Hotel Leela Venture
BSE: 500193 | NSE: HOTELEELA | ISIN: INE102A01024 | Hotels
- Directors Report
- Chairman's Speech
- Auditors Report
- Notes To Accounts
- Accounting Policy
- Finished Products
- Raw Materials
| Notes to Accounts | Year End : Mar '09 |
1) Secured Loans:
a) Redeemable Non-Convertible Debentures:
i) The Company lias issued on 19th December 2008, 12.5% Secured
Redeemable Non- Convertible Debentures of Rs. 10,00,000/- each
aggregating Rs. 90.00 crores redeemable at par on 18th December 2013.
ii) The Company has issued on 30st December 2008, 13% Secured
Redeemable Non Debentures Convertible of Rs. 10,00,000/- each
aggregating Rs.60.00 crores redeemable at par on 30st December 2013.
iii) Debenture Redemption Reserve is created in accordance with
applicable laws and guidelines.
iv) For both the above issues, documentation relating to creation of
security is under process.
b) Term Loans:
i) Term loan of Rs.165.17 crores from the Infrastructure Development
Finance Compan) Limited is secured by a pari passu charge on the fixed
assets of The Leela Palace Kempinski, Bangalore and securitized against
certain credit card receivables.
ii) Out of Foreign Currency Loan of Rs.212.69 crores and Rupee Term
Loan of Rs.100.1 4 crores from EX1M Bank, an amount of Rs. 165.58
crores is secured by a pari passu charge on the immovable properties of
The Leela Kempinski Mumbai and Rs. 147.25 crores is secured by a pari
passu charge on the fixed assets of the Udaipur properly.
iii) Term Loan of Rs. 12.49 crores from The Jammu & Kashmir Bank
Limited is secured by a pari passu charge on the immovable properties,
both present and future, of the new club suites at The Leela Goa.
iv) Term loans of Rs.12.31 Crores from Bank of India, Rs.14.10 crores
form Union Bank of India and Rs.20.10 crores from Oriental Bank of
Commerce are secured by a pari passu charge on the fixed assets, both
present and future, of The Leela Goa (excluding the club suites) and
term loans from Bank of India and Union Bank of India are securitized
against the credit card receivables of The Leela Kempinski, Mumbai.
v) Term loans of Rs.7.53 crores from Bank of Baroda is secured by a
pari passu charge on the immovable properties of The Leela Kempinski
Mumbai and securitized against credit card receivables of The Leela
Kempinski, Mumbai.
vi) Foreign Currency Loans of Rs.127.38 crores from State Bank of
Mysore, Rs.61.06 crores from State Bank of Saurashtra, Rs. 62.13 crores
from State Bank of Indole, Rs.62.29 crores from State Bank of
Travancore and Rupee Term Loan Rs.140 crores from Bank of India,
Rs.20.00 crores from State Bank of Mysore, Rs.14.70 crores from State
Bank of Travancore, Rs.50.00 crores from State Bank of Bikaner and
Jaipur, Rs.32.00 crores from State Bank of Patiala and Rs.45.00 crores
from State Bank of Hyderabad are secured by first charge on the fixed
assets, both present and future, of Delhi and Chennai properties.
vii) Out of the Foreign Currency Loans aggregating Rs.306.73 crores and
Rupee Term Loan of Rs.80.00 crores from State Bank of India, a sum of
Rs.99.41 crores is secured by pari passu charge on the fixed assets,
both present and future, of The Leela Goa (excluding the club suites at
The Leela Goa) and Rs287.32 crores by first charge on the fixed assets,
both present and future of Delhi and Chennai properties.
viii) Term loan of Rs.25.00 crores from Federal Bank is secured by
first charge on the fixed assets, both present and future, of Delhi and
Chennai properties.
ix) Term loan of Rs.6.28 crores from HDFC Bank Limited is secured by
hypothecation of certain vehicles.
x) Term loan of Rs.30 crores from the Housing Development Finance
Corporation Limited is secured against a pari passu charge on the
immovable properties of The Leela Palace Kempinski, Bangalore.
xi) Term loans of Rs.20.40 crores from Bank of India, Rs.10.48 crores
from Union Bank of India and Foreign Currency Loan of Rs.5.96 crores
from Union Bank of India are secured by a pari passu charge on the
fixed assets of The Leela Kempinski, Kovalam.
c) Cash Credit:
Cash Credit and other Working Capital facilities from a consortium of
banks are secured by hypothecation of Companys inventories of stores
and provisions, other stocks including inventories in transit, and book
debts (except the credit card receivables), both present and future,
and secured by a pari passu second charge on the Fixed Assets of The
Leela Goa (excluding the club suites).
2) Fixed Assets:
a) Land (Leasehold) includes Development expenses, stamp duty and
oilier direct charges
b) Projects in progress:
(i) Projecls-in-progress includes Rs.l 17.60 crores, (previous year
Rs.71.38 crorcs) inclined in setting up an independent tower at Mumbai
adjacent to the existing hotel, held up on account of disputes with the
Airports Authority of India (AAI) which includes Rs. 17.80 crores of
royalty and interest payable till 30lh June 2007 in terms of Award
passed by the Sole Arbitrator on 17th May 2008.
ii) Computation of Rovaltv as Minimum Guaranteed amount payable of AM
subsequent of the above mentioned Award is referred to Arbitration,
pending its determination, no provision is made in the accounts.
(iii) The Company is confident of settling the dispute and completing
the project.
Addition of Fixed Assets/ Projecls-in-progress includes, capitalization
of borrowing cost amounting to Rs. 1 1 7.04 crorcs (previons vear
Rs.70. 10 crores).
3) Contingent Liabilities not provided for:
a) Estimated amount of contracts remaining to be executed on capital
account Rs.210.68 crores (previous year Rs.223.20 crores).
b) Claims against the Company not acknowledged as debts Rs. 1 9.11
crores (previous year Rs. 1 1.73 crorcs).
c) Disputed Statutory Liabilities not provided lor Rs.1,32 crores
(previous year Rs.8.58 crorcs).
d) belter of Credit open and outstanding Rs. 14.91 crores (previons
year Rs.4.06 crores).
c) (Counter guarantee given to banks in respect of guarantees given by
them on behalf of the Company Rs.0.92 crores (previons year Rs. 1 .24
crores)
4 The Company has made provision for leave salary on actuarial
valuation basis. This being retirement benefit, an obligation to pay
this amount might arise at the lime of resignation / superannuation of
the employees. The breakup of the same is as under:
Nature of The Carrying Additional
Obligation amount at the provisions
beginning of made during
the period the year
Leave Salary 3.84 2.20
(Rs. in crores)
Amounts Unused amounts The carrying
incurred and reversed during amount at the
charged against the period end ol the period
the provision
during the period
0.36 0.20 3.28
5) In view of announcement made by the Institute of Chartered
Accountants of India, as a matter of prudence, the Company has provided
an additional amount of Rs.0.30 crores in the profit and loss account
(previous year Rs.7.85 crores) towards probable losses in respect of
outstanding derivative contracts .
6) The method of computation adopted by the Company relating to the
interest claims from HUDCO was upheld by The Execution Court, Delhi.
The appeal filed by HUDCO contesting the same before the Divisional
Bench of Delhi High Court is pending. The Company has during the year
under review recognised interest income of Rs.41.16 crores (previous
year Rs.46.15 crores) from HUDCO. The disputed interest recognised by
the Company till 31st March 2009 amounted to Rs.151.46 crores.
(Previous year Rs. 110.30 crores).
7) The special leave petition filed by the Company before the Supreme
Court of India against the judgment of the Bombay High Court setting
aside the Award passed by the Sole Arbitrator in favour of the Company
in respect of the Royalty payable to the Airport Authority of India
under the lease for 18000 sq. mtrs has been admitted. Based on the
expert advice, the Company is confident of succeeding in the matter and
no provision is made for the disputed royalty amounting to Rs.30.5f
crores and interest thereon.
8) Land and Buildings includes land measuring 4.1330 hectares and
building known as Kovalam Palace and other structures. The possession
of the Palace Building is presently with the Government of Kerala. The
Government of Kerala has passed an enactment called The Kovalam Palace
(Taking Over by Resumption) Act, 2005. The legality of the said Act is
challenged by the Company before the Kerala High Court, which is
pending disposal. No provision has been made in the accounts, for the
value of such land and building as the same is not separately
ascertainable and also as per the Acl, the Company is entitled to get
compensation for improvements based on the report of Commissioner
specially to be appointed for this purpose.
9) Sales and Services are stated net of discount and commission
amounting to Rs. 17.82 crores (previous years Rs.21.83 crores).
10) In terms of the option given in the Ministry of Corporate Affairs
Notification No G.S.R.225 (E) dated 31sl March 2009, differences
arising on reporting of long term foreign currency monetary items at
rates different from those at which they were initially recorded during
the period have been accounted as under:
(a) Rs.22.74 crores exchange gain recognised during the financial year
ending 31st March 2008 is debited to general reserve account and
credited to respective fixed asset account.
(b) Rs. 177.36 crores of exchange variations of the year under review
relating to depreciable assets are debited to respective fixed assets/
Projects-in-progress account.
(c) Rs.l 15.91 crores of the exchange variations of the year under
review relating to items other than non depreciable assets are debited
to Foreign Currency Monetary Item Translation Difference Account and
Rs.l1.20 crores of the exchange variation for the Financial Year
2007-08 relating to items other than non depreciable assets are
credited to Foreign Currency Monetary Rem Translation Difference
Account. Out of the net debit balance of Rs.104.71 crores as on 31
March 2009, Rs.10.47 crores have been amortised during the year under
review and the balance amount will be amortised before 31st March 2011.
11) The Company adopted Accounting Standard 15 Employee Benefits
(AS-15) effective from April 1, 2007. Consequent upon the change in
accounting policy and in accordance with the transitional provisions of
the Accounting Standard, an amount of Rs.Nil (Previous Year Rs.l.74
crores) towards additional provisions till 1st April 2007 (net of
deterred lax) was adjusted against General Reserve.
Retirement benefit plans:
a) Defined contribution plans
The Company makes Provident Fund contribution to defined contribution
retirement benefit plans for eligible employees. Under the schemes, the
Company is required to contribute a specified percentage of the payroll
costs to fund the benefits. The Company recognised Rs.2.88 crores
(previous year Rs.2.44 crores) for provident fund contributions in the
profit and loss account. The contributions payable to these plans by
the Company are at rates specified in the rules of the respective
scheme.
b) Defined benefit plans
The Company makes annual contributions to the Employees Group
Gratuity-cum-Life Assurance Scheme of the Life Insurance Corporation of
India, a funded defined benefit plan lor eligible employees. The scheme
provides for lump sum payment to eligible employees at retirement,
death while in employment or on termination of employment, an amount
equivalent to 15 days salary payable for each completed year of service
or part thereof in excess of six months. Eligibility occurs upon
completion of five years of service.
The present value of the defined benefit obligation and current service
cost were measured using the Projected Unit Credit Method, with
actuarial valuations being carried out at each balance sheet date.
12) Amalgamation of Kovalam Hotels Limited:
Kovalam Hotls Limited (KHL), a subsidiary of the Company, has been
amalgamated with the Company as per the Scheme of Arrangement
sanctioned by the Honourable High Court of Judicature of Mumbai
The remuneration disclosed above excludes fees of Rs.0.01 crores
(previous year Rs. Nil) for other professional services rendered by
firm of accountants in which some partners of the firm of statutory
auditors are partners.
13) The equity shares allotted on exercise of option to convert FCCBs
would rank pari passu with the existing shareholders and consequently
will be eligible to all rights and entitlements prospectively.
Accordingly the proposed Dividend, recommended by the Directors and
provided for, stands enhanced in favour of conversion effected since
the close of the year to date, if any. However, as the Company is
unable to estimate further conversion up to the record date set for
determining the said liability i.e. (beginning of the conversion
closure period), any further amounts required to be distributed as
Dividend will be adjusted against the balance in the profit and loss
account carried forward to the subsequent financial year.
14) Managerial Remuneration Rs.6.39 crores (previous year Rs.7.76
crores) includes Rs.3.10 crores (previous year Rs.5.40 crores) being
commission payable to Managing and Joint Managing Director and Non
Executive Directors.
15) Cash at Bank in current account includes Rs 14.46 crores (Previous
Year Rs Nil) with Barclays Bank, Maximum amount held in that account
during the year under review was Rs 108.80 crores (Previous Year Nil).
16) Segment Information:
The Companys only business is hoteliering and hence disclosure of
segment-wise information is not applicable under Accounting Standard 17
- Segment Refarting (AS-17). There is no geographical segment to be
reported.
17) Earnings Per Share (EPS):
Earnings per share is calculated in accordance with Accounting Standard
20 - Earnings per share (AS- 20) issued by the ICAI
18) Previous year figures have been regrouped and re-arranged wherever
necessary. |
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| Source : Religare Technova | |
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