisation requirement. This is monitored through a rolling forecast showing the expected net cash flow, likely availability of cash and cash equivalents, and available undrawn borrowing facilities.

The cash credit facility from HDFC Bank Limited (together with interest) is secured by way of hypothecation of stock and book debts of the entire Company and hypothecation of entire movable plant and equipment including all spare parts and other movable property, plant and equipment both present and future pertaining to Trident, Chennai and by way of mortgage of the said property.

The bank cash credit facilities and WCDL facility may be drawn at any time and may be terminated by the bank without notice.

(ii) Maturities of financial liabilities

The tables below analyses the Company’s financial liabilities into relevant maturity groupings based on their contractual maturities for all non-derivative financial liabilities.

The amounts disclosed in the table are the contractual undiscounted cash flows.

41 CAPITAL MANAGEMENT Risk management

The Company’s objectives when managing capital are to

• safeguard its ability to continue as a going concern, so that it can continue to provide returns for shareholders and benefits for other stakeholders, and

• maintain an optimal capital structure to reduce the cost of capital.

The Company manages the share capital issued and subscribed alongwith shareholder’s fund appearing in the financial statements as capital of the Company. Under the terms of the major borrowing facilities, the Company is required to comply with certain financial covenants. The Company has complied with these covenants throughout the reporting period.

42

(i) Defined benefit plans a) Gratuity

The Company provides for gratuity for employees in India as per the Payment of Gratuity Act, 1972. Employees who are in continuous service for a period of 5 years are eligible for gratuity. The amount of gratuity payable on retirement/termination is the employees last drawn basic salary per month computed proportionately for 15 days salary multiplied for the number of years of service. The gratuity plan is a funded plan and the Company makes contributions to Life Insurance Corporation of India funds. Provision/write back, if any, is made on the

basis of the present value of the liability as at the Balance Sheet date determined by actuarial valuation following Projected Unit Credit Method.

b) Leave encashment

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

(ii) Defined contribution plans

The Company has certain defined contribution plans. Contributions are made to provident fund in India for employees at the rate of 12% of basic salary as per applicable regulations. The contributions are made to registered provident fund administered by the government. The obligation of the Company is limited to the amount contributed and it has no further contractual nor any constructive obligation. The expense recognised during the year towards contribution plans is INR 19.01 million (March 2021 - INR 19.71 million)

The above sensitivity analysis are based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method is used for calculating the defined benefit liability recognised in the Balance Sheet.

Sensitivies due to change in demographic and investment assumptions are not material and hence the impact of change due to these is not disclosed.

The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the prior period.

(vi) The major categories of plan assets are as follows:

The Company pays contribution to LIC which in turns invests the amount in various investments. As investment is done by the LIC of India in totality basis along with contributions from other participants, hence the Company wise investment in planned assets-category/classwise is not available.

(vii) Risk exposure

The defined benefit obligations have the under-mentioned risk exposures:

Interest rate risk: The defined benefit obligation is calculated using discount rate based on government bonds. If bond yields fall, the defined benefit obligation will likely to increase.

Salary Inflation risk: Higher than expected increases in salary will increase the defined benefit obligation.

Demographic risk: This is the risk of variability of results due to unsystematic nature of decrements that include mortality, withdrawal, disability and retirement. The effect of these decrements on the defined benefit obligation depends upon the combination of salary increase, discount rate and vesting criteria.

(viii) Defined benefit liability and employer contributions

Expected contributions to post employment benefit plan for the year ending March 31, 2022 is INR 1.12 million.

The weighted average duration of defined benefit obligation in case of Gratuity is 6 years (2021-6 years) and in case of Leave obligation 6 years ( 2021-6 years)

* Includes demand of INR 9.84 million received during the year from the Deputy Commissioner (Appeals) with respect to luxury tax for the period 2014-15 to 2017-18 which amount had been paid under protest. The Company intends to file an appeal with the appropriate authorities within the stipulated time.

Note:

The matters listed above are in the nature of statutory dues, namely, property tax, value added tax, income tax, service tax, luxury tax and other claims, all of which are under litigation, the outcome of which would depend on the merits of facts and law at an uncertain future date. The amounts shown in the items above represent the best possible estimates arrived at, are on the basis of currently available information. The Company engages reputed professional advisors to protect its interest, and cases that are disputed by the Company are those where the management has been advised that it has strong legal positions. Hence, the outcomes of these matters are not envisaged to have any material adverse impact on the Company’s financial position.

(b) Pending litigation

In respect of an order passed by the Revenue Minister of the State of Rajasthan and a subsequent order passed by the District Collector, Jaipur in earlier years unilaterally withdrawing the lease deed related to Trident Hotel, Jaipur, the Company had filed a Civil writ petition and a civil miscellaneous appeal (“Appeal”) before the Rajasthan High Court at Jaipur. The Hon’ble High Court had granted an interim order of status quo in favour of the Company with respect to the order of the District Collector and had appointed an arbitrator to decide inter-alia the validity of the order of the District Collector. The arbitrator had passed the arbitral award in favour of the Company and had set aside the order of the District Collector whereby the lease was withdrawn.

During the year, the Company withdrew the appeal pending before the Rajasthan High Court and subsequently, an application has been filed by the District Collector, Jaipur for setting aside the arbitral award. The Civil Writ Petition filed in respect of the order of the Revenue Minister is currently under adjudication before the Rajasthan High Court.

Further, a settlement agreement had been entered into in respect of the ongoing disputes amongst the Company and other parties (collectively referred to as “parties”), with respect to the lease deed of the land related to Trident Hotel, Jaipur. Based on the settlement agreement the parties have withdrawn/ settled all pending cases except for one case filed by the Company which is currently under adjudication before the Rajasthan High Court. Based on the legal opinion obtained by the Company, and in view of the present status of the case, the management believes that the Company has strong chances of success in the above-mentioned case and the outcome of this matter is not envisaged to have any material adverse impact on the Company’s financial position. As on March 31, 2022, buildings included in property, plant and equipment amounted to INR 128.84 million and right-of-use assets in respect of land amounted to INR 72.87 million relating to the Trident Jaipur hotel.

Based on the settlement agreement amongst the Company, Chandani Properties Private Limited and other parties (collectively referred to as “parties”) with respect to the land/lease deed of the Trident Jaipur hotel, the parties have withdrawn/ settled all pending cases except for one case filed by the Company which is currently under adjudication before the Rajasthan High Court.

50 DISCLOSURE ON CONTRACT BALANCES a) Trade receivables

A trade receivable is recorded when the Company has an unconditional right to receive payment. In respect of revenue from rooms, food and beverages and other services invoice is typically issued as the related performance obligations are satisfied as described in note 1(b) - Significant accounting policies (Revenue recognition) (refer note 14-Trade receivables).

51 The previous year’s figures have been regrouped, rearranged and reclassified wherever necessary. Amounts and other disclosures for the preceding year are included as an integral part of the current year financial statements and are to be read in relation to the financial statements and other disclosures relating to the current year.

52 There has been no delay in transferring amounts, required to be transferred to the Investor Education and Protection Fund by the Company.

53 The Code on Social Security, 2020 (‘Code’) relating to employee benefits during employment and post-employment received Presidential assent on September 28, 2020. The Code has been published in the Gazette of India and subsequently on November 13, 2020 draft rules were published and invited for stakeholders suggestions. However, the date on which the Code will come into effect has not been notified. The Company will assess the impact of the Code when it comes into effect and will record any related impact in the period the Code and rules thereunder become effective.

56 IMPACT OF COVID-19 ON BUSINESS OPERATIONS

The second wave of COVID-19 has had severe impact on human lives and the economy across various states in India in April and May 2021. Different states in India imposed curfew restrictions in phases throughout April and May, 2021, with gradual easing in a phased manner effective June 2021.

The consequences of the COVID-19 outbreak on the Company’s business for the year ended 31st March, 2022 and 31st March, 2021 have been severe. Various cost rationalization measures that were initiated during financial year 2020-21 have continued through the year 2021-22. Most of the Company’s hotels remained operational throughout the period to accommodate in-house guests who preferred to stay on. With the gradual lifting of restrictions across the country, business at the Company’s hotels started picking up and has seen recovery thereafter. The adverse effects of the variant ‘Omicron’ on the Company’s business was restricted to the first few weeks of January 2022. With international flights from India resuming on 27th March, 2022, the Company’s business is expected to improve.

The Management does not foresee any stress on liquidity owing to the availability of liquid funds in the form of cash and cash equivalents, other bank balances (other than earmarked accounts) and investments in mutual funds amounting to INR 817.75 million on 31st March, 2022 and also has access to sanctioned borrowing facilities for working capital requirements worth INR 200 million which remained unutilised as on 31st March, 2022.

The Management has also assessed the potential impact of COVID-19 in preparation of the Statement of financial statements, including, but not limited to its assessment of liquidity and going concern assumption, the carrying value of property, plant and equipment, right of use assets, capital work-in-progress, intangible assets, inventories, investments, trade receivables and other current and non-current assets of the Company as on 31st March, 2022. Based on current indicators of future economic conditions, the Company expects to recover the carrying amounts as on 31st March, 2022 of these assets.

The impact of COVID-19 on the business may be different from that estimated on the date of approval of these financial statements. The management will continue to closely monitor any material changes to future economic conditions.

57 OTHER STATUTORY INFORMATION

1. Title deeds of immovable properties are in the name of the Company, other than disclosed in the note 54.

2. The Company had not granted any loans or advances in the nature of loans to promoters, directors, KMPs and the related parties (as defined under Companies Act, 2013), either severally or jointly with any other person, that are repayable on demand or without specifying any terms or period of repayment.

3. The Company was not holding any benami property and no proceedings were initiated or pending against the Company for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and rules made thereunder.

4. The Company had not been declared a wilful defaulter by any bank or financial institution or other lender (as defined under the Companies Act, 2013) or consortium thereof, in accordance with the guidelines on wilful defaulters issued by the Reserve Bank of India.

5. The Company did not have any transactions with struck off companies under section 248 of the Companies Act, 2013 or section 560 of Companies Act, 1956.

6. The Company did not have any charges or satisfaction which were yet to be registered with ROC beyond the statutory period.

7. The Company has not traded or invested in Crypto currency or Virtual Currency during year ended March 31, 2022.

8. The Company has not advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) any funds to or in any other persons or entities, including foreign entities (“Intermediaries”), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (“Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

9. The Company has not received any funds from any persons or entities, including foreign entities (“Funding Parties”), with the understanding, whether recorded in writing or otherwise, that the Company shall, 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 provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

10. The Company did not have any transaction which had not been recorded in the books of account that had been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961).

58 The financial statements were approved for issue by the Board of Directors on May 2, 2022


Mar 31, 2019

Related Party Transactions

In accordance with the requirements of Indian Accounting Standard (Ind AS) - 24 ''Related Party Disclosures'' the names of the related party where control exists/able to exercise significant influence along with the aggregate transactions and year-end balance with them in the ordinary course of business and on arms'' length basis are given below:

a) List of Related Parties

(i) Key Management Personnel of the Company

Mr. P. R.S. Oberoi - Chairman

Mr. S.S. Mukherji - Vice Chairman

Mr. Vikram Oberoi - Managing Director

Mr. L. Ganesh - Director

Mr. Akshay Raheja - Director

Mr. Anil Kumar Nehru - Director

Mr. Sudipto Sarkar - Director

Mr. Surin Shailesh Kapadia - Director

Ms. Radhika Vijay Haribhakti - Director

Mr. Samidh Das - Chief Financial Officer

Ms. Indrani Ray - Company Secretary

(ii) Enterprises in which Key Management Personnel and close member of Key Management Personnel have Joint Control or Significant influence with whom transactions have taken place during the year.

EIH Limited

Oberoi Hotels Private Limited

Oberoi Holdings Private Limited

Oberoi Plaza Private Limited

Bombay Plaza Private Limited

Mashobra Resort Limited

Mumtaz Hotels Limited

Oberoi Kerala Hotels and Resorts Limited

Mercury Car Rentals Private Limited

Mercury Travels Limited (w.e.f. 11.04.17 upto 07.08.18)

Island Resort Limted Oberoi International LLP PT Waka Oberoi Indonesia PT Widja Putra Karya

(iii) Enterprises which are post employment benefit plan for the benefit of employees.

EIH Employees Gratuity Fund

EIH Executive Superannuation Scheme

The matters listed above are in the nature of statutory dues, namely, property tax, value added tax, income tax, service tax, luxury tax and other claims, all of which are under litigation, the outcome of which would depend on the merits of facts and law at an uncertain future date. The amounts shown in the items above represent the best possible estimates arrived at, are on the basis of currently available information. The Company engages reputed professional advisors to protect its interest, and cases that are disputed by the Company are those where the management has been advised that it has strong legal positions. Hence, the outcomes of these matters are not envisaged to have any material adverse impact on the Company''s financial position.

1 Leases

(a) Company as a lessee Finance Lease

The Company acquired motor vehicles under finance lease. Generally, tenure of finance lease of vehicles varies between 3 to 5 years. After completion of the lease term, vehicles are transferred in the name of the Company.

In case of leasehold building, tenure of the lease is 21 years. The lease is renewable on mutually agreed terms on the expiry of current lease period.

Operating Lease

General description of the Company''s operating lease arrangements: i) The Company has entered into operating lease arrangements for:

a. residential premises for its employees and

b. Leasehold Land

Some of the significant terms and conditions of the arrangements are:

a. Lease agreements for employees accommodations are cancellable in nature and may generally be terminated by either party by serving a notice and agreements are generally renewable by mutual consent on mutually agreeable terms.

b. Lease agreements for leasehold lands are non-cancellable in nature and cannot be terminated during the tenure of lease and agreements are generally renewable by mutual consent on mutually agreeable terms. In some cases lease rent to be payable to the lessor are linked to/contingent to the actual revenue earned by the Company from the use of leased premises.

(b) Company as a lessor Operating Lease

General description of the Company''s operating lease arrangements:

i) The Company has entered into operating lease arrangements for shops, office space and residential premises given on operating lease to third parties. Such lease arrangements are cancellable in nature and may generally be terminated by either party by serving a notice. However, in some cases lease agreements are non-cancellable and lease rent are linked to/contingent to the actual revenue earned by the lessee from the use of leased premises.

2 Segment Reporting

The Company has identified single reportable segment, i.e, hotel, of its business. Accordingly, disclosures relating to the segmentation under Ind AS 108, "Operating Segment" is not required.

The Company does not have transactions of more than 10% of total revenue with any single external customer.

3. Disclosure on contract balances :

Trade receivables

A trade receivable is recorded when the Company has an unconditional right to receive payment. In respect of revenue from rooms, food and beverages and other services invoice is typically issued as the related performance obligations are satisfied as described in note 1(b) (Refer Note 12).

Advance from customers

Advance from Customers is recognized when payment is received before the related performance obligation is satisfied (Refer Note 26).

4 In the recent case of The Regional Provident Fund Commissioner (II) West Bengal Vs. Vivekananda Vidyamandir and Others, Supreme Court has ruled that special allowances paid by an establishment to its employees would fall within the expression "basic wages" under Section 2(b)(ii) read with Section 6 of the Act for computation of contribution towards Provident Fund.

As legally advised, the incremental liability has been ascertained prospectively, effective March 01, 2019 and provided for in the books of accounts of the Company.

5. The previous year''s figures have been regrouped, rearranged and reclassified wherever necessary. Amounts and other disclosures for the preceding year are included as an integral part of the current year financial statements and are to be read in relation to the financial statements and other disclosures relating to the current year.

6. There has been no delay in transferring amounts, required to be transferred to the Investor Education and Protection Fund by the Company.

7. The financial statements were approved for issue by Board of Directors on May 28, 2019.


Mar 31, 2018

** Details of dues to Micro Enterprises and Small Enterprises as defined under Micro, Small and Medium Enterprises Development Act, 2006 ( MSME Act) are based on information made available to the Company.

(ii) Fair value hierarchy

This section explains the judgments and estimates made in determining the fair values of the financial instruments that are (a) recognized and measured at fair value and (b) measured at amortized cost and for which fair values are disclosed in the financial statements. To provide an indication about the reliability of the inputs used in determining fair value, the Company has classified its financial instruments into the three levels prescribed under the accounting standard.

Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices. This includes listed equity instruments that have quoted price. The fair value of all equity instruments which are traded in the stock exchanges is valued using the closing price as at the reporting period. Fair value of mutual funds is determined based on the closing NAV.

Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximize the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. This

is the case for unlisted equity securities, security deposits included in level 3.

(iii) Assets and liabilities which are measured at amortized cost for which fair values are disclosed

All the financial assets and financial liabilities measured at amortized cost, carrying value is an approximation of their respective

fair value.

(iv) Valuation technique used to determine fair value

Specific valuation techniques used to value financial instruments include:

- Investment in Green Infra Wind Generation Limited has been made pursuant to the contract for procuring electricity supply at the hotel unit. Investment in said company is not usually traded in market. Considering the terms of the contract and best information available in the market, cost of investment is considered as fair value of the investments.

- Fair valuation of investment in Mercury Travels Limited had been computed as on March 31, 2017 using discounted cash flow valuation method ("DCF Method").

- Fair valuation of investment in TCP Limited has been computed as on March 31, 2018 based on the fair market value provided by TCP Limited.

(vii) Valuation processes

The fair value of unlisted equity securities had been determined on the basis of valuation done by independent valuer. The main level 3 inputs for unlisted equity securities used by the Company were derived and evaluated as follows:

As per the independent valuer, the discounted cash flow valuation method ("DCF Method") provided the most appropriate basis for valuing the equity shares of MTL. However, to reduce the bias of this single valuation methodology, value of equity shares of MTL had been also determined under the Net Asset Value method ("Net Asset Value") and, thereafter, final value of the equity shares of MTL had been determined giving appropriate weight age to the value per equity share under the foregoing DCF Method and Net Asset Value Method respectively.

The discount rates are determined using the capital asset pricing model to calculate pre-tax rate that reflects current market assessment of time value of money and the risk specific to the asset.

Significant estimates

The fair value of financial instruments that are not traded in an active market is determined using valuation techniques. The Company uses its judgment to select a variety of methods and make assumptions that are mainly based on market conditions existing at the end of each reporting period.

Financial risk management

The Company''s activities expose it to market risk (including currency risk, interest rate risk and other price risk), liquidity risk and credit risk.

This note explains the sources of risk which the entity is exposed to and how the entity manages the risk :

The Company''s risk management is carried out by a treasury department under policies approved by the Board of Directors. The Company treasury identifies, evaluates and hedges financial risks in close co-operation with the Company''s operating units. The Board of Directors provide principles for overall risk management, as well as policies covering specific areas, such as foreign exchange risk, interest rate risk, credit risk, use of non-derivative financial instruments and investment of excess liquidity.

(A) Market risk

(i) Foreign currency risk

Foreign currency risk arises from future commercial transactions and recognized assets or liabilities denominated in a currency that is not the Company''s functional currency (INR).

(iii) Price risk

The Company''s exposure to equity securities price risk arises from investments held by the Company in listed securities and classified in the balance sheet as at fair value through profit or loss (note 6). However, at the reporting date the Company does not hold material value of quoted securities. Accordingly, the Company is not exposed to significant market price risk.

(B) Credit risk

Credit risk arises when a counter party defaults on contractual obligations resulting in financial loss to the Company.

Trade receivables consist of large number of customers, spread across diverse industries and geographical areas. In order to mitigate the risk of financial loss from defaulters, the Company has an ongoing credit evaluation process in respect of customers who are allowed credit period. In respect of walk-in customers the Company does not allow any credit period and therefore, is not exposed to any credit risk.

The company does not have any derivative transaction and therefore is not exposed to any credit risk on account of derivatives.

(C) Liquidity risk

The Company has a liquidity risk management framework for managing its short term, medium term and long term sources of funding vis-a-vis short term and long term utilization requirement. This is monitored through a rolling forecast showing the expected net cash flow, likely availability of cash and cash equivalents, and available undrawn borrowing facilities.

The bank cash credit facilities and WCDL facility may be drawn at any time and may be terminated by the bank without notice.

(ii) Maturities of financial liabilities

The tables below analyse the Company''s financial liabilities into relevant maturity groupings based on their contractual maturities for all non-derivative financial liabilities.

The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within 12 months equal their carrying balances as the impact of discounting is not significant.

Capital management

(a) Risk management

The Company''s objectives when managing capital are to

- safeguard its ability to continue as a going concern, so that it can continue to provide returns for shareholders and benefits for other stakeholders, and

- maintain an optimal capital structure to reduce the cost of capital.

The Company manages the share capital issued and subscribed along with shareholder''s fund appearing in the financial statement as capital of the Company. Under the terms of the major borrowing facilities, the Company is required to comply with certain financial covenants. The Company has complied with these covenants throughout the reporting period.

Related Party disclosures

In accordance with the requirements of Indian Accounting Standard (Ind AS) - 24 ''Related Party Disclosures'' the names of the related party where control exists/able to exercise significant influence along with the aggregate transactions and year-end balance with them in the ordinary course of business and on arms'' length basis are given below:

a) List of Related Parties

(i) Key Management Personnel of the Company

Mr. P. R.S. Oberoi - Chairman Mr. S.S. Mukherji - Vice Chairman Mr. Vikram Oberoi - Managing Director Mr. L. Ganesh - Director Mr. Akshay Raheja - Director Mr. Anil Kumar Nehru - Director Mr. Sudipto Sarkar - Director Mr. Surin Shailesh Kapadia - Director Ms. Radhika Vijay Haribhakti - Director Mr. Samidh Das - Chief Financial Officer Ms. Indrani Ray - Company Secretary

(ii) Enterprises in which Key Management Personnel and close member of Key Management Personnel have Joint Control or Significant influence with whom transactions have taken place during the year.

EIH Limited

Oberoi Hotels Private Limited

Oberoi Holdings Private Limited

Oberoi Plaza Private Limited

Bombay Plaza Private Limited

Mashobra Resort Limited

Mumtaz Hotels Limited

Oberoi Kerala Hotels and Resorts Limited

Mercury Car Rentals Private Limited

Mercury Travels Limited ( w.e.f April 11, 2017)

Island Resorts Limted

(iii) Enterprises which are post employment benefit plan for the benefit of employees.

EIH Employees Gratuity Fund

EIH Executive Superannuation Scheme

(b) Recognition of Revenue (Customer Loyalty Programs)

The Company is running certain Customer Loyalty Programs for which revenue is being deferred on the basis of total loyalty points / complimentary nights outstanding. As required by Ind AS 18, while calculating fair value of the loyalty points/ complimentary nights, expected lapses are also considered by the Company (Reward points/complimentary nights, which will not be redeemed by the customers). On the basis of past trend, a significant portion of the complimentary nights/loyalty points has been estimated to be lapsed. Estimated lapse ratio is periodically evaluated by the Company and in case there is any change in the trend, the deferred revenue is adjusted accordingly. The fair value of complimentary nights/loyalty points is calculated on the basis of relative benefit passed on to the customers.

1 Leases

(a) Company as a lessee Finance Lease

The Company acquired motor vehicles under finance lease. Generally, tenure of finance lease of vehicles varies between 3 to 5 years. After completion of the lease term, vehicles are transferred in the name of the Company.

In case of leasehold building, tenure of the lease is 21 years. The lease is renewable on mutually agreed terms on the expiry of current lease period.

Operating Lease

General description of the Company''s operating lease arrangements: i) The Company has entered into operating lease arrangements for:

a. residential premises for its employees and

b. Leasehold Land

Some of the significant terms and conditions of the arrangements are:

a. Lease agreements for employees accommodations are cancellable in nature and may generally be terminated by either party by serving a notice and agreements are generally renewable by mutual consent on mutually agreeable terms.

b. Lease agreements for leasehold lands are non-cancellable in nature and cannot be terminated during the tenure of lease and agreements are generally renewable by mutual consent on mutually agreeable terms. In some cases lease rent to be payable to the less or are linked to/contingent to the actual revenue earned by the Company from the use of leased premises.

Operating Lease

General description of the Company''s operating lease arrangements:

i) The Company has entered into operating lease arrangements for shops, office space and residential premises given on operating lease to third parties. Such lease arrangements are cancellable in nature and may generally be terminated by either party by serving a notice. However, in some cases lease agreements are non-cancellable and lease rent are linked to/contingent to the actual revenue earned by the lessee from the use of leased premises.

2 Segment Reporting

The Company has identified single reportable segment, i.e , hotel, of its business. Accordingly, disclosures relating to the segmentation under Ind AS 108, "Operating Segment" is not required.

The Company does not have transactions of more than 10% of total revenue with any single external customer.

3 The previous year''s figures have been regrouped, rearranged and reclassified wherever necessary. Amounts and other disclosures for the preceding year are included as an integral part of the current year financial statements and are to be read in relation to the financial statements and other disclosures relating to the current year.

4 There has been no delay in transferring amounts, required to be transferred to the Investor Education and Protection Fund by the Company.

5 Amounts for the year ended and as at March 31, 2017 were audited by previous auditor - M/s Ray & Ray, Chartered Accountants.

6 The financial statements were approved for issue by Board of Directors on May 28, 2018


Mar 31, 2017

1. GENERAL INFORMATION

EIH Associated Hotels Limited is a Company limited by shares, incorporated and domiciled in India having its Registered Office at 1/24 GST Road, Chennai - 600 027. The Company is primarily engaged in owning premium luxury hotels under the luxury ‘Oberoi’ and five-star ‘Trident’ brands.

2. NEW STANDARDS/AMENDMENTS THAT ARE NOT YET EFFECTIVE AND HAVE NOT BEEN EARLY ADOPTED:

As set out below, amendments to standards are effective for annual periods beginning on or after April 01, 2017, and have not been applied in preparing these Financial Statements. None of these is expected to have a significant effect on the financial statements of the Company:

Amendments to Ind AS 102, Share-based Payment

The amendment to Ind AS 102 clarifies the measurement basis for cash-settled share-based payments and the accounting for modifications that change an award from cash-settled to equity-settled.

Since the Company does not have any share based payments outstanding at the reporting date, the abovementioned amendment will not have any impact on the Financial Statements of the Company. The amendment is effective for accounting periods begining on or after April 01, 2017 and early adoption of the same is not permitted.

Amendments to Ind AS 7, Cash Flow Statements

The amendment to Ind AS 7 introduces an additional disclosure that will enable users of Financial Statements to evaluate changes in liabilities arising from financing activities. The said amendment will not have any impact on the Company’s cash flow.

The amendment is effective for accounting periods beginning on or after April 01, 2017 and early adoption of the same is not permitted.

3. SIGNIFICANT ESTIMATES AND JUDGEMENTS

The preparation of Financial Statements requires the use of accounting estimates which, by definition, will seldom equal the actual results. Management also needs to exercise judgement in applying the Company’s accounting policies.

This note provides an overview of the areas that involved a higher degree of judgement or complexity, and of items which are more likely to be materially adjusted due to estimates and assumptions turning out to be different than those originally assessed. Detailed information about each of these estimates and judgements is included in relevant notes together with information about the basis of calculation for each affected line item in the financial statements.

Estimates and judgements are continually evaluated. They are based on historical experience and other factors, including expectations of future events that may have a financial impact on the Company and that are believed to be reasonable under the circumstances.

a) Estimated fair value of unlisted securities

The fair value of financial instruments that are not traded in an active market is determined using valuation techniques. The Company used its judgement to select a variety of methods and make assumptions that are mainly based on market conditions existing at the end of each reporting period. For details of the key assumptions used and the impact of changes to these assumptions see Note 37.

b) Recognition of Revenue (Customer Loyalty Programs)

The Company is running certain Customer Loyalty Programs for which revenue is being deferred on the basis of total loyalty points / complimentary nights outstanding. As required by Ind AS 18, while calculating fair value of the loyalty points/ complimentary nights, expected lapses are also considered by the Company (Reward points/complimentary nights, which will not be redeemed by the customers). On the basis of past trend, a significant portion of the complimentary nights/loyalty points has been estimated to be lapsed. Estimated lapse ratio is periodically evaluated by the Company and in case there is any change in the trend, the deferred revenue is adjusted accordingly. The fair value of complimentary nights/loyalty points is calculated on the basis of relative benefit passed on to the customers.

c) Useful life of the Hotel Buildings

The Company has adopted useful life of fixed assets as stipulated by Schedule II to the Companies Act, 2013 except for the hotel buildings for computing depreciation. In the case of the hotel building of the Company, due to superior structural condition, management decided to assess the balance useful life by independent technical expert. As per the certificates of the technical expert, the balance useful life of the hotel buildings ranges between 50 to 60 years with effect from 31st March, 2015 and are higher than those specified by Schedule II to the Companies Act, 2013. The carrying amount of the hotel building is being depreciated over its residual life.

4. EMPLOYEE BENEFIT OBLIGATION

(i) Defined Benefit Plans

a) Gratuity

The Company provides for gratuity for employees in India as per the Payment of Gratuity Act, 1972. The gratuity plan is a funded plan and the Company makes contributions to Life Insurance Corporation of India funds.

b) Leave Obligation

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

The amount of the provision of Rs.0.77 Million (2016 - Rs.0.74 Million, 2015 - Rs.0.65 Million) is presented as current, since the Company does not have an unconditional right to defer settlement for any of these obligations.

(ii) Defined contribution plans

The Company has certain defined contribution plans. Contributions are made to provident fund in India for employees at the rate of 12% of basic salary as per regulations. The contributions are made to registered provident fund administered by the government. The obligation of the Company is limited to the amount contributed and it has no further contractual nor any constructive obligation.

(iii) Movement of Defined Benefit Obligation and fair value on plan assets

The amounts recognised in the balance sheet and the movements in the net defined benefit obligation over the year are as follows:

The above sensitivity analyses are based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method is used for calculating the defined benefit liability recognised in the Balance Sheet.

The methods and types of assumptions used in preparaing the sensitivity analysis did not change compared to the prior period.

(vi) The major categories of plans assets are as follows:

Company pays contribution to LIC which in turns invests the amount in various investments. As investment is done by the LIC of India in totality basis along with contributions from other participants, hence the Company wise investment in planned assets-category/classwise is not available. The Company’s share in plan assets as intimated by the LIC of India is Rs.22.73 Million (2016: Rs.19.26 Million, 2015: Rs.18.17 Million).

(vii) Risk exposure

The Defined Benefit Obligations have the under-mentioned risk exposures:

Interest rate risk : The Defined Benefit Obligation is calculated using discount rate based on government bonds. If bond yields fall, the defined benefit obligation will tend to increase.

Salary Inflation risk : Higher than expected increases in salary will increase the defined benefit obligation.

Demographic risk : This is the risk of variability of results due to unsystematic nature of decrements that include mortality, withdrawal, disability and retirement. The effect of these decrements on the defined benefit obligation is not straight forward and depends upon the combination of salary increase, discount rate and vesting criteria. It is important not to overstate withdrawals because in the financial analysis the retirement benefit of a short career employee typically costs less per year as compared to a long service employee.

(viii) Defined benefit liability and employer contributions

Expected contributions to post employment benefit plan for the year ending 31 March 2018 is 8.27 Million

The weighted average duration of Defined Benefit Obligation in case of Gratuity is 9 years (2016 - 9 years ) and in case of Leave Obligation 11 years (2016 - 9 years)

Secured borrowings

(i) Cash Credit Facility with United Bank of India is secured by way of hypothecation of all inventories and Book-debts both present and future, ranking pari passu pertaing to all hotels except Trident, Cochin. The facility is also secured on second charge over the property, plant & equipment pertaining to Trident, Agra, Trident, Jaipur and Trident, Udaipur.

(ii) Cash Credit Facility with HDFC Bank Limited is secured by way of hypothecation of all inventories and Book-debts both present and future, ranking pari passu pertaing to all hotels. The facility is also secured on second charge over the entire moveable plant & machinery and other moveable property, plant & equipment pertaining to Trident, Chennai.

(iii) Short Term Borrowing from the Federal Bank Limited is secured by way of mortgage by deposit of title deeds in respect of the Company’s immovable properties pertaining to Trident, Udaipur.

(ii) Fair value hierarchy

This section explains the judgements and estimates made in determining the fair values of the Financial Instruments that are (a) recognised and measured at fair value and (b) measured at amortised cost and for which fair values are disclosed in the financial statements. To provide an indication about the reliability of the inputs used in determining fair value, the Company has classified its financial instruments into the three levels prescribed under the accounting standard.

Level 1: Level 1 hierarchy includes Financial Instruments measured using quoted prices. This includes listed equity instruments that have quoted price. The fair value of all equity instruments which are traded in the stock exchanges is valued using the closing price as at the reporting period. Fair value of mutual funds is determined based on the closing NAV.

Level 2: The fair value of Financial Instruments that are not traded in an active market is determined using valuation techniques which maximize the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. This is the case for unlisted equity securities, security deposits included in level 3.

(iii) Assets and liabilities which are measured at amortised cost for which fair values are disclosed

All the Financial Assets and Financial Liabilities are measured at amortised cost, carrying value is an approximation of their respective fair value.

(iv) Valuation technique used to determine fair value

Specific valuation techniques used to value Financial Instruments include:

- Investment in Green Infra Wind Generation Limited has been made pursuant to the contract for procuring electricity supply at the hotel unit. Investment in said Company is not usually traded in market. Considering the terms of the electricity supply contract and best information available in the market, cost of investment is considered as fair value of the investments.

- Fair valuation of Mercury Travels Limited (MTL) has been computed using discounted cash flow valuation method (“DCF Method”).

(vii) Valuation processes

The fair value of unlisted equity securities has been determined on the basis of valuation done by independent valuer. The main level 3 inputs for unlisted equity securities used by the Company are derived and evaluated as follows:

As per the independent valuer, the discounted cash flow valuation method (“DCF Method”) provides the most appropriate basis for valuing the equity shares of MTL. However, to reduce the bias of this single valuation methodology, value of equity shares of MTL has been also determined under the Net Asset Value method (“Net Asset Value”) and, thereafter, final value of the equity shares of MTL has been determined giving appropriate weightage to the value per equity share under the foregoing DCF Method and Net Asset Value Method respectively.

The discount rates are determined using the capital asset pricing model to calculate pre-tax rate that reflects current market assessment of time value of money and the risk specific to the asset.

Significant estimates

The fair value of financial instruments that are not traded in an active market is determined using valuation techniques. The Company uses its judgement to select a variety of methods and make assumptions that are mainly based on market conditions existing at the end of each reporting period.

Financial Risk Management

The Company’s activities expose it to market risk (including currency risk, interest rate risk and other price risk), liquidity risk and credit risk.

This note explains the sources of risk which the entity is exposed to and how the entity manages the risk :

The Company’s risk management is carried out by a treasury department under policies approved by the Board of Directors. Company treasury identifies, evaluates and hedges financial risks in close co-operation with the Company’s operating units. The board provides principles for overall risk management, as well as policies covering specific areas, such as foreign exchange risk, interest rate risk, credit risk, use of non-derivative financial instruments and investment of excess liquidity.

The Company’s risk management is carried out by senior management team. The risk management includes identification, evaluation and identifying the best possible option to reduce such risk.

(A) Market risk

(i) Foreign currency risk

Foreign currency risk arises from future commercial transactions and recognized assets or liabilities denominated in a currency that is not the Company’s functional currency (INR).

The exposure of the Company to foreign currency risk is not significant. However, this is closely monitored by the Management to decide on the requirement of hedging. The position of foreign currency exposure to the Company as at the end of the year expressed in INR are as follows :

Sensitivity

The sensitivity of profit or loss to changes in the exchange rates arises mainly from foreign currency denominated financial instruments

(ii) Interest rate risk

The exposure of the Company’s borrowing to interest rate changes at the end of the reporting period depends on the mixed of fixed rate and floating rate of the borrowings and the expected movement of market interest rate. The status of borrowings in terms of fixed rate and floating rate are as follows:

(iii) Price risk

The Company’s exposure to equity securities price risk arises from investments held by the Company in listed securities and classified in the balance sheet as at fair value through profit or loss. However, at the reporting date Company does not hold material value of quoted securities. Accordingly, Company is not exposed to significant market price risk.

(B) Credit risk

Credit risk arises when a counter party defaults on contractual obligations resulting in financial loss to the Company.

Trade receivables consist of large number of customers, spread across diverse industries and geographical areas. In order to mitigate the risk of financial loss from defaulters, the Company has an ongoing credit evaluation process in respect of customers who are allowed credit period. In respect of walk-in customers the Company does not allow any credit period and therefore, is not exposed to any credit risk.

In general, it is presumed that credit risk has significantly increased since initial recognition if the payments are more than 30 days past due.

(C) liquidity risk

The Company has a liquidity risk management framework for managing its short term, medium term and long term sources of funding vis-a-vis short term and long term utilization requirement. This is monitored through a rolling forecast showing the expected net cash flow, likely availability of cash and cash equivalents, and available undrawn borrowing facilities.

(ii) Maturities of Financial Liabilities

The tables below analyse the Company’s Financial Liabilities into relevant maturity groupings based on their contractual maturities for all non-derivative Financial Liabilities.

The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within 12 months equal their carrying balances as the impact of discounting is not significant.

Capital management

(a) Risk Management

The Company’s objectives when managing capital are to

- safeguard their ability to continue as a going concern, so that they can continue to provide returns for shareholders and benefits for other stakeholders, and

- maintain an optimal capital structure to reduce the cost of capital.

The Company manages the share capital issued and subscribed alongwith shareholder’s fund appearing in the financial statement as capital of the Company. Under the terms of the major borrowing facilities, the Company is required to comply with certain financial covenants. The Company has complied with these covenants throughout the reporting period.

5 Leases

Company as a lessee Finance lease

The Company acquired motor vehicles under finance lease. Generally, tenure of finance lease of vehicles varies between 3 to 5 years. After completion of the lease term, vehicles are transferred in the name of Company.

In case of leasehold building, tenure of the lease is 21 years. The lease is renewable on mutually agreed terms on the expiry of current lease period.

The year wise break-up of the outstanding lease obligations as on 31st March, 2017 in respect of these assets are as under:

Operating Lease

General description of the Company’s operating lease arrangements: i) The Company has entered into operating lease arrangements for:

a. residential premises for its employees and

b. Leasehold Land

Some of the significant terms and conditions of the arrangements are:

- Lease agreements for employees accommodations are cancellable in nature and may generally be terminated by either party by serving a notice and agreements are generally renewable by mutual consent on mutually agreeable terms

- Lease agreements for leasehold lands are non-cancellable in nature and cannot be terminated during the tenure of lease and agreements are generally renewable by mutual consent on mutually agreeable terms. In some cases lease rent to be payable to the lessor are linked to/contingent to the actual revenue earned by the Company from the use of leased premises.

(b) Company as a lessor Operating Lease

General description of the Company’s operating lease arrangements:

i) The Company has entered into operating lease arrangements for shops, office space and residential premises given on operating lease to third parties. Such lease arrangements are cancellable in nature and may generally be terminated by either party by serving a notice. However in some cases lease agreements are non-cancellable and lease rent are linked to/contingent to the actual revenue earned by the lessee from the use of leased premises.

6 Segment Reporting

The Company has identified single reportable segment, i.e., hotel , of its business. Accordingly, disclosures relating to the segmentation under Ind AS 108, “Operating Segment” is not required.

The Company does not have transactions of more than 10% of total revenue with any single external customer.

7 The financial statement were authorised for issue by the directors on 29th May, 2017.

8 Specified Bank Notes Disclosure (SBNs)

Transactions by the Company in Specified Bank Notes (SBN) and in other denomination notes as defined in the MCA notification G.S.R 308 (E) dated March 30, 2017 during the period from November 8, 2016 to December 30, 2016 are given below:

9 First-time adoption of Ind AS Transition to Ind AS

These are the Company’s First Financial Statements prepared in accordance with Ind AS.

The accounting policies set out in note 1 have been applied in preparing the Financial Statements for the year ended 31 March 2017, the comparative information presented in these Financial Statements for the year ended 31st March, 2016 and in the preparation of an opening Ind AS balance sheet at April 01, 2015 (The Company’s date of transition). In preparing its opening Ind AS balance sheet, the Company has adjusted the amounts reported previously in financial statements prepared in accordance with the Accounting Standards notified under Companies (Accounting Standards) Rules, 2006 (as amended) and other relevant provisions of the Act.

Set out below are the applicable Ind AS 101 optional exemptions and mandatory exceptions applied in the transition from previous GAAP to Ind AS.

A. Exemptions and exceptions availed

A.1 Ind AS optional exemptions

(a) 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 recognised in the Financial Statements as at the date of transition to Ind AS, measured as per the previous GAAP and use that as its deemed cost as at the date of transition . This exemption is also 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 previous GAAP carrying value, which has been considered as deemed cost.

(b) Classification and measurement of Lease land

In accordance with Ind AS 101, when a lease includes both land and building elements, a first time adopter may assess the classification of each element as finance or an operating lease at the date of transition to Ind AS on the basis of the facts and circumstances existing as at the date of transition. Accordingly, applying the same exemption, the Company has classified its land leases into finance lease and operating lease on the basis of the facts and circumstances existing as at the date of transition.

A.2 Ind AS mandatory exceptions

(a) Estimates

An entity’s 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 previous 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 01, 2015 are consistent with the estimates as at the same date made in conformity with previous GAAP.

(b) Classification and measurement of financial assets

Ind AS 101 requires that an entity should assess the classification of its financial assets on the basis of facts and circumstances exist on the date of transition. Accordingly, in its Opening Ind AS Balance Sheet, the Company has classified all the financial assets on basis of facts and circumstances that existed on the date of transition, i.e., April 1, 2015.

1 Deferral of Revenue relating to Loyalty Programs

The Company participate in the customer loyalty program operated and maintained by EIH Limited. The programme allows customers to complimentary room nights on completion of 5 nights bookings. Under the previous GAAP, the Company was creating provision towards its liability under the programmes on full value without considering the estimated lapses.

Under Ind AS, sales consideration received has been allocated between the hospitality services and the complimentary room nights issued. The consideration allocated to the complimentary room nights has been deferred and will be recognised as revenue when the complimentary room nights are redeemed or lapsed. The consideration to be allocated to the complimentary room nights has been determined considering the past estimated lapses on the basis of past trend. Accordingly, the Company has recognised the deferred revenue for the outstanding complimentary rooms nights with a corresponding adjustment in revenue for the period. Further provision created under previous GAAP has been reversed with corresponding impact in provision expense.

2 Fair valuation of Financial Assets and Liabilities

Under the previous GAAP, interest free lease security deposits assets (that are refundable in cash on completion of the contract term) are recorded at their transaction value. Under Ind AS, all financial assets are required to be recognised at fair value at initial recognition and subsequently at amortised cost. Accordingly, the Company has fair valued these security deposits under Ind AS. Difference between the fair value and transaction value of the security deposit has been recognised as prepaid rent.

The Company holds investment in Equity Shares of entities other than subsidiaries, associate and joint venture. Under previous GAAP such investments were measured at cost less provision for other than temporary nature diminution in the value of investment.

Under Ind AS, these investments have been measured at fair value. The Company has categorised these investments as fair value through profit & loss (FVTPL) and any changes in fair value of those investment has been recognised in the statement of profit and loss.

3 Reclassification of Leases

Under Previous GAAP due to non availability of guidance on how land leases should be classified, the Company has capitalised the leasehold land with the initial cost incurred to enter into the lease agreement along with the upfront payment of future lease rent. Annual lease rent payment were charged to the profit or loss on annual basis.

Under Ind AS, land lease has been classified into finance and operating leases. In cases where land leases has been classified as finance lease on the basis of factors such as renewal right with the Company, etc., finance lease obligations has been recognised for the future lease rent payable over the primary period of lease with corresponding impact to the retained earnings as these lands were already revalued at their fair value under previous GAAP.

In cases where land leases has been classified as operating leases, carrying value of the respective leasehold land has been reclassified to prepaid rent from property, plant and equipment.

4 Proposed Dividend including tax

Under the previous GAAP, dividends proposed by the board of directors after the balance sheet date but before the approval of the financial statements were considered as adjusting events. Accordingly, provision for proposed dividend was recognised as a liability. Under Ind AS, such dividends are recognised when the same is approved by the shareholders in the general meeting. Accordingly, the liability for proposed dividend included under provisions has been reversed with corresponding adjustment to retained earnings.

5 Tax effects of adjustments

Additional deferred tax asset/(liability) has been recognised corresponding to the adjustments to retained earnings/profit or loss as a result of Ind AS Implementation.

6 ”Remeasurnment of Post-employment benefit obligations (Net of Tax)”

Under Ind AS, all items of income and expense recognised 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 recognised in profit or loss but are shown in the statement of profit and loss as ‘other comprehensive income’ includes remeasurements of defined benefit plans. The concept of other comprehensive income did not exist under previous GAAP. Accordingly, loss on remeasurements of post-employment benefit obligation has been reclassified to the Other Comprehensive Income for the period.

10 The previous year’s figures have been regrouped, rearranged and reclassified wherever necessary. Amounts and other disclosures for the preceding year are included as an integral part of the current year Financial Statements and are to be read in relation to the accounts and other disclosures relating to the current year.


Mar 31, 2016

1. Contingent Liabilities and Commitments (to the extent not provided for)

a) Claims against the Company not acknowledged as debts pending appellate / judicial decisions :

The Management believes that the outcome of the above will not have any material adverse effect on the financial position of the Company.

b) Guarantees :

Counter guarantees issued to banks and remaining outstanding Rs, 3.84 Million (2015 - Rs, 3.97 Million).

c) Capital Commitments :

The estimated amount of contracts remaining to be executed on Capital Account and not provided for net of advances Rs, 16.09 Million (2015 - Rs, 51.70 Million).

2. The method of determining cost for valuation of inventories has been changed from ''First-in-First-out'' to ''Cumulative Weighted Average'' during the current year. As a result of this change, the profit of the Company for the year ended 31st March, 2016 is higher by '' 0.50 Million. Unserviceable/damaged/discarded stocks and shortages are charged to the Statement of Profit and Loss as per past practice.

3. The Company has adopted useful life of fixed assets as stipulated by Schedule II to the Companies Act, 2013 except for the hotel buildings for computing depreciation. In the case of the hotel buildings of the Company, due to superior structural condition, management decided to assess the balance useful life by independent technical expert. As per the certificates of the technical expert as on 31.03.2015, the balance useful life of the hotel buildings of the Company ranges between 50 to 60 years. The carrying amount of each of the hotel buildings is being depreciated over its residual life. Leased vehicles are mortised over their respective lease period or five years, whichever is earlier. Long Term Leasehold lands are mortised over respective lease period(s).

4. Traded Goods:

a. Inventory of Stores & Operating Supplies includes Boutique Stock at year end Rs, 2.89 Million (2015 - Rs, 2.05 Million). Corresponding opening stock Rs, 2.05 Million (2015 - Rs, 1.41 Million)

b. Other Services includes revenue from sale of Boutique Stock at year end Rs, 18.27 Million (2015 - Rs, 19.72 Million)

c. Purchases include purchase of Boutique Stock during the year Rs, 12.54 Million ( 2015 - Rs, 13.88 Million).

a) Company is required to spend of Rs, 7.21 Million (2015 - Rs, 5.80 Million ) on account of CSR activities during the year ended 31st March, 2016 under section 135 of the Companies Act, 2013.

5. Segment Reporting:

As the Company''s activity is limited to hotels, there is no separate reportable segment as per the Accounting Standard (AS-17) on "Segment Reporting".

6. Related Party Disclosures:

The details of transactions entered into with Related Parties during the year are as follows: (A) NAMES OF THE RELATED PARTIES I. Key Management Personnel & their relatives

Mr. Vikram Oberoi - Managing Director Mr. P.R.S. Oberoi - Relative of Mr Vikram Oberoi Mr. Samidh Das - Chief Financial Officer Ms. Indrani Ray - Company Secretary

a. Fixed Assets as on 31.03.2016 includes assets acquired under finance lease amounting to Rs, 15.65 Million (2015 - Rs, 18.47 Million ). This includes an amount of Rs, 3.60 Million (2015 - Rs, 0.65 Million ) being assets acquired during the year under finance lease and capitalized in line with the requirement of Accounting Standard (AS-19) on "Accounting for Leases". Depreciation for the year includes an amount of Rs, 3.60 Million (2015 - Rs, 4.48 Million) being depreciation charged on these assets.

b. Disclosures in respect of Company''s operating lease arrangements entered on or after 1st April, 2001 under Accounting Standard (AS-19) on "Leases":

General description of the Company''s operating lease arrangements:

i) The Company has entered into operating lease arrangements for:

a. residential premises for its employees and

b. shops, office space and residential premises given on operating lease to third parties.

Some of the significant terms and conditions of the arrangements are:

- Lease agreements are not non-cancellable in nature and may generally be terminated by either party by serving a notice;

- The lease agreements are generally renewable by mutual consent on mutually agreeable terms.

ii) Rent in respect of the above is charged/credited to the Statement of Profit and Loss.

7. The previous year''s figures have been regrouped, rearranged and reclassified wherever necessary. Amounts and other disclosures for the preceding year are included as an integral part of the current year Financial Statements and are to be read in relation to the amounts and other disclosures relating to the current year.

Chairperson of two committees

( ) Numbers within brackets represent participation in meetings through video-conferencing @ Only Audit Committee and Stakeholders Relationship Committee has been considered as per Regulation 26 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations")


Mar 31, 2015

1. Shares allotted as fully paid up pursuant to contract(s) without payment being received in cash :

Of the above 30,468,147 (2014 - 30,468,147) Equity shares, 9,086,666 (2014 - 9,086,666) Equity shares of Rs. 10 each have been allotted as fully paid up in 2006 - 2007 pursuant to scheme of Amalgamation of Indus Hotels Corporation Limited with the Company without payments being received in cash.

2. a) The Company has adopted useful life of fixed asset as stipulated by Schedule II to the Companies Act, 2013 except for as stated below:

i. In case of hotel buildings of the Company, due to superior structural condition, management decided to assess the balance useful life by independent technical expert. Based on the certification of the technical expert the carrying amount of the hotel buildings after setting aside residual values are being depreciated over residual life ranging from 50 to 60 years. Had the Company continued to compute depreciation at the same method and rates as applied in the previous year, depreciation charge for the current year would have been lower by Rs. 48.30 Million.

ii. Leased Vehicles - over their respective lease period or five years, whichever is earlier.

iii. Long Term Leasehold Lands are amortised over their respective lease period(s).

b) Depreciation for the year as per statement of Profit and Loss includes Rs. 0.46 Million ( 2014 - Rs. 0.46 Million) being depreciation on the increased value of land & building due to the effect of revaluation in line with the 'Application Guide on the Provisions of schedule II to the Companies Act, 2013' of the Institute of Chartered Accountants of India. Equivalent amount has also been transferred from Revaluation Reserve to General Reserve. Corresponding figure of Rs. 0.46 Million in the previous year was adjusted from Revaluation Reserve.

3. Contingent Liabilities and Commitments (to the extent not provided for)

a) Claims against the Company not acknowledged as debts pending appellate / judicial decisions :

As at 31st March 2015 2014 Rupees Rupees Million Million

1 Land & Building, Property Tax and Water Tax 14.46 7.48

2 Value Added Tax 26.12 9.26

3 Excise Duty 0.08 0.08

4 Service Tax 72.36 72.36

5 Luxury Tax 29.59 17.05

6 Income Tax 17.16 30.45

7 other Claims 1.33 1.00

The Management believes that the outcome of the above will not have any material adverse effect on the financial position of the Company.

b) Guarantees :

(i) Counter guarantees issued to banks and remaining outstanding Rs. 3.97 Million (2014 - Rs. 3.42 Million).

c) Capital Commitments :

The estimated amount of contracts remaining to be executed on Capital Account and not provided for net of advances Rs. 51.70 Million (2014 - Rs. 5.46 Million).

4. Current Tax

The Company has calculated its tax liability for the year and adjusted the same fully against Minimum Alternative Tax (MAT), resulting in no additional tax expenses for the year (2014 - Rs. Nil).

5. Traded Goods:

a. Inventory of Stores & Operating Supplies includes Boutique Stock at year end Rs. 2.05 Million (2014 - Rs. 1.41 Million). Corresponding opening stock Rs. 1.41 Million (2014 - Rs. 1.55 Million)

b. Other Services includes revenue from sale of Boutique Stock at year end Rs. 19.72 Million ( 2014 - Rs. 27.38 Million)

c. Purchase include purchase of Boutique Stock during the year Rs. 13.88 Million (2014 - Rs. 19.10 Million).

6. Segment Reporting:

As the Company's activity is limited to hotels, there is no separate reportable segment as per the Accounting Standard (AS-17) on "segment Reporting".

6. Leases:

a. Fixed Assets as on 31.03.2015 includes assets acquired under finance lease amounting to Rs. 18.47 Million (2014 - Rs. 22.88 Million). This includes an amount of Rs. 0.65 Million (2014 - Rs. 5.09 Million ) being assets acquired during the year under finance lease and capitalised in line with the requirement of Accounting Standard (AS-19) on "Accounting for Leases". Depreciation for the year includes an amount of Rs. 4.48 Million (2014 - Rs. 6.09 Million) being depreciation charged on these assets.

b. Disclosures in respect of Company's operating lease arrangements entered on or after 1st April, 2001 under Accounting Standard (AS-19) on "Leases":

General description of the Company's operating lease arrangements:

i) The Company has entered into operating lease arrangements for:

a. residential premises for its employees and

b. shops, office space and residential premises given on operating lease to third parties.

Some of the significant terms and conditions of the arrangements are:

* Lease agreements are not non-cancellable in nature and may generally be terminated by either party by serving a notice;

* The lease agreements are generally renewable by mutual consent on mutually agreeable terms.

ii) Rent in respect of the above is charged/credited to the Statement of Profit and Loss.

7. The previous year's figures have been regrouped, rearranged and reclassified wherever necessary. Amounts and other disclosures for the preceding year are included as an integral part of the current year Financial Statements and are to be read in relation to the amounts and other disclosures relating to the current year.


Mar 31, 2013

1.depreciation

a) Depreciation has been provided for in the Accounts on "Straight Line Method" at the rates prescribed in Schedule XIV to the Companies Act, 1956, except for as stated below:

i. Buildings at Regent Estate, Shimla - over the lease period(s).

ii. Leased Vehicles - over their respective lease period or five years, whichever is earlier.

iii. Long Term Leasehold Lands are amortised over their respective lease period(s).

b) Depreciation for the year includes amortisation on revalued leasehold land acquired pursuant to Scheme of Amalgamation (Note 31 ) amounting to Rs. 1.27 Million ( 2012 - Rs. Nil ) out of which Rs. 0.46 Million ( 2012 - Rs. Nil ) has been adjusted against Revaluation Reserve.

2. Highlights of scheme of Amalgamation sanctioned by Hon''ble Madras High Court on 6th February, 2013

a) Particulars of amalgamating companies:

Pursuant to a Scheme of Amalgamation ("the sanctioned Scheme") under sections 391 to 394 of the Companies Act, 1956, sanctioned by Hon''ble Madras High Court on 6th February, 2013, Island Hotel Maharaj Limited ("the Transferor Company") having one hotel at Cochin, namely "Trident, Cochin" has been amalgamated with the Company i.e. EIH Associated Hotels Limited operative 1st April, 2011 (''the Appointed Date"). Both the Companies are engaged in the business of hoteliering. As a result of the amalgamation the entire undertaking of the Transferor Company stands transferred to and vests in the Company as a going concern from the Appointed Date without any further act, deed or thing and the Transferor Company stands dissolved without winding up.

b) Effective date of amalgamation:

The sanctioned Scheme has become effective from 28th February, 2013 ("the Effective Date") upon certified copies of the order of the Hon''ble Madras High Court having been filed with Registrars of Companies as per requirements of Section 391(3) of the Companies Act, 1956.

c) Method of Accounting:

The Company has accounted for the amalgamation which is in the nature of merger under the pooling of interests method, in accordance with the Accounting Standard (AS-14), "Accounting for Amalgamation" . Accordingly, all assets and liabilities, including reserves of the Transferor Company have been recorded in the books of account of the Company at their respective book values as on Appointed Date.

d) The amalgamation, as per the sanctioned Scheme, has been accounted for in the books of the Company in the following manner:

1) Since the Company holds 100% (along with its nominees) of the issued, subscribed and paid-up capital of the Transferor Company, all shares held by the Company (along with its nominees) in the share capital of the Transferor Company shall stand cancelled without any further act or deed, from the Appointed Date. There would neither be allotment of any new shares nor any payment be made to any person whatsoever in consideration or in lieu of the transfer and vesting of the Undertaking / Business of the Transferor Company in the Company.

2) The paid up Equity Share Capital of Rs. 319.71 Million appearing in the books of account of the Transferor Company and the corresponding Investments of Rs. 889.36 Million in respect thereof appearing in the books of account of the Company stand cancelled against each other and the difference arising there from amounting to Rs. 569.65 Million has been adjusted against the Securities Premium Account of the Company.

3) The debit balance in the Profit and Loss Account of Rs. 505.25 Million appearing in the Financial Statements of the Transferor Company has been aggregated with the balance in the Profit and Loss Account appearing in the Financial Statements of the Company.

e) The employees of the Transferor Company in service as on the Effective Date have become employees of the Company on the same terms and conditions on which they were engaged by the Transferor Company without treating it as a break, discontinuance or interruption in service on the said date. Accordingly, the services of such Employees for the purpose of provident fund or gratuity or superannuation or other statutory purposes and for all purposes will be reckoned from the date of their respective appointments with the Transferor Company.

f) All contracts, deeds, bonds, agreements, arrangements, engagements and other instruments of whatsoever nature to which the Transferor Company was a party or to the benefit of which the Transferor Company may be eligible and which have not lapsed and are subsisting on the Effective Date remain in full force and effect against or in favour of the Company, as the case may be, and are enforceable by or against the Company as fully and effectually as if, instead of the Transferor Company, the Company was a party or beneficiary thereto.

g) The Financial Statements of the current year include transactions pertaining to Trident, Cochin, the only hotel of the Transferor Company, and are therefore to that extent not comparable with those of previous year.

h) Loss of the Transferor Company for the period 1st April, 2011 to 31st March, 2012 has been included in the Surplus in Statement of Profit and Loss. (Note 3).

3. Contingent Liabilities and Commitments (to the extent not provided for)

a) Claims against the Company not acknowledged as debts pending appellate / judicial decisions :

As at 31st March 2013 2012 Rupees Rupees Million Million

1 Land & Building, Property Tax and Water Tax 14.59 152.17

2 Value Added Tax 3.44 1.25

3 Excise Duty 0.08 0.08

4 Service Tax 9.88

5 Luxury Tax 8.32

6 Other Claims 2.71 1.17

b) Capital Commitments

The estimated amount of contracts remaining to be executed on Capital Account and not provided for net of advances Rs. 8.01 Million (2012 - Rs. 1.00 Million).

4. Current Tax

The Company has calculated its tax liability for the year and adjusted the same fully against Minimum Alternative Tax (MAT), resulting in no additional tax expenses for the year (2012 - Rs. Nil).

5. Rights Issue of Equity Shares

The Company made a Rights Issue of 10,881,481 Equity Shares of Rs. 10 each at a premium of Rs. 90 per share (Issue price Rs. 100 per share). For every existing 9 Equity Shares, 5 Shares were issued as Rights. Shares were allotted on 21st October, 2012. Out of the proceeds of Rights Issue, Rs. 108.81 Million were credited to Equity Share Capital and Rs. 979.34 Million to the Securities Premium Account. Rights Issue expenses of Rs. 28.33 Million have been adjusted against Securities Premium Account. Accordingly, the Company''s Equity Share Capital has increased from Rs. 195.87 Million to Rs. 304.68 Million and Securities Premium Account increased from Rs. 126.00 Million to Rs. 1,077.01 Million.

6. Other payments to Auditors in the matter of:

i. Rights Issue of Equity Shares : Rs. 1.57 Million (inclusive of service tax) (2012- Nil) has been adjusted against Securities Premium Account.

ii. Amalgamation of erstwhile Island Hotel Maharaj Limited with the Company: Rs. 0.34 Million (inclusive of service tax) (2012-Nil) included in "Amalgamation Expenses" (Note 30).

7. Segment Reporting:

As the Company''s activity is limited to only hotel operations, there is no separate reportable segment as per the Accounting Standard (AS-17) on "Segment Reporting".

8. Related Party Disclosures:

The details of transactions entered into with Related Parties during the year are as follows:

(A)

I. Key Management Personnel

Mr. Vikram Oberoi - Managing Director

II. Enterprise in which Key Management Personnel have significant influence

EIH Limited

9. Leases

a. Fixed Assets acquired under finance lease amounting to Rs. 24.07 Million (2012 - Rs. 22.15 Million) being the assets acquired between 1st April, 2001 and 31st March, 2013. This includes an amount of Rs. 7.64 Million (2012 - Rs. 5.31 Million) being assets acquired during the year under finance lease and capitalised in line with the requirement of Accounting Standard (AS-19) on "Accounting for Leases". Depreciation for the year includes an amount of Rs. 5.41 Million (2012 - Rs. 5.34 Million) being depreciation charged on these assets.

b. Disclosures in respect of Company''s operating lease arrangements entered on or after 1st April, 2001 under Accounting Standard (AS-19) on "Leases":

General description of the Company''s operating lease arrangements:

i) The Company has entered into operating lease arrangements for:

a. residential premises for its employees and

b. shops, office space and residential premises given on operating lease to third parties.

Some of the significant terms and conditions of the arrangements are:

- Lease agreements are not non-cancellable in nature and may generally be terminated by either party by serving a notice;

- The lease agreements are generally renewable by mutual consent on mutually agreeable terms.

ii) Rent in respect of the above is charged/credited to the Statement of Profit and Loss.

10. The previous year''s figures have been regrouped, rearranged and reclassified wherever necessary. Amounts and other disclosures for the preceding year are included as an integral part of the current year Financial Statements and are to be read in relation to the amounts and other disclosures relating to the current year.


Mar 31, 2012

A) Rights, preferences and restrictions attached to shares:

The Company has one class of equity shares having a par value of Rs 10 per share. Each shareholder is eligible for one vote per share held and such dividend as proposed by the Board of Directors, subject to the approval of the shareholders in the ensuring Annual General Meeting.

b) Shares allotted as fully paid up pursuant to contract(s) without payment being received in cash (during 5 years immediately preceding 31st March, 2012):

Of the above 19,586,666 (2011 - 19,586,666) Equity Shares, 9,086,666 (2011 - 9,086,666) Equity Shares of Rs 10 each have been allotted as fully paid up in 2006-2007 pursuant to the Scheme of Amalgamation of Indus Hotels Corporation Limited with the Company without payments being received in cash.

1 (a) Long Term Defined Benefit Plans in respect of Gratuity and Compensated Absences on 31st March, 2012 as per Actuarial Valuations using Projected Unit Credit Method and recognised in the Financial Statements in respect of Employee Benefit Scheme:

2. Contingent Liabilities and Commitments (to the extent not provided for)

i. Claims against the Company not acknowledged as debt:

Claims against the Company not acknowledged as debts pending settlement of disputes amounting to Rs 157.52 Million (2011 - Rs 150.29 Million). The Company has paid Rs 4.44 Million (2011- Rs 13.02 Million) under protest.

ii. Capital commitments:

The estimated amount of contracts remaining to be executed on Capital Account and not provided for net of advances Rs 1.00 Million (2011 - Rs 38.07 Million).

3. Depreciation

Depreciation has been provided for in the Accounts on "Straight Line Method" at the rates prescribed in Schedule XIV to the Companies Act, 1956, except for specified assets as stated below, which are depreciated as follows and in respect of which depreciation amounts are not less than those prescribed under the Companies Act, 1956:

i. Buildings, Lift and Electrical Fittings at Regent Estate, Shimla, over their lease period of twenty one years or over the remaining lease period from the date of installation, whichever is earlier.

ii. Leased Vehicles over their respective lease period or five years, whichever is earlier.

iii. Depreciation includes Rs 10.83 Million (2011 - Rs 13.01 Million) being provision for amortisation of long term leasehold land.

4. Current Tax

The Company has calculated its tax liability for the year and adjusted the same fully against Minimum Alternative Tax (MAT) resulting in no additional tax expense for the year (2011 - Rs 2.40 Million).

5. Proposed amalgamation of our subsidiary (Island Hotel Maharaj Limited)

The Board has approved a Scheme of Amalgamation in the nature of merger of our wholly owned subsidiary, Island Hotel Maharaj Limited with the Company with effect from the appointed date being 1st April, 2011.

The Scheme is subject to and will come into effect upon receipt of necessary approvals and completion of requisite formalities for which steps and proceedings have already been initiated by the companies concerned. Pending the same, no effect of the Scheme has been given in the attached accounts of the Company.

6. Proposed Rights Issue of Equity Shares

The Board of Directors of the Company at a meeting held on 28th March, 2012, approved a Rights issue of Equity Shares upto Rs 1,100.00 Million. The draft Letter of Offer was filed with the Securities and Exchange Board of India (SEBI) on 30th March, 2012 and can be accessed on the SEBI website.

7. Details of Consumption and Purchases:

The Company is not required to give quantitative and value wise information in respect of purchase, consumption, turnover, stock etc. as the same is exempted vide Circular No. SO 301(E) dated 08.02.2011 issued by Ministry of Corporate Affairs, Government of India.

8. Segment Reporting

As the Company's activity is limited to only hotel operations, there is no separate reportable segment as per the Accounting Standard (AS-17) on "Segment Reporting" notified pursuant to the Companies (Accounting Standards) Rules, 2006.

9. Related Party Disclosures

The details of transactions entered into with Related Parties during the year are as follows:

(A)

I. Subsidiary Company

Island Hotel Maharaj Limited

II. Key Management Personnel

Mr. Vikram Oberoi - Managing Director

III. Enterprise in which Key Management Personnel have significant influence

EIH Limited

10. Leases

a. Fixed Assets acquired under finance lease amounting to Rs 22.15 Million (2011 - Rs 22.13 Million) being the assets acquired between 1st April, 2001 and 31st March, 2012. This includes an amount of Rs 5.31 Million (2011 - Rs 13.39 Million) being assets acquired during the year under finance lease and capitalised in line with the requirement of Accounting Standard (AS-19) on "Accounting for Leases" notified pursuant to the Companies (Accounting Standards) Rules, 2006. Depreciation for the year includes an amount of Rs 5.34 Million (2011 - Rs 3.90 Million) being depreciation charged on these assets.

b. Disclosures in respect of Company's operating lease arrangements entered on or after 1st April, 2001 under Accounting Standard (AS-19) on Leases:

i) General description of the Company's operating lease arrangements:

The Company has entered into operating lease arrangements primarily for hiring office premises, site offices and residential premises for its employees and for giving premises on rent to tenants. Some of the significant terms and conditions of the arrangements are:

- Lease agreements are not non-cancellable in nature and may generally be terminated by either party by serving a notice;

- The lease agreement are generally renewable by mutual consent on mutually agreeable terms.

ii) Rent in respect of the above is charged/credited to the Profit and Loss Account.

11. The previous year's figures have been regrouped, rearranged and reclassified wherever necessary. Amounts and other disclosures for the preceding year are included as an integral part of the current year Financial Statements and are to be read in relation to the amounts and other disclosures relating to the current year.


Mar 31, 2011

1. the estimated amount of contracts remaining to be executed on Capital Account and not provided for net of advances Rs. 38.07 Million (2010 - Rs. 4.03 Million).

2. Contingent liabilities not provided for in respect of :

(a) claims against the Company not acknowledged as debts pending settlement of disputes amounting to Rs. 130.47 Million (2010 - Rs. 107.93 Million).

(b) guarantee given by the Company for Rs. nil (2010 - Rs. 350.00 Million) to a bank on behalf of its wholly owned subsidiary Company, Island Hotel Maharaj Limited.

(c) counter guarantee given by the Company to the extent of Rs. nil (2010 - Rs. 25.00 Million) to Deutsche Bank.

(d) property tax demand of Rs. 5.34 Million (2010 - Rs. 5.34 Million) in respect of the oberoi Rajvila¯s, Jaipur, against which the Company has fled a Civil Writ Petition in the High Court of Rajasthan which is pending adjudication. However, the Company has paid Rs. 3.64 Million (2010 - Rs. 3.64 Million) under protest.

(e) sales tax demand amounting to Rs. 9.58 Million (2010 - Rs. 1.06 Million) against which the Company has preferred an appeal. the Company made a payment of Rs. 2.19 Million (2010 - Rs. 0.45 Million) under protest.

(f) urban Development tax demand amounting to Rs. 4.91 Million (2010 - Rs. 3.51 Million) against which the Company has preferred an appeal. the Company has made a payment of Rs. 7.20 Million (2010 - Rs. 1.50 Million) under protest.

3. Depreciation has been provided for in the Accounts on "straight Line Method" at the rates prescribed in schedule xIV to the Companies Act, 1956, except for specifed assets as stated below, which are depreciated as follows and in respect of which depreciation amounts are not less than those prescribed under the Companies Act, 1956:

(i) Buildings, Lift and electrical Fittings at Regent estate, shimla, over their lease period of twenty one years or over the remaining lease period from the date of installation, whichever is earlier.

(ii) Leased Vehicles over their respective lease period or fve years, whichever is earlier.

(iii) Depreciation includes Rs. 13.01 Million (2010 - Rs. 0.64 Million) being provision for amoritisation of long term leasehold land.

4a. Fixed Assets acquired under fnance lease amounting to Rs. 22.13 Million (2010 - Rs. 11.10 Million) being the assets acquired between 1st April, 2001 and 31st March, 2011. this includes an amount of Rs. 13.39 Million (2010 - Rs. 5.95 Million) being assets acquired during the year under fnance lease and capitalised in line with the requirement of Accounting standard (As-19) on "Accounting for Leases" notifed pursuant to the Companies (Accounting standards) Rules, 2006. Depreciation for the year includes an amount of Rs. 3.90 Million (2010 - Rs. 2.59 Million) being depreciation charged on these assets.

5b. Disclosures in respect of Companys operating lease arrangements entered on or after 1st April, 2001 under Accounting standard (As-19) on Leases.

i) General description of the Companys operating lease arrangements:

the Company has entered into operating lease arrangements primarily for hiring offce premises, site offces and residential premises for its employees and for giving premises on rent to tenants. some of the signifcant terms and conditions of the arrangements are:

– Lease agreements are not non-cancellable in nature and may generally be terminated by either party by serving a notice;

– the lease agreement are generally renewable by mutual consent on mutually agreeable terms.

ii) Rent in respect of the above is charged/credited to the Proft and Loss Account.

6. Inventories are valued at cost which is based on First-in First-out method or net realisable value, whichever is lower. unserviceable/damaged/discarded stocks are charged to the Proft and Loss Account.

7. the Company has calculated its tax liability after considering Minimum Alternative tax (MAt). this has resulted in an additional tax expense of Rs. 2.40 Million and the balance carried forward is to be set off against any future tax liability. MAt Credit entitlement has been shown under Loans and Advances in the Balance sheet as at 31st March, 2011.

8. As the Companys activity is limited to only hotel operations, there is no separate reportable segment as per the Accounting standard (As-17) on "segment Reporting" notifed pursuant to the Companies (Accounting standards) Rules, 2006.

9. the Company is not required to give quantitative and value wise information in respect of purchase, consumption, turnover, stock etc. as the same is exempted vide Circular no. so 301(e) dated 08.02.2011 issued by Ministry of Corporate Affairs, Government of India.

10. the details of transactions entered into with Related Parties during the year are as follows:

(a)

(i) subsidiary Company

Island Hotel Maharaj Limited

(ii) key Management Personnel

Mr. Vikram oberoi – Managing Director

(iii) enterprise in which key Management Personnel have signifcant infuence

EIH Limited

11. the previous years fgures have been regrouped, rearranged and reclassifed wherever necessary. Amounts and other disclosures for the preceding year are included as an integral part of the current year Financial statements and are to be read in relation to the amounts and other disclosures relating to the current year.


Mar 31, 2010

1. The estimated amount of contracts remaining to be executed on Capital Account and not provided for net of advances Rs. 4.03 Million (2009 - Rs. 9.44 Million).

2. Contingent liabilities not provided for in respect of :

(a) claims against the Company not acknowledged as debts pending settlement of disputes amounting to Rs. 107.93 Million (2009 - Rs. 85.47 Million).

(b) guarantee given by the Company for Rs. 350.00 Million (2009 - Rs. 350.00 Million) to a bank on behalf of its wholly owned Subsidiary Company, Island Hotel Maharaj Limited.

(c) counter guarantee given by the Company to the extent of Rs. 25.00 Million (2009 - Rs. 25.00 Million) to Deutsche Bank.

(d) property tax demand of Rs. 5.34 Million (2009 - Rs. 5.34 Million) in respect of The Oberoi Rajvilas, Jaipur, against which the Company has filed a Civil Writ Petition in the High Court of Rajasthan which is pending adjudication. However, the Company has paid Rs. 3.64 Million (2009 - Rs. 3.64 Million) under protest.

(e) sales tax demand amounting to Rs. 1.06 Million (2009 - Rs. 1.06 Million) against which the Company has preferred an appeal. The Company made a payment of Rs. 0.45 Million (2009 - Rs. 0.45 Million) under protest.

(f) Urban Development Tax demand amounting to Rs. 3.51 Million (2009 - Rs. 3.01 Million) against which the Company has preferred an appeal. The Company has made a payment of Rs. 1.50 Million (2009 - Rs. 0.89 Million) under protest.

3. There are no reported Micro and Small Enterprises as defined in the Micro, Small and Medium Enterprises Development Act, 2006, to whom the Company owes dues.

4. During the year, long term leasehold land except for perpetual leases have been depreciated over the remaining period of lease, commencing from the date the land was put to use for commercial purposes. As a result, a sum of Rs. 0.64 Million (2009 - Rs. 0.64 Million), has been included in Depreciation and charged to the Profit and Loss Account for the year.

5. Depreciation has been provided for in the Accounts on "Straight Line Method" at the rates prescribed in Schedule XIV to the Companies Act, 1956, except for specified assets as stated below, which are depreciated as follows and in respect of which depreciation amounts are not less than those prescribed under the Companies Act, 1956:

(i) Buildings, Lift and Electrical Fittings at Regent Estate, Shimla, over their lease period of twenty one years or over the remaining lease period from the date of installation, whichever is earlier.

(ii) Leased Vehicles over their respective lease period or sixty months, whichever is earlier.

(iii) Long term Leasehold Lands, other than perpetual leases are depreciated over the balance period of the leases commencing from the date the land was put to use for commercial purposes.

7. Fixed Assets acquired under finance lease amounting to Rs. 11.10 Million (2009 - Rs. 9.77 Million) being the assets acquired between 1st April, 2001 and 31st March, 2010. This includes an amount of Rs. 5.95 Million (2009 - Rs. 1.74 Million) being assets acquired during the year under finance lease and capitalised in line with the requirement of Accounting Standard (AS-19) on "Accounting for Leases" notified pursuant to the Companies (Accounting Standards) Rules, 2006. Depreciation for the year includes an amount of Rs. 2.59 Million (2009 - Rs. 2.38 Million) being depreciation charged on these assets.

8. Inventories are valued at cost which is based on First-in First-out method or net realisable value, whichever is lower. Unserviceable/damaged/discarded stocks are charged to the Profit and Loss Account.

9. The Company has calculated its tax liability after considering Minimum Alternative Tax (MAT). This has not resulted in an additional tax expense as MAT is to be set off against any future tax liability and, accordingly MAT Credit Entitlement has been shown under Loans and Advances in the Balance Sheet as at 31st March, 2010.

10. As the Companys activity is limited to only hotel operations, there is no separate reportable segment as per the Accounting Standard (AS-17) on "Segment Reporting" notified pursuant to the Companies (Accounting Standards) Rules, 2006.

11. Earnings in Foreign Currencies on Sales : (As per return submitted to DGFT)

12. The details of transactions entered into with Related Parties during the year are as follows: (A)

(I) Subsidiary Company

Island Hotel Maharaj Limited

(II) Key Management Personnel

Mr. Vikram Oberoi - Managing Director

(III) Enterprise under common control

EIH Limited

13. The previous years figures have been regrouped, rearranged and reclassified wherever necessary. Amounts and other disclosures for the preceding year are included as an integral part of the current year financial statements and are to be read in relation to the amounts and other disclosures relating to the current year.

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