Notes to Accounts of U P Hotels Ltd.

Mar 31, 2025

2.6 Provisions, contingent liabilities and contingent assets

Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event and it is
probable that an outflow of resources, that can be reliably estimated, will be required to settle such an obligation.

If the effect of the time value of money is material, provisions are determined by discounting the expected future cash flows to net
present value using an appropriate pre-tax discount rate that reflects current market assessments of the time value of money and,
where appropriate, the risks specific to the liability Unwinding of the discount is recognised in the Statement of Profit and Loss as
a finance cost. Provisions are reviewed at each reporting date and are adjusted to reflect the current best estimate.

A present obligation that arises from past events where it is either not probable that an outflow of resources will be required to settle
or a reliable estimate of the amount cannot be made, is disclosed as a contingent liability. Contingent liabilities are also disclosed
when there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence or non
-occurrence of one or more uncertain future events not wholly within the control of the Company.

Claims against the Company where the possibility of any outflow of resources in settlement is remote, are not disclosed as
contingent liabilities

Contingent assets are not recognised in financial statements since this may result in the recognition of income that may never
be realised. However, when the realisation of income is virtually certain, then the related asset is not a contingent asset and is
recognised

2.7 Earning per share

Basic earning per share is calculated by dividing the net profit or loss for the year attributable to the equity shareholders (after
deducting preference dividends and attributable taxes) by the weighted average number of equity shares outstanding during the
year

For the purpose of calculating the diluted earnings per share, the net profit or loss for the period attributable to equity shareholders
and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity
shares. The dilutive potential equity shares are deemed converted as at beginning of the period, unless they have been issued at
a later date.

2.8 Employee benefits
Defined contribution plans -

Company''s contribution paid / payable during the year to Provident Fund & Employees State Insurance are recognized in the
Statement of Profit & Loss. Provident Fund & Employees State Insurance contributions are made to a government administered
Provident Fund & Employees State Insurance Corporation towards which the company has no further obligation beyond its monthly
contribution. The contributions are recognized as employee benefit expenses when they are due.

Defined benefit plans -
Gratuity

For Agra, Jaipur and Lucknow units, the Company makes annual contributions to gratuity funds administered by the trustees for
amounts notified by the funds. However, for Khajuraho unit, gratuity is unfunded. The Gratuity plan provides for lump sum payment
to vested employees on retirement death or termination of employment of an amount based on the respective employee''s last
drawn salary and tenure of employment. The Company accounts for the net present value of its obligations for gratuity benefits,
based on an independent actuarial valuation, determined on the basis of the projected unit credit method, carried out as at the
Balance Sheet date. The obligation determined as aforesaid less the fair value of the plan assets is reported as a liability or assets
as of the reporting date. Actuarial gains and losses are recognised immediately in the Other Comprehensive Income and reflected
in retained earnings and will not be reclassified to the Statement of Profit and Loss.

Leave Encashment

The liability of accumulating compensated absences is determined by actuarial valuation performed by an independent actuary at
each balance sheet date using projected unit credit method.

3.0 Cash and cash equivalents

Cash and cash equivalents in the Balance Sheet comprise cash at bank and in hand and short-term deposits with banks that are
readily convertible into cash which are subject to insignificant risk of changes in value and are held for the purpose of meeting
short-term cash commitments.

- Some employees have filed claims in various courts/ legal forums against suspension/terminabon etc. and have sought
relief. The ultimate liability, if any. with respect to these claims, is currently not ascertainable and in the opinion of the
management, would not have material effect on the financial statements.

- The company had a property in Agra i .e property no. 53Aat Taj Road, adjacent to the present hotel property. The lease term
of property no. 53A (land area 1.79 acres) expired on 15.05 2021 The company never came in physical possession of this
property even after its purchase and it is physically occupied by the Army for which the company was -getting minor rent of
Rs. 131/- per month. Even that minor rent was stopped after the lease period of 90 years expired. After that, the company
got notice from Union of India-Defense Estate Officers (''DEO'') claiming damages of (Rs. 118.09 lakhs) from the company.
As the company was neither getting any financial benefit from this property nor lease was being extended and the property
was unproductive, during the financial year, the company protested the claim of damages and offered to surrender the lease
and property to DEO. The approval was pending from the Office of the DEO. Such demand notices were issued by DEO
to several other persons/entities against which such persons/entibes filed Writ Petitions in the High Court of Judicature at
Allahabad. The High Court has quashed the demand notices issued by DEO vide its order dated 15.05.2025.

- Due to Minimum Public Shareholding (‘MPS’) non-compliance, BSE Limited has levied fine of Rs. 31.15 lakhs (including
GST) for the year ended 31 03.2024 and Rs 43.07 lakhs (including GST) for the current financial year, on the company
During the year, SEBI granted certain relaxations including relaxation from the requirement of compliance of MPS Norms
for the specific purpose of seeking voluntary delisting of equity shares of the company. The company has requested BSE
Limited for waiving off above fine in view of above said communication of SEBI.

27 Debit and credit balances of parties in the financial statements are unconfirmed.

28 In the opinion of the Board, the assets of the Company, except stated otherwise, have a value on realization in the ordinary course

of business at least equal to the amount at which they are stated. All known liabilities are accounted for and all contingent liabilities
are stated

39.1 The Company had taken corporate steps for compliance with Minimum Public Shareholding (“MPS”) requirement, by passing
a board resolution dated 27.05.2013 and shareholders resolution dated 23.07.2013 for issuance of Bonus Shares to the public
shareholders. After the Extra-ordinary General meeting held on 23.07.2013, the bonus shares could not be issued to the public
shareholders as 62.5% of promoter shareholders did not relinquish their right to Bonus shares and thus could not maintain/comply
with the MPS requirement. The said board resolution and the shareholders'' resolution are also subject to status quo order dated
20.03.2013 in a civil suit filed before a Civil Court at Lucknow bearing Regular Suit No. 1574 of 2012, titled Birendra Kumar & Ors,
Vs. Sushil Kumar & Ors.fCivil Suit”). The said Civil Suit is filed by three members of the promoter group family against other family
members wherein the Company is also a party to the same. The suit is presently pending adjudication.

39.2 Due to MPS non-compliance, Securities & Exchange Board of India (SEBI) vide its orders dated 04 06.2013 and 02.12.2014 has
inter alia directed freezing of voting rights and corporate benefits with respect to excess of proportionate promoter/promoter group
shareholding and issued other directions against the promoter shareholders and directors. To comply with the MPS norm, the
company initiated voluntary delisting process in year 2022. However, delisting was unsuccessful. The Company had again applied
to SEBI for allowing the company to go for voluntary delisting process. SEBI vide its letter dated 03.12.2024 allowed the company
for voluntary delisting. The company is in the process of initiating voluntary delisting

40 Both the Joint Managing Directors had raised concerns regarding working of hotels, certain/various aspects of management. One
of the Joint Managing Directors filed a petition on 15.05.2015 before the Company Law Board (now the National Company Law
Tribunal), New Delhi titled as Rupak Gupta & Anr. Vs. UPHL & Ors. against the Company and others under Sections 397/398,
402, 403 and 237 of the Companies Act, 1956 and Section 219 & Section 220 of the Companies Act, 2013 for oppression and
mismanagement. The other Joint Managing Director has filed a reply to the petition on 09.05.2016 on behalf of the respondents -
himself and has contested the Petition and denied all the allegations. The Petition is currently pending adjudication A Management
Representation has been given to the Auditors in this matter.

41 The company is yet to comply with the followings:

a) The Company is yet to comply with Regulation 38 of SEBI (Listing Obligations and Disclosures Requirements) Regulations,
2015 with regard to Minimum Public Shareholding (MPS).

b) The Company is yet to achieve 100 percent dematerialization of the promoters'' shareholding as required under Regulation
31(2) of SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015. Due to non-compliance of Minimum
Public Shareholding under Regulation 38 of SEBI LODR Regulations 2015, SEBI vide its Order dated 04 06.2013 and
02 12 2014 has prohibited dealing in the shares of the company by the promoters & promoter group of the company. BSE
Limited pursuant to SEBI Circular dated 17.10.2017. had issued directions to respective Depository Participants to freeze the
De-mat accounts of promoters of U. P Hotels Limited and accordingly, the De-mat accounts of all the promoters & Promoter
Groups of the company have been frozen in the month of September 2023

c) Some of the Related Party Transactions (“RPT") entered into by the company during the previous years and which are
continuing in the current financial year could not be approved by the Audit Committee and Board of Directors, being part of a
legal matter pending before the Hon''ble National Company Law Tribunal (NCLT) for adjudication. The Board of directors in its
meeting on 20 08.2017 decided to defer the matter of RPTs till the final decision of the NCLT These RPTs are not entered in
the Register maintained under Section 189 of the Companies Act, 2013 As such, the Company is yet to comply with sections
188 and 189 of the Act and Regulation 23 of SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015.

42 No funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of
funds) by the Company to or in any other person(s) or entity(ies), including foreign entities (“Intermediaries”) with the understanding,
whether recorded in writing or otherwise, that the Intermediary shall lend or invest in party identified by or on behalf of the Company
(Ultimate Beneficiaries). The Company has not received any fund from any party(s) (Funding Party) with the understanding that the
Company shall whether, directly or indirectly lend or invest in other persons or entities identified by or on behalf of the Company
(“Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

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Mar 31, 2024

(iii) The Company''s Authorised Capital comprises of two class of shares. The Equity shares have a par value of Rs. 10 each and Preference Shares have a par value of Rs. 100 each.

(iv) The Company has at present one class of shares i.e, Equity Shares. Each shareholder is eligible to one vote per share held and is entitles to dividend on approval by shareholders. The Company declares and pays dividend in Indian Rupees. In the event of liquidation, the holders of equity shares will be entitled to receive remaining assets of the company after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholder.

(v) During the last 5 years immediately preeceding the balance sheet date, no equity shares has been issed pursuant to any contract without payment being received in cash. Further the company has neither allotted any shares by way of bonus shares, nor it has bought back any shares during the aforesaid period of 5 years.

(vi) No shares have been forfeited by the company during the year.

- Some employees have filed claims in various courts/legal forums against suspension/termination etc. and have sought reliefs. The ultimate liability, if any, with respect to these claims is currently not ascertainable and in the opinion of management, would not have material effect on the financial statements.

- Pending assessments/cases of Luxury Tax, Value Added Tax, Employees State Insurance and Provident Fund (in respect of contractual/casual workers), Service Tax, House & Water Tax etc., further liability, if any, is unascertained and will be provided on the finalization of assessments/ cases.

- The company had a property in Agra i.e. property no. 53A at Taj Road, adjacent to the present hotel property. The lease term of property no. 53A (land area 1.79 acres) has expired on 15.05.2021. The company never came in physical possession of this property even after its purchase and it is physically occupied by Army for which the company was getting minor rent of Rs. 131/- per month. Even that minor rent was stopped after the lease period of 90 years got expired. After that, the company got notice from Union of India-DEO claiming damages of Rs. 1,18,08,761/- from the company. As the company was neither getting any financial benefit from this property nor lease was being extended and the property was unproductive, during the financial year, the company protested the claim of damages and offered to surrender the lease and property to Union of India-DEO. The approval is pending from the Office of the DEO.

- Due to MPS non-compliance, BSE Limited, during the year, imposed fine of Rs. 9,55,800/- (including GST) till the period ending 30th September 2023 and further fine of Rs. 10,85,600/- (including GST) for quarter ending 31st December 2023.

Further notice for fine of Rs. 10,73,800/- (including GST) for quarter ending 31st March 2023 is received after the date of balance sheet. The company has intimated BSE that it has applied to SEBI for Voluntary delisting and waiver of fine due to MPS non-compliance and requested BSE to keep the fine in abeyance till the matter is finalized by SEBI. b. Commitments:

Estimated amount of contracts remaining to be executed on capital account and not provided for (as certified by the Management) Rs. NIL (2023 - Rs.1.87 lakh).

27 Debit and credit balances of parties in the financial statements are unconfirmed.

28 In the opinion of the Board, the assets of the Company, except stated otherwise, have a value on realization in the ordinary course of business at least equal to the amount at which they are stated. All known liabilities are accounted for and all contingent liabilities are stated.

39.1 The Company had taken corporate steps for compliance with Minimum Public Shareholding (“MPS”) requirement, by passing a board resolution dated 27.05.2013 and shareholders'' resolution dated 23.07.2013 for issuance of Bonus Shares to the public shareholders. After the Extra-ordinary General meeting held on 23.07.2013, the bonus shares could not be issued to the public shareholders as 62.5% of promoter shareholders did not relinquish their right to Bonus shares and thus could not maintain/comply with the MPS requirement. The said board resolution and the shareholders'' resolution are also subject to status quo order dated 20.03.2013 in a civil suit filed before a Civil Court at Lucknow bearing Regular Suit No. 1574 of 2012, titled Birendra Kumar & Ors. Vs. Sushil Kumar & Ors.(“Civil Suit”). The said Civil Suit is filed by three members of the promoter group family against other family members wherein the Company is also a party to the same. The suit is presently pending adjudication.

39.2 Due to MPS non-compliance, Securities & Exchange Board of India (SEBI) vide its orders dated 04.06.2013 and 02.12.2014 has inter alia directed freezing of voting rights and corporate benefits with respect to excess of proportionate promoter/promoter group shareholding and issued other directions against the promoter shareholders and directors. To comply with the MPS norm, the company initiated voluntary delisting process in year 2022. However, delisting was unsuccessful. The Company has again applied to SEBI for allowing the company to go for voluntary delisting process. The decision of SEBI is awaited.

40 Both the Joint Managing Directors had raised concerns regarding working of hotels, certain/various aspects of management. One of the Joint Managing Directors filed a petition on 15.05.2015 before the Company Law Board (now the National Company Law Tribunal), New Delhi titled as Rupak Gupta & Anr. Vs. UPHL & Ors. against the Company and others under Sections 397/398, 402, 403 and 237 of the Companies Act, 1956 and Section 219 & Section 220 of the Companies Act, 2013 for oppression and mismanagement. The other Joint Managing Director has filed a reply to the petition on 09.05.2016 on behalf of the respondents -himself and has contested the Petition and denied all the allegations. The Petition is currently pending adjudication. A Management Representation has been given to the Auditors in this matter.

41 The company is yet to comply with the followings:

a) The Company is yet to comply with Regulation 38 of SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015 with regard to Minimum Public Shareholding (MPS).

b) The Company is yet to achieve 100 percent dematerialization of the promoters'' shareholding as required under Regulation 31(2) of SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015. The members of the Promoters/ Promoters Group are in the process of de-mating their shares.

c) Some of the Related Party Transactions (“RPT”) entered into by the company during the previous years and which are continuing in the current financial year could not be approved by the Audit Committee and Board of Directors, being part of a legal matter pending before the Hon''ble National Company Law Tribunal (NCLT) for adjudication. The Board of directors in its meeting on 20.08.2017 decided to defer the matter of RPTs till the final decision of the NCLT. These RPTs are not entered in the Register maintained under Section 189 of the Companies Act, 2013. As such, the Company is yet to comply with sections 188 and 189 of the Act and Regulation 23 of SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015

42 No funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign entities (“Intermediaries”) with the understanding, whether recorded in writing or otherwise, that the Intermediary shall lend or invest in party identified by or on behalf of the Company (Ultimate Beneficiaries). The Company has not received any fund from any party(s) (Funding Party) with the understanding that the Company shall whether, directly or indirectly lend or invest in other persons or entities identified by or on behalf of the Company (“Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

43. Amounts are given in lakhs except stated otherwise. Previous year''s figures have been regrouped / reclassified wherever necessary to conform to this year''s classification.

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Mar 31, 2023

2.6 Provisions, contingent liabilities and contingent assets

Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event and it is probable that an outflow of resources, that can be reliably estimated, will be required to settle such an obligation.

If the effect of the time value of money is material, provisions are determined by discounting the expected future cash flows to net present value using an appropriate pre-tax discount rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability. Unwinding of the discount is recognised in the Statement of Profit and Loss as a finance cost. Provisions are reviewed at each reporting date and are adjusted to reflect the current best estimate.

A present obligation that arises from past events where it is either not probable that an outflow of resources will be required to settle or a reliable estimate of the amount cannot be made, is disclosed as a contingent liability. Contingent liabilities are also disclosed when there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence or non -occurrence of one or more uncertain future events not wholly within the control of the Company.

Claims against the Company where the possibility of any outflow of resources in settlement is remote, are not disclosed as contingent liabilities.

Contingent assets are not recognised in financial statements since this may result in the recognition of income that may never be realised. However, when the realisation of income is virtually certain, then the related asset is not a contingent asset and is recognised.

2.7 Earning per share

Basic earning per share is calculated by dividing the net profit or loss for the year attributable to the equity shareholders (after deducting preference dividends and attributable taxes) by the weighted average number of equity shares outstanding during the year.

For the purpose of calculating the diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares. The dilutive potential equity shares are deemed converted as at beginning of the period, unless they have been issued at a later date.

2.8 Employee benefits Defined contribution plans -

Company’s contribution paid / payable during the year to Provident Fund & Employees State Insurance are recognized in the Statement of Profit & Loss. Provident Fund & Employees State Insurance contributions are made to a government administered

Provident Fund & Employees State Insurance Corporation towards which the company has no further obligation beyond its monthly contribution. The contributions are recognized as employee benefit expenses when they are due.

Defined benefit plans -

Gratuity

The Company makes annual contributions to gratuity funds administered by the trustees for amounts notified by the funds. The Gratuity plan provides for lump sum payment to vested employeeson retirement, death or termination ofemployment ofan amount based on the respective employee’s last drawn salary and tenure of employment. The Company accounts for the net present value of its obligations for gratuity benefits, based on an independent actuarial valuation, determined on the basis of the projected unit credit method, carried out as at the Balance Sheet date. The obligation determined as aforesaid less the fair value of the plan assets is reported as a liability or assets as of the reporting date. Actuarial gains and losses are recognised immediately in the Other Comprehensive Income and reflected in retained earnings and will not be reclassified to the Statement of Profit and Loss.

Leave Encashment

The liability of accumulating compensated absences is determined by actuarial valuation performed by an independent actuary at each balance sheet date using projected unit credit method.

3.0 Cash and cash equivalents

Cash and cash equivalents in the Balance Sheet comprise cash at bank and in hand and short-term deposits with banks that are readily convertible into cash which are subject to insignificant risk of changes in value and are held for the purpose of meeting short-term cash commitments.

39.1 The Company had taken corporate steps for compliance with Minimum Public Shareholding (“MPS") requirement, by passing a board resolution dated 27.05.2013 and shareholders’ resolution dated 23.07.2013 for issuance of Bonus Shares to the public shareholders. After the Extra-ordinary General meeting held on 23.07.2013, the bonus shares could not be issued to the public shareholders as 62.5% of promoter shareholders did not relinquish their right to Bonus shares and thus could not maintain/comply with the MPS requirement. The said board resolution and the shareholders’ resolution are also subject to status quo order dated 20.03.2013 in a civil suit filed before a Civil Court at Lucknow bearing Regular Suit No. 1574 of 2012, titled Birendra Kumar & Ors. Vs. Sushil Kumar & Ors.fCivil Suit”). The said Civil Suit is filed by three members of the promoter group family against other family members wherein the Company is also a party to the same. The suit is presently pending adjudication.

39.2 Due to MPS non-compliance, Securities & Exchange Board of India (SEBI) vide its orders dated 04.06.2013 and 02.12.2014 has inter alia directed freezing of voting rights and corporate benefits with respect to excess of proportionate promoter/promoter group shareholding and issued other directions against the promoter shareholders and directors. To comply with the MPS norm, the company initiated voluntary delisting process. However, delisting was unsuccessful.

40 Both the Joint Managing Directors had raised concerns regarding working of hotels, certain/various aspects of management. One of the Joint Managing Directors filed a petition on 15.05.2015 before the Company Law Board (now the National Company Law Tribunal), New Delhi titled as Rupak Gupta & Anr. Vs. UPHL & Ors. against the Company and others under Sections 397/398, 402, 403 and 237 of the Companies Act, 1956 and Section 219 & Section 220 of the Companies Act, 2013 for oppression and mismanagement. The other Joint Managing Director has filed a reply to the petition on 09.05.2016 on behalf of the respondents -himself and has contested the Petition and denied all the allegations. The Petition is currently pending adjudication. A Management Representation has been given to the Auditors in this matter.

41 The company is yet to comply with the followings:

a) The Company is yet to comply with Regulation 38 of SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015 with regard to Minimum Public Shareholding (MPS).

b) The Company is yet to achieve 100 percent dematerialization of the promoters’ shareholding as required under Regulation 31(2) of SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015. The members of the Promoters/Promoters Group are in the process of de-mating their shares.

c) Some of the Related Party Transactions (“RPT”) entered into by the company during the previous years and which are continuing in the current financial year could not be approved by the Audit Committee and Board of Directors, being part of a legal matter pending before the Hon’ble National Company Law Tribunal (NCLT) for adjudication. The Board of directors in its meeting on 20.08.2017 decided to defer the matter of RPTs till the final decision of the NCLT. These RPTs are not entered in the Register

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Mar 31, 2013

1. Contingent liabilities and commitments (to the extent not provided)

A. Contingent liabilities to the extent, not provided for :

(i) Contingent liabilities not provided for in respect of:

a) Claims against the Company not acknowledged as debts and not provided for pending appellate /Judicial decisions:

Income Tax Rs.5,236,372 (2012-Rs. Nil )

Value Added Tax Rs.2,972,203 (2012 - Rs.6,909,904 )

Other Claims Rs.1,627,011 (2012-Rs.2,181,321 )

No provision has been made as the probability of the claim succeeding is remote.

b) The Income Tax Department has appealed to the Hon''ble High Court, Allahabad against the order of the Income Tax Appellate Tribunal upholding the views of the Company in respect of the claim of deduction regarding earnings in convertible foreign exchange under Section 80 HHD for Assessment Years 1989-90 to 1991-92. The total amount disputed (excluding interest and penalties) in the matter aggregates to Rs.5,859,000 (2012- Rs.5,859,000). The Company, based on expert analysis, is hopeful of a favourable decision from the Hon''ble High Court, Allahabad.

c) A stay has been granted by the Hon''ble Allahabad High Court as regards applicability of the notification under section 3 of the U P Industrial Disputes Act, 1947 regarding minimum wages applicable to hotels in U.P. Liability, if any, is unascertained.

d) A stay has been granted by Hon''ble High Court of Allahabad , Lucknow Bench in the matter of applicability of Provident Fund during infancy period. Liability, if any, is unascertained.

e) Certain employees have filed claims in various courts / legal forums against suspension/ termination etc. and have sought reliefs. The ultimate liability, if any, with respect to these claims is currently not ascertainable and in the opinion of management, would not have material effect on the financial statements.

B. Commitments:

Estimated amount of contracts remaining to be executed on capital account and not provided for (as certified by the Management) Rs.13,059,275 (2012 - Rs.6,586,762).

2. Balance confirmations have not been received from most of the parties showing debit/credit balances.

3. In the opinion of the Board, the assets of the Company other than the fixed assets have a value on realization in the ordinary course of business at least equal to the amount at which they are stated. All known liabilities are accounted for and all contingent liabilities are stated.

3.1 The Company does not use derivative financial instruments such as forward exchange contracts and interest rates swaps to hedge its risks associated with foreign currency fluctuations and interest rate or for trading/speculation purposes.

4. During the year the Company has changed the basis of arriving cost from weighted average cost to FIFO basis at one of its location Clarks Avadh, due to change in software. The effect of such a change on the statement of Profit & Loss would not be material.

5. The company has not received from parties any information /memorandum (as required to be filed by suppliers / vendors with notified authority under Micro, Small & Medium Enterprises Act, 2009) claiming their status as Micro, Small or Medium Enterprises. As such, the company does not owe any dues on account of principal amount together with interest and accordingly no additional disclosures are made. This has been relied upon by the auditors.

6. Pending assessments of Luxury Tax, Value Added Tax, Employees State Insurance, Provident Fund, Service Tax, House & Water Tax etc., further liability, if any, could not be ascertained and provided for in accounts.

7. The Company has unutilised Cash Credit Limit of Rs.16,000,000 (2012 - Rs.16,000,000) from Allahabad Bank which is secured by hypothecation of present and future movable assets i.e. stock of provisions, wines, crockery, linen and other stores and also present and future book debts of the Company''s hotels and is additionally secured by mortgage of the Company''s hotels at Agra & Jaipur aggregating to Rs.67,800,000 (2012 - Rs.67,800,000).

8. No amount is paid / payable by the Company under Section 441A of the Companies Act, 1956 (cess on turnover) since rules specifying the manner in which the cess shall be paid has not been notified yet by Central Government.

9.1 Depreciation has been provided in the accounts on "Straight Line Method" at rates prescribed in Schedule XIV to the Companies Act, 1956 except for specific assets stated below where different rates are applied which are not less than those prescribed under the Companies Act, 1956 :

i) Leasehold land is amortised over a period of 30 years. Leasehold land acquired on 99 years basis is not amortised.

ii) Intangible assets viz. Trade Marks and Computer Software are being amortised over a period of sixty months.

9.2 Since depreciation has been calculated on the revalued cost, the difference of depreciation on original cost and the revalued figure amounting to Rs.1,024,668 (2012 - Rs.1,024,668) has been withdrawn from revaluation reserve and deducted from depreciation for the year.

10. Disclosures in respect of company''s operating lease arrangements entered on or after 1st April 2001 under Accounting Standard (AS-19) on leases.

a) The Company has entered into operating Lease arrangement for office premises, transit facility and residential premises of employees/directors. Some of the significant terms and conditions of the arrangements are:

- The lease agreements are not non-cancellable in nature and may be terminated by either party by serving a notice

- lease arrangements which are not non-cancellable are generally renewable by mutual consent on mutually agreeable terms

b) The company has given shops on licence basis which are not non cancellable and can be terminated by either party by serving a notice

c) Rent in respect of above is charged/ credited to the statement of profit and loss.

11. The company''s only business being hoteliering, disclosure of segment-wise information is not applicable under Accounting Standard 17 - ''Segmental Information'' (AS 17) notified by the Companies (Accounting Standards) Rules, 2006 (as amended). There is no geographical segment to be reported since all the operations are undertaken in India.

12. Details of transactions entered into with related parties during the year A) Related parties and their relationship

i) Subsidiary Companies - Nil ii) Key Management Personnel :- a) Directors

Shri Birendra Kumar ( Chairman & Managing Director)

Shri Apurv Kumar (Joint Managing Director)

Shri Rupak Gupta (Joint Managing Director)

Smt. Supriya Gupta (Executive Director)

Shri Rakesh M Gupta

Shri Sushil Kumar

Shri Arvind Kumar

b) Relatives of Directors Shri Upendra Kumar Shri Manish Kumar Smt. Rajeshwari Kumar Smt. Renuka Kumar Shri Anoop Kumar Shri Binay Kumar Shri Ravi M Gupta Shri Vivek Kumar Shri Arjun Kumar Shri Akshay Gupta Shri Anant Kumar Smt. Aditi G Mittal

iii) Enterprise in which Key Management Personnel have significant influence: U.P. Hotels Clarks Limited U.P. Hotels India Limited Kalyani Holdings & Finance Limited The Indian Textiles Co. Private Limited Indian Textiles Company (Holdings) Private Limited Hotel Clarks Varanasi Limited Great Value Hotels Private Limited Carbon Paste Limited Banaras House Private Limited Bonita India Limited Banaras International Limited Banaras Global Private Limited Banaras House Engineering Private Limited U P Export Industries Limited ANK Travels Limited Silk Emporium Oriental Textiles Rastriya Vikas Limited Oriental Emporium Jaipur Shop Pride Hospitality Limited Clarks Brij Hotels (I) Limited

13. Employees Benefits

13.1 Defined Contribution Plans.

The Company makes contribution towards Provident Fund & Employees State Insurance for qualifying employees. The Provident Fund & Employees State Insurance is operated by Regional Provident Fund Commissioner and Director, Employees State Insurance Corporation respectively. The Company is required to contribute a specified percentage of payroll cost to the retirement benefit schemes to fund the benefits. The only obligation of the Company with respect to their retirement benefit plan is to make specified contribution at specified rates. A sum of Rs.11,542,998 (2012 - Rs.11,146,644) on account of Provident Fund has been debited to contribution to provident and other funds. Employees State Insurance contribution Rs.2,887,461 (2012 - Rs.2,689,017) has been debited to staff welfare expenses.

13.2 Defined Benefit Plan

Gratuity

The Company''s scheme of gratuity provide for lump sum payment to vested employees on departure, of an amount equal to 15 days salary (last drawn) for each completed year of service. Vesting occurs on completion of five years service. The Company makes annual contribution to Employees Group Gratuity cum Life Insurance Scheme of Life Insurance Corporation of India (funded) at all units except Khajuraho. The funds are further invested by Life Insurance Corporation of India. The actuarial valuation at all units was carried out as at 31st March, 2013 by Actuaries under the Projected Unit Credit Method. Provisions were made to bring the gratuity liability in line with the actuarial valuation.

14. The Company has not made any remittances in foreign currencies on account of dividends during the year and does not have information to the extent to which remittances in foreign currencies on account of dividend have been made by or on behalf of non resident shareholders.

15. The remuneration to whole-time directors was paid in terms of shareholders'' approval dated 28th August, 2010. In view of inadequacy of profits for the year 2012-1 3, the remuneration paid / provided to whole-time director, which is in excess by Rs.4,787,223 of the limits prescribed under section 309 (3) and Section 198 read with Schedule XIII of the Companies Act, 1956 which is subject to approval of the Central Government. The Company is seeking approval of Central Government for waiver of recovery of such excess remuneration. Pending approval of the Central Government an amount of Rs.4,787,223 being excess remuneration for the year is held in trust by the whole-time directors.

16. Inadvertently, there was a delay of one day in deposition of Rs.5,400,000 out of total sum of Rs.27,000,000 in a separate bank account as required by Sec. 205 (1A) of the Companies Act, 1956.

17. The Hon''ble Addl. Civil Judge (Sr. Division) Lucknow passed an interim order dated 20th March,2013 in the matter of civil suit filed by some promoters against most of promoters (including the company) not to undertake any such measures which may affect the shareholding pattern inter-se amongst promoters. The company has applied to the Civil Court Lucknow (Sr. Division) to give permission to enable the Company to comply with Clause 40A of the listing agreement and as such the company is yet to comply with the letter received from SEBI as regards Clause 40A. The Company''s delisting proposal also stands withdrawn.

18. Previous year''s figures have been regrouped/ reclassified wherever necessary to confirm to this year''s classification.

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Mar 31, 2012

1.1 The Company's Authorised Capital comprises of two class of shares. The Equity shares have a par value of Rs. 10 each and Preference shares have a par value of Rs. 100 each.

1.2 The Company has at present one class of shares i.e. equity shares. Each shareholder is eligible to one vote per share held and is entitled to dividend as proposed by Board of Directors subject to the approval of shareholders in the ensuing Annual General Meeting. The Company declares and pays dividend in Indian Rupees. In the event of liquidation , the holders of equity shares will be entitlted to receive remaining assets of the Company after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

The secured loans from Allahabad Bank and State Bank of India are secured against the fixed deposits. The loans are repayable on demand and carry interest at floating rate linked to the base rate of respective banks.

2. Contingent liabilities and commitments (to the extent not provided)

A. Contingent liabilities to the extent not provided for :

(i) Contingent liabilities not provided for in respect of:

a) Claims against the Company not acknowledged as debts and not provided for pending appellate /Judicial decisions:

VAT / Entry Tax Rs. 69,09,904 (2011 - Rs. 69,14,294 )

House Tax Rs. 21,81,321 (2011 - Rs. 21,81,321 )

No provision has been made as the probability of the claim succeeding is remote.

b) The Income Tax Department has appealed to the Hon'ble High Court, Allahabad against the order of the Income Tax Appellate Tribunal upholding the views of the Company in respect of the claim of deduction regarding earnings in convertible foreign exchange under Section 80 HHD for Assessment Years 1989-90 to 1991-92 and luxury tax claimed under Section 43B for Assessment Years 1987-88 to 1990-91. The total amount disputed (excluding interest and penalties) in the matter aggregates to Rs. 58,59,000 (2011- Rs. 58,59,000). The Company, based on expert analysis, is hopeful of a favourable decision from the Hon'ble High Court, Allahabad.

c) A stay has been granted by the Hon'ble Allahabad High Court as regards applicability of the notification under section 3 of the U P Industrial Disputes Act, 1947 regarding minimum wages applicable to hotels in U.P. Liability, if any, is unascertained.

d) A stay has been granted by Hon'ble High Court of Allahabad , Lucknow Bench in the matter of applicability of Provident Fund during infancy period. Liability, if any, is unascertained.

e) Certain employees have filed claims in various courts / legal forums against suspension/termination etc. and have sought reliefs. The ultimate liability, if any, with respect to these claims is currently not ascertainable and in the opinion of management, would not have material effect on the financial statements.

B. Commitments:

Estimated amount of contracts remaining to be executed on capital account and not provided for (as certified by the Management) Rs. 65,86,762 (2011 - Rs. 1,01,82,401).

3. Balance confirmations have not been received from most of the parties showing debit/credit balances.

4. In the opinion of the Board, the assets of the company other than the fixed assets have a value on realization in the ordinary course of business at least equal to the amount at which they are stated. All known liabilities are accounted for and all contingent liabilities are stated.

5.1 The Company does not use derivative financial instruments such as forward exchange contracts and interest rates swaps to hedge its risks associated with foreign currency fluctuations and interest rate or for trading/speculation purposes.

6. The Company has not received from majority of parties any information / memorandum (as required to be filed by Suppliers / Vendors with the notified authority under Micro, Small and Medium Enterprises Development Act, 2006), claiming their status as Micro, Small or Medium Enterprises.

7. Pending assessments of Luxury Tax, Value Added Tax, Employees State Insurance, Provident Fund, Service Tax, Expenditure Tax, House & Water Tax etc., further liability, if any, could not be ascertained and provided for in accounts.

8. The Company has unutilised Cash Credit Limit of Rs. 1,60,00,000 (2011 - Rs. 1,60,00,000) from Allahabad Bank which is secured by hypothecation of present and future movable assets i.e. stock of provisions, wines, crockery, linen and other stores and also present and future book debts of the Company's hotels and is additionally secured by mortgage of the Company's hotels at Agra & Jaipur aggregating to Rs. 6,78,00,000 (2011 - Rs. 6,78,00,000).

9. Fixed deposit of Rs. 3,75,78,223 (2011 - Rs. 4,05,99,760) & Rs. 1,00,00,000 ( 2011 - Rs. Nil) have been lodged with Allahabad Bank and State Bank of India for availing overdraft limit not exceeding Rs. 3,42,00,000 (2011 - Rs. 3,00,00,000) and Rs. 95,00,000 (2011- Rs. Nil) respectively.

10. No amount is paid / payable by the Company under Section 441A of the Companies Act, 1956 (cess on turnover) since rules specifying the manner in which the cess shall be paid has not been notified yet by Central Government.

11.1 Depreciation has been provided in the accounts on "Straight Line Method" at rates prescribed in Schedule XIV to the Companies Act, 1956 except for specific assets stated below where different rates are applied which are not less than those prescribed under the Companies Act, 1956 :

i) Leasehold land is amortised over a period of 30 years. Leasehold land acquired on 99 years basis is not amortised.

ii) Intangible assets viz. Trade Marks and Computer Software are being amortised over a period of sixty months.

11.2 Since depreciation has been calculated on the revalued cost, the difference of depreciation on original cost and the revalued figure amounting to Rs. 10,24,668 (2011 - Rs. 10,24,668) has been withdrawn from revaluation reserve and deducted from depreciation for the year.

12. Disclosures in respect of company's operating lease arrangements entered on or after 1st April 2001 under Accounting Standard (AS-19) on leases.

a) The Company has entered into operating Lease arrangement for office premises, transit facility and residential premises of employees/directors. Some of the significant terms and conditions of the arrangements are:

- The lease agreements are not non-cancellable in nature and may be terminated by either party by serving a notice

- lease arrangements which are not non-cancellable are generally renewable by mutual consent on mutually agreeable terms

b) The company has given shops on licence basis which are not non cancellable and can be terminated by either party by serving a notice

c) Rent in respect of above is charged/ credited to the statement of profit and loss.

13. The company's only business being hoteliering, disclosure of segment-wise information is not applicable under Accounting Standard 17 - 'Segmental Information' (AS 17) notified by the Companies (Accounting Standards) Rules, 2006 (as amended). There is no geographical segment to be reported since all the operations are undertaken in India.

14. Details of transactions entered into with related parties during the year A) Related parties and their relationship

i) Subsidiary Companies - Nil

ii) Key Management Personnel :-

a) Directors

Shri Birendra Kumar ( Chairman & Managing Director)

Shri Apurv Kumar (Joint Managing Director)

Shri Rupak Gupta (Joint Managing Director)

Smt. Supriya Gupta (Executive Director)

Shri Rakesh M Gupta

Shri Sushil Kumar

Shri Arvind Kumar

b) Relatives of Directors

Shri Upendra Kumar

Shri Manish Kumar

Smt. Rajeshwari Kumar

Smt. Renuka Kumar

Shri Anoop Kumar

Shri Binay Kumar

Shri Ravi M Gupta

Shri Vivek Kumar

Shri Arjun Kumar

Shri Akshay Gupta

Smt. Minakshi Gupta (Late)

Enterprise in which Key Management Personnel have significant influence:

U.P. Hotels Clarks Limited

U.P. Hotels India Limited

Kalyani Holdings and Finance Limited

The Indian Textiles Company Private Limited

Indian Textiles Company (Holdings) Private Limited

Hotel Clarks Varanasi Limited

Great Value Hotels Private Limited

Carbon Paste Limited

Banaras House Private Limited

Bonita India Limited

Banaras International Limited

Banaras Global Private Limited

Banaras House Engineering Private Limited

U P Export Industries Limited

ANK Travels Private Limited

Silk Emporium

Oriental Textiles

Rastriya Vikas Limited

Oriental Emporium

Jaipur Shop

Pride Hospitality Private Limited

Clarks Brij Hotels (I) Private Limited

15. Employees Benefits

15.1 Defined Contribution Plans.

The Company makes contribution towards Provident Fund & Employees State Insurance for qualifying employees. The Provident Fund & Employees State Insurance is operated by Regional Provident Fund Commissioner and Director, Employees State Insurance Corporation respectively. The Company is required to contribute a specified percentage of payroll cost to the retirement benefit schemes to fund the benefits. The only obligation of the Company with respect to their retirement benefit plan is to make specified contribution at specified rates. A sum of Rs. 1,11,46,644 ( 2011 - Rs. 1,02,39,939) on account of Provident Fund has been debited to contribution to provident and other funds. Employees State Insurance contribution Rs. 26,89,017 (2011 - Rs. 25,54 ,201 ) has been debited to staff welfare expenses.

15.2 Defined Benefit Plan Gratuity

The Company's scheme of gratuity provide for lump sum payment to vested employees on departure, of an amount equal to 15 days salary (last drawn) for each completed year of service. Vesting occurs on completion of five years service. The Company makes annual contribution to Employees Group Gratuity cum Life Insurance Scheme of Life Insurance Corporation of India (funded) at all units except Khajuraho. The funds are further invested by Life Insurance Corporation of India. The actuarial valuation at all units was carried out as at 31st March, 2012 by Actuaries under the Projected Unit Credit Method. Provisions were made to bring the gratuity liability in line with the actuarial valuation.

The estimates of future salary increase in actuarial valuations take account of inflations, seniority, promotion and other relevant factors such as supply and demand factors in employment market.

15.3 Gratuity expenses and leave encashment have been recognised under the head employees benefit expenses.

16. The Company has not made any remittances in foreign currencies on account of dividends during the year and does not have information to the extent to which remittances in foreign currencies on account of dividend have been made by or on behalf of non resident shareholders.

17. During the year ended 31st March, 2012 the Revised Schedule VI notified under the Companies Act, 1956, has become applicable for preparation and presentation of financial statements. The preparation of financial statements based on the Revised Schedule VI does not impact the recognition and measurement principles followed for preparation of the financial statements. However, it has significant impact on the presentation and disclosures made in the financial statements. The company has regrouped/reclassified the previous year figures in accordance with the requirements applicable in the current year.

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Mar 31, 2011

1. Estimated amount of contracts remaining to be executed on capital account and not provided for (as certified by the Management) Rs. 101.82 lacs (2010 – Rs. 55.41 lacs).

2. Contingent liabilities not provided for in respect of:

a) Claims against the Company not acknowledged as debts and not provided for pending appellate /Judicial decisions:

i) VAT / Entry Tax Rs. 69.14 lacs (2010 – Rs. 2.08 lacs)

ii) House Tax / Water Tax Rs. 28.12 lacs (2010 – Rs. 101.21 lacs)

No provision has been made as the probability of the claim succeeding is remote.

b) The Income Tax Department has appealed to the Hon'ble High Court, Allahabad against the order of the Income Tax Appellate Tribunal upholding the views of the Company in respect of the claim of deduction regarding earnings in convertible foreign exchange under Section 80 HHD for Assessment Years 1989-90 to 1991-92 and luxury tax claimed under Section 43B for Assessment Years 1987-88 to 1990-91. The total amount disputed (excluding interest and penalties) in the matter aggregates to Rs. 58.59 lacs (2010- Rs. 58.59 lacs). The Company , based on expert analysis, is hopeful of a favourable decision from the Hon'ble High Court, Allahabad.

c) A stay has been granted by the Hon'ble Allahabad High Court as regards applicability of the notification under section 3 of the U P Industrial Disputes Act, 1947 regarding minimum wages applicable to hotels in U.P.. Liability, if any, is unascertained.

d) A stay has been granted by Hon'ble High Court of Allahabad , Lucknow Bench in the matter of applicability of Provident Fund during infancy period. Liability, if any, is unascertained.

e) Certain employees have filed claims in various courts / legal forums against suspension/termination etc. and have sought reliefs. The ultimate liability, if any, with respect to these claims is currently not ascertainable and in the opinion of management, would not have material effect on the financial statements.

3.1 Balance confirmations have not been received from most of the parties showing debit/credit balances.

3.2 In the opinion of the Board, the value on realization of current assets, loans & advances in the ordinary course of business will not be less than the amount at which they are stated in the Balance Sheet.

3.3 Debts over six months (considered good) inter-alia include Rs. 2,608,792 in respect of which legal proceedings have been initiated against parties under section 138 of The Negotiable Instruments Act, 1881. The Company based on legal opinion is virtually certain of its recovery and accordingly no provision is required.mn respect of which legal

4. Margin Deposit of Rs. 100,000 (2010- Rs. 66,608) and Fixed Deposit of Rs. 145,240 (2010 – Rs. 140,000) have been made / lodged for obtaining guarantees in favour of Government Authorities.

5.2 The Company does not use derivative financial instruments such as forward exchange contracts and interest rates swaps to hedge its risks associated with foreign currency fluctuations and interest rate or for trading/speculation purposes.

6.1 The Company has not received from majority of parties any information / memorandum (as required to be filed by Suppliers / Vendors with the notified authority under Micro, Small and Medium Enterprises Development Act, 2006), claiming their status as Micro, Small or Medium Enterprises.

7. Pending assessments of Luxury Tax,Value Added Tax, Service Tax, Expenditure Tax, House & Water Tax etc. further liability, if any, could not be ascertained and provided for in account.

8. The Company has unutilised Cash Credit Limit of Rs. 160 lacs (2010 - Rs. 160 lacs) from Allahabad Bank which is secured by hypothecation of present and future movable assets i.e. stock of provisions, wines, crockery, linen and other stores and also present and future book debts of the Company's hotels and is additionally secured by mortgage of the Company's hotels at Agra & Jaipur aggregating to Rs. 678 lacs. This is personally guaranteed by Chairman cum Managing Director (ex & present).

9. Fixed deposit of Rs. 40,599,760 have been lodged with Allahabad Bank for availing overdraft limit not exceeding Rs. 300 Lacs.

10. No amount is paid / payable by the Company under Section 441A of the Companies Act, 1956 (Cess on turnover) since rules specifying the manner in which the Cess shall be paid has not been notified yet by Central Government.

11. Depreciation has been provided in the accounts on "Straight Line Method" at rates prescribed in Schedule XIV to the Companies Act, 1956 except for specific assets stated below where different rates are applied which are not less than those prescribed under the Companies Act, 1956 :

i) Leasehold land is amortised over a period of 30 years. Leasehold land acquired on 99 years basis is not amortised.

ii) Intangible assets viz Trade Marks and Computer Software are being amortised over a period of sixty months.

12. Since depreciation has been calculated on the revalued costs, the difference of depreciation on original cost and the revalued figures amounting to Rs. 1,024,668 (2010 - Rs. 1,024,668) has been withdrawn from the revaluation reserve and deducted from the gross depreciation for the year.

13.1 Managerial Remuneration paid / payable to Directors

Note: As the future liabililty for gratuity and leave encashment is provided on an actuarial basis for the Company as a whole, the amount pertaining to the directors is not ascertainable and, therefore, not included above.

14.1 (i) The Company has entered into operating Lease arrangement for office premises, guest houses and residential premises of employees/directors. Some of the significant terms and conditions of the arrangements are:

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

- lease arrangements which are not non-cancellable are generally renewable by mutual consent on mutually agreeable terms

(ii) Rent in respect of above are charged to Profit & Loss account.

15.1 General description of arrangements-

(i) Future lease rental payments are determined on the basis of annual lease payment as per agreement.

(ii) At the expiry of the lease term, the Company has an option either to return the assets or extend the term by giving notice in writing.

15.2 (i) The Company has also entered into operating leases relating to shops etc. Shop licence fee has been recognised as income in the Profit & Loss Account.

16. The primary reporting of the Company has been prepared on the basis of business segments. The Company has only one business segment, which is hotel operations and allied business services and operates in a single business segment based on the nature of its products, the risks and return, the organisation structures and the internal financial reporting systems. Accordingly, the figures in these financial statements relate to the Company's single business segment.

Secondary segment reporting is prepared on the basis of the geographical location of its operations. The operating interests of the Company are confined to India in terms of the operations. Accordingly, the figures in the financial statements relate to the Company's single geographical segment being operations in India.

17. Details of transactions entered into with related parties during the year

A) Related parties and their relationship

i) Subsidiary Companies – Nil

ii) Key Management Personnel :-

a) Directors

Shri Birendra Kumar ( Chairman & Managing Director)

Shri Apurv Kumar (Joint Managing Director)

Shri Rupak Gupta (Joint Managing Director)

Smt. Supriya Gupta (Executive Director)

Shri Rakesh M Gupta

Shri Sushil Kumar

Shri Arvind Kumar

b) Relatives of Directors

Shri Upendra Kumar

Shri Manish Kumar

Smt. Rajeshwari Kumar

Smt. Renuka Kumar

Shri Anoop Kumar

Shri Binay Kumar

Shri Ravi M Gupta

Shri Alok Kumar

Shri Vivek Kumar

Shri Arjun Kumar

Shri Akshay Gupta

Smt. Minakshi Gupta (Late)

Enterprise in which Key Management Personnel have significant influence:

U.P. Hotels Clarks Limited

U.P. Hotels India Limited

Kalyani Holdings and Finance Limited

Indian Textiles Company Private Limited

Indian Textiles Company (Holdings) Private Limited

Hotel Clarks Varanasi Limited

Great Value Hotels Private Limited

Carbon Paste Limited

Banaras House Private Limited

Banaras House IGA South Asia Limited

Bonita India Limited

Banaras International Limited

Banaras Global Limited

Banaras House Engineering Private Limited

U P Export Industries Limited

ANK Travels Limited

Silk Emporium

Oriental Textiles

Jaipur Silk Emporium

Rastriya Vikas Limited

Oriental Emporium

Jaipur Shop

Chandauli Agro Dairy Products Private Limited

Pride Hospitality Private Limited

Clarks Brij Hotels (I) Private Limited

18. Employees Benefits

18.1 Defined Contribution Plans.

The Company makes contribution towards Provident Fund and ESIC for qualifying employees. The Provident Fund & ESIC plans are operated by Regional Provident Fund Commissioner and Director Employees State Insurance Corporation. The Company is required to contribute a specified percentage of payroll cost to the retirement benefit schemes to fund the benefits. The only obligation of the Company with respect to their retirement benefit plan is to make specified contribution at specified rates.

18.2 Defined Benefit Plan Gratuity

The Company makes annual contribution to Employees Group Gratuity cum Life Insurance Scheme of Life Insurance Corporation of India (funded) at all units except Khajuraho. The scheme provide for lump sum payment to vested employees on departure of an amount equal to 15 days salary (last drawn) for each completed year of service. Vesting occur on completion of five years service. The recent actuarial valuation was carried out at 31st March, 2011 by Life Insurance Corporation of India under the Projected Unit Credit Method. The Actuarial valuation at one unit is carried out by an Actuary under the Projected Unit Credit Method. Provisions are made to bring gratuity liability in line with actuarial valuation. The funds are invested by Life Insurance Corporation of India.

18.3 Gratuity expenses and leave encashment have been recognised under the head employees remuneration & welfare expenses

19. The Company has not made any remittances in foreign currencies on account of dividends during the year and does not have information to the extent to which remittances in foreign currencies on account of dividend have been made by or on behalf of non resident shareholders.

20. The Company is not required to give any quantitative and valuewise information in respect of purchases, consumption, turnover, stocks etc. as the same is exempted vide Notification No. S.O. 301(E) dated 8th February, 2011 issued under Section 211(3) of the Companies Act, 1956 by the Ministry of Corporate Affairs, Government of India.

21. The figures for the previous year have been re-grouped / recast as far as practicable to make them comparable with those of the current year.

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Mar 31, 2010

1. Nature of operations:

U.R Hotels Limited ("the Company) is Incorporated and engaged In the business of operating hotels. The Company has properties In four locations.

1. Estimated amount of contracts remaining to be executed on capital account and not provided for (as certified by the Management) Rs. 55.41 lacs (2009 - Rs. 37.23 lacs).

2. Contingent liabilities not provided for in respect of:

a) Claims against the Company not acknowledged as debts and not provided for:

Demand raised by Government Authorities / Suppliers etc. Rs. 103.29 lacs (2009 - Rs. 102.61 lacs). No provision has been made as the probability of the claim succeeding Is remote.

b) The Income Tax Department has appealed to the Honble High Court, Allahabad against the order of the Income Tax Appellate Tribunal upholding the views of the company in respect of the claim of deduction regarding earnings In convertible foreign exchange under Section 80 HHD for Assessment Years 1989-90 to 1991-92 and luxury tax claimed under Section 43B for Assessment Years 1987-88 to 1990-91. The total amount disputed (excluding interest and penalties) In the matter aggregates to Rs.58.59 lacs (2009- Rs. 58.59 lacs). The Company, based on expert analysis, is hopeful of a favourable decision from the Honble High Court, Allahabad.

c) A stay has been granted by the Honble Allahabad High Court as regards applicability of the notification under section 3 of the U P Industrial Disputes Act, 1947 regarding minimum wages applicable to hotels in U.R Liability, if any, is unascertained.

d) A stay has been granted by Honble High Court of Allahabad, lucknow Bench In the matter of applicability of Provident Fund during Infancy period. Liability, If any, is unascertained.

e) Certain employees have filed claims in various courts / legal forums against suspension/ termination etc. and hav ? sought reliefs. The ultimate liability, If any, with respect to these claims Is currently not ascertainable and In the opinion of management, would not have material effect on the financial statements.

3.1 Balance confirmations have not been received from most of the parties showing debit/credit balances.

3.2 In the opinion of the Board, the value on realization of current assetsi loans & advances in the ordinary course of business will not be less than the amount at which they are stated In the Balance Sheet.

4.1 Margin Deposit Rs. 66,608 (2009-Rs. 63,307) and Fixed Deposits of Rs. 140,000 (2009 - Rs. 140,000) have been made / lodged for obtaining guarantees in favour of various Government Authorities.

4.2 Balance in current account Rs. 1,00,000 lying In dormant account remains unconfirmed against which the Company has taken remedial measures.

5.2 The Company does not use derivative financial Instruments such as forward exchange contracts and Interest rates swaps to hedge its risks associated with foreign currency fluctuations and Interest rate or for trading/speculation purposes.

6.1 The Company has not received from majority of parties any information / memorandum (as required to be filed by Suppliers / vendors with the notified authority under Micro, Small and Medium Enterprises Development Act, 2006), claiming their status as Micro, Small or Medium Enterprises.

7. During the year the Company has changed the basis of arriving cost from weighted average cost to FIFO basis at one of its location (unit) due to software problem for the purpose of valuation of Inventories which is also one of the recognized methods mentioned in Accounting Standard 2 (Revised) for valuation of Inventories. The effect of such a change is not material.

8. Pending assessments of Luxury Tax, Sales Tax, Service Tax. Expenditure Tax, House & Water Tax etc. further liability. If any, could not be ascertained ana provided for in account.

9. The Company has unutilised Cash Credit Limit of Rs. 160 lacs (2009 - Rs. 160 lacs) which is secured by hypothecation of present and future movable assets i.e. stock of provisions, wines, crockery, linen and other stores and also present and future book debts of the Companys hotels and Is additionally secured by mortgage of the Companys hotels at Agra & Jaipur aggregating to Rs. 678 Iocs. This Is personally guaranteed by Chairman cum Managing Director.

10. No amount is paid / payable by the Company under Section 441 of the Companies Act, 1956 (Cess on turnover) since rules specifying the manner in which the Cess shall be paid has not been notified yet by Central Government.

11. Depreciation has been provided in the accounts on "Straight Line Method" at rates prescribed in Schedule XIV to the Companies Act, 1956 except for specific assets stated below where different rates are applied which are not less than those prescribed under the Companies Act, 1956:

I) Leasehold land is amortised over a period of 30 years. Leasehold land acquired on 99 years basis is not amortised.

II) Intangible assets viz Trade Marks and Computer Software are being amortised over a period of sixty months.

12. Auditors remuneration includes Audit Fee Rs. 450,000 (2009 - Rs. 405,000) Tax Audit Fee Rs. 55,000 (2009-Rs. 55,000) and certification fee Rs. 102.500 (2009 - Rs. 74,000). Other expenses include a sum of Rs. 62,571 (2009 - Rs. 66,688) paid to Auditors as Service Tax.

13. Since depreciation has been calculated on the revalued costs, the difference of depreciation on original cost and the revalued figures amounting to Rs. 1.024,668 (2009-Rs. 1,024,668) has been withdrawn from the revaluation reserve and deducted from the gross depreciation for the year.

14. The primary reporting of the company has been prepared on the basis of business segments. The company has only one business segment, which is hotel operations and allied business services and operates in a single business segment based on the nature of Its products, the risks and return, the organisation structures and the Internal financial reporting systems. Accordingly, the figures in these financial statements relate to the companys single business segm. nt.

Secondary, segment reporting is prepared on the basis of the geographical location of its operations. The operating interests of the company are confined to India in terms of the operations. Accordingly, the figures in the financial statements relate to the companys single geographical segment being operations in India.

15. The details of transactions entered into with related parties during the year A) Related parties and their relationship i) Subsidiary Companies - Nil iil Key Management Personnel :-

a) Directors

Late Shri L P Gupta (Ex-Chairman & Managing Director) upto 14.2.2010

Shri Birendra Kumar (Chairman & Managing Director)

Shri Apurv Kumar (Executive Director)

Shri Rupak Gupta (Executive Director)

Shri Rakesh M Gupta

Shri Sushil Kumar

Shri Arvind Kumar

b) Relatives of Directors

Smt. Supriya Gupta Shri Upendra Kumar Shri Manish Kumar Smt. Rajeshwari Kumar Smt. Renuka Kumar Shri Anoop Kumar Smt. Minakshi Gupta Shri Binay Kumar Shri Ravi M Gupta Shri AJok Kumar Shri Vive!; Kumar Shri Arjun Kumar Shri Akshay Gupta

iii) Enterprise in which Key Management Personnel have significant influence:

U.P. Hotels Clarks Ltd.

U.R Hotels India Ltd.

Kalyani Holdings and Finance Ltd.

Indian Textiles Company Private Ltd.

Indian Textiles Company (Holdings) Pvt. Ltd.

Hotel Clarks Varanasi Limited

Great Value Hotels Pvt. Limited

Carbon Paste Limited

Banaras House Pvt. Limited

Banaras House >GA South Asta Ltd.

Bonfla India Ltd.

Banaros International Limited

Banaras Global Limited

Banaras House Engg Private Limited

U P Export Industries Limited

ANK Travels Umffed

Silk Emporium

Oriental Textiles

Jaipur Silk Emporium

ftastriya Vikas Limited

Oriental Emporium

Jaipur Shop

Chandauli Agro Dairy Products Pvt. Ltd.

Pride Hospitality Pvt. Ltd.

Clarks Brij Hotels India Pvt.Ltd.

16. Employees Benefits

16.1 Defined Contribution Plans.

The Company makes contribution towards Provident Fund and ESIC for qualifying employees. The Provident Fund & ESIC plans are operated by Regional Provident Fund Commissioner and Director Employees State Insurance Corporation. The Company is required to contribute a specified percentage of payroll cost to the retirement benefit schemes to fund the benefits. The only obligation of the Company with respect to their retirement benefit plan Is to make specified contribution at specified rates. The Company, has recognized Rs. 8,037,348 (2009- Rs. 7,627,625) for Provident Fund and Rs. 2,209,623 (2009 - Rs.2,139^505) for ESIC.

16.2 Defined Benefit Plan

Gratuity

1. The Company makes annual contribution to Employees Group Gratuity cum Life Insurance Scheme of Life Insurance Corporation of India (fundedl at all units except Khajuraho. The scheme provide for lump sum payment to vested employees on departure of an amount equal to 15 days salary (last drawn) for each completed year of service. Vesting occur on completion of five years service. The recent actuarial valuation was carried out at 31 ¦ March, 2010 by Life Insurance Corporation of India under the Projected Unit Credit Method. The Actuarial valuation of Khajuraho Is carried out by an Actuary under the Projected Unit Credit Method. Provisions are made to bring gratuity liability in line with actuarial valuation. The full actuarial valuation report Indicating amongst others viz. changes In present value of obligation/ fair value of plan assets, actuarial gain/ loss recognized, fair value of plan etc. were not furnished for 2007 & 2008 from the Life Insurance Corporation of India and as such the relevant particulars are not being furnished. The funds are invested by Life Insurance Corporation of India.

17. The Company has not made any remittances in foreign currencies on account of dividends during the year and does not have Information to the extent to which remittances in foreign currencies on account of dividend have been made by or on behalf of non resident shareholders.

18. Since It Is not practicable to give auantltywise details in respect of purchase, consumption, turnover, stocks etc., the Department of Company Affairs in exercise of Its powers conferred by sub-section (4) of Section 211 of the Companies Act, 1956. by its Order No. 46/70/2008-Cl-lll dated 14.5.2008 has exemptea the Company from giving such details for the years ending on 31 * March, 2008, 31" March, 2009 and ?]" March, 2010. However, the said Order reguire the Company to disclose certain additional particulars which have been disclosed.

19. The figures for the previous year has been re-grouped/ recast as for as practicable to make them comportable with those of the current year.