Ihc Ar2010 9.30.10

INDIA HOSPITALITY CORP.
ANNUAL REPORT 2010
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Table of Contents
1. Introduction to IHC 2
2. Operating Company Background:
a. Airline Catering Business 3
b. Restaurant and Hotel Business 4
3. Financial Highlights 5
4. Chief Executive Officer‘s Statement 6
5. Risk Factors 9
6. Statement of Corporate Governance 10
7. Board of Directors 16
8. Corporate Information 18
9. Consolidated Financial Statements:
a. Independent Auditors Report 19
b. Consolidated Balance Sheet 21
c. Consolidated Statement of Comprehensive Income 23
d. Consolidated Statement of Changes in Shareholders‘ Equity 24
e. Consolidated Statement of Cash Flows 26
f. Notes to Consolidated Financial Statements 28
Annual Report 2009-2010 Page 1

Introduction to IHC
India Hospitality Corp. (―IHC‖ or the ―Company‖) is a pan-Indian diversified company with interests
in the hospitality and leisure industries. Its mission is to create a portfolio of opportunities through the
acquisition and successful integration of Indian businesses and assets in the hospitality, food services
and related industries. The Company is listed on AIM, a market operated by the London Stock
Exchange, and trades under the ticker ―IHC‖.
IHC operates in the Indian market through its subsidiaries SkyGourmet Catering Private Limited
(―SkyGourmet‖) and Red Planet Restaurants Private Limited (formerly Mars Restaurants Pvt Ltd)
(―Mars‖) and has three business divisions, Airline Catering, Food Services and Hotels.
As of now, the Company operates 6 flight kitchens, a chain of 32 patisseries, 2 food courts and 3 hotels
across India. The Company is also expanding its hotels business by planning a pan-India roll out of its
brands and considers it to be amongst the key drivers for future growth. IHC strongly leverages on
operational synergies between subsidiaries to achieve cost leadership in the industry.

Operating Company Background
Airline Catering - SkyGourmet
SkyGourmet, within a short period of time, has become a major player in the Indian airline catering
business. It delivers a comprehensive range of high quality catering products and services to a majority
of the domestic airlines operating both in India and overseas along with a growing number of
international carriers. SkyGourmet prepares and supplies meals, other food items and beverages to its
airline customers along with providing the necessary logistical support and ancillary services.
From its inception as a company with a single Air Catering Unit (―ACU‖) in 2002, SkyGourmet has
emerged as one of the fastest growing air catering companies in the country. It has rapidly expanded its
presence to the country's biggest air transport hubs, with an established production capacity of 108,000
meals per day as of March 31, 2010.
Sky Gourmet‘s ACUs are extremely well designed and efficient and employ the most modern
machinery and technology. The entire design and process standards support its mission of
―Exceptional Quality‖, which is now well recognised across the country. It has a well structured and
highly evolved quality assurance facility with well equipped microbiological labs at each of the locations.
All the units are Hazard Analysis and Critical Control Point (―HACCP‖) certified by the British
Standards Institute. HACCP is a management system in which food safety is addressed through the
analysis and control of biological, chemical and physical hazards from raw material production,
procurement and handling, to manufacturing, distribution and consumption of the finished product.
With state-of-the-art ACUs and astute supply and procurement processes, SkyGourmet has achieved
the distinction of being amongst the lowest cost operators in the industry. SkyGourmet is relentlessly
focused on three strategic dimensions - cost leadership, growth in customer base and geographic reach
- while at the same time ensuring the highest quality.

Restaurants & Hotels – Red Planet Restaurants Pvt. Ltd. (formerly Mars Restaurants Pvt Ltd)
- Referred to as “Mars”
Mars has two lines of businesses. It operates a multi-brand food services chain along with hotels
through two different divisions. The food services division of Mars operates in both specialty and value
for money segments catering to a variety of eating formats, including retail bakery outlets and
institutional catering. Mars‘ hotels business operates under the flagship brand ―Gordon House Hotels‖.
Food Services Division
Birdy’s has emerged as one of Mumbai's popular chain of ―cake and savory‖ retail outlets. These
outlets stock a wide range of patisserie, sandwiches and desserts besides an extensive range of
premium chocolates. Presently Mars has 32 ―Birdy‘s‖ outlets in Mumbai and Delhi.
All Stir Fry is an oriental street-kitchen-style casual dine-in restaurant concept located at the Gordon
House Hotel, Mumbai. The restaurant is a noodle bar that allows customers to create their own meal
and watch it being prepared at the wok counter. The restaurant serves a wide variety of exotic and
select Pan-Asian foods.
The Company also has other operational brands such as Roti, China Joe and Dosa Diner, which are
currently available only within the food courts of larger shopping areas such as malls offerings. The
Company also currently operates the restaurants brands Just Around the Corner, Not Just Jazz by the
Bay & The Pizzeria & Pasta Bar, which are currently operational through franchise arrangement.
Food Courts – Mars operates and manages a multi-brand food court in the Inorbit Mall in Mumbai.
The Company also operates a multi-brand food court at the E-Square Mall in Pune under a
management contract arrangement.
Institutional Catering – The Company has a focus on institutional and industrial catering where it
provides ―private label‖ food for established third party retail outlets, caters to outdoor events,
corporate clients and institutions like hospitals. This segment is addressed through the Company‘s
existing kitchen infrastructure.
Hotel Division:
The hotel division currently operates its existing properties under the Gordon House Hotel brand. The
Gordon House Hotel is a boutique four-star hotel that is highly scalable and is ideally positioned for
downtown city locations and as an addition to shopping malls. IHC currently owns and operates a 29-
room hotel in South Mumbai and operates a 30-room hotel in Pune under a management contract.
Additionally, it has engaged in a management contract to operate a 49-room property that is currently
under development in Chandigarh and a license agreement for the Gordon House Hotel brand for an
existing 103-room hotel near the Mumbai International airport.

Financial Highlights – Audited IFRS Results
Financial Performance
Year ended Year ended

USD Thousands
March 31, 2010 March 31, 2009
Total Assets 168,175 159,791

Total Liabilities 67,363 58,311
Shareholders’ Equity 100,812 101,481
Total Revenue 41,737 36,162

Gross Profit 9,904 4,910
EBITDA 588 778
Depreciation, Amortization and
17,737 12,606
Impairment
Finance Charges 4,573 3,677
Net Profit/(Loss) (19,571) (14,203)
Exchange Difference on Translation 17,477 (30,593)
Total Comprehensive Income (2,093) (44,796)
Financial Ratios
Debt to Equity (Times) 0.39 0.31

Earnings/(Loss) Per Share (USD)
Basic (0.65) (0.51)
Diluted (0.65) (0.51)
Book Value per Share (USD) 3.26 3.61
Market Share Price (USD) 0.98 0.10

Chief Executive Officer’s Statement
India - Macro Economic Outlook

There was a significant slowdown in the growth rate in the second half of 2008-09, following the
financial crisis that began in 2007. The real turnaround came in the second quarter of 2009-10 when
the economy grew by 7.9 percent.1 Over the span of the year, the economy posted a remarkable
recovery, not only in terms of overall growth figures but, more importantly, in terms of certain
fundamentals, which justify optimism for the Indian economy in the medium to long term.
Sky Gourmet – Airline catering

After the recent recessionary years, the Indian aviation industry is now witnessing the emergence of a
more favorable environment supported by an economic recovery that has boosted demand levels in the
domestic market and the international travel market.
Domestic traffic has grown by about 20% from last year according to Centre for Asia Pacific Aviation
(―CAPA‖) estimates, and most of our key customers are reporting higher load factors. Domestic
airlines carried 33.9 million passengers during January-August 2010, which was an increase of 19.3%
when compared to the corresponding period in 2009, according to data released by Directorate General
Civil Aviation (―DGCA‖). With this improved consumer sentiment, Jet Airways is converting 63 flights
a day from the low cost brand Jet Konnect to full service Jet Airways flights. Kingfisher Airlines
already offers a limited service option through its Kingfisher Red brand. These trends directly benefit
SkyGourmet.
The new international terminal at Delhi, with a capacity to handle 60 million passengers annually, is also
helping improve the traffic, especially for the national carrier National Aviation Company of India
Limited (―NACIL‖). NACIL has announced its intention to set up its hub in Delhi and a number of
long haul non-stop flights to U.S. are being planned from this Winter schedule2.
Looking forward, the directors expect to see robust growth in the aviation sector over the next 12-18
months, as all economic indicators are forecast to stay positive and infrastructure continues to improve.
SkyGourmet continued to remain a dominant player in the domestic air catering business. The asset
and capacity utilization of the business has constantly increased. During the year, SkyGourmet signed a
catering contract with NACIL and strengthened its association with Jet Airways and Kingfisher Airlines.
A number of measures for efficiency improvement and productivity enhancement were initiated by the
management team.
Hotels & Restaurants

The past eighteen months have been quite turbulent for the hospitality sector in India. On the back of
one of the worst recessions since the Great Depression, and despite having a self-contained public and
private sector, India suffered as a result of its links to the developed world. The terrorist attacks in
Mumbai impacted the hospitality business in the financial capital of India. A significant drop in
demand in South Mumbai, erosion of margins and loss of customer confidence had a major effect on
the hospitality business in South Mumbai.
However, there was a dramatic shift in attitudes in 2009. The Sensex rebounded from a low of 8,300 in
March 2009 to its current level of around 20,000. Companies are hiring again and salaries are on the
rise. Consumer confidence is strong and discretionary spending is witnessing a healthy increase.
1
Economic Survey of India 2009-10
2
Business Standard Delhi, February 3, 2010
We believe that demand levels will continue to improve in 2010-11 as economic growth and the
Commonwealth Games ushers in momentum, companies increase their spend on travel and individuals
travel more for tourism. With the increase in salaries in India, discretionary spending is expected to
increase further, especially on travel and dining. The supply of new hotel rooms in many markets
remains an area of concern in the short term. In the long term however, the demand supply gap in
India is very real and there is need for more inventory in most cities. The shortage is highest in the
mid-market and the economy segment. International and domestic brands have made inroads in this
space over the last few years and this segment continues to grow in India. Indians are seeking value and
safe, affordable yet aspirational brands in this segment have great potential for consumer adoption.
The directors believe that these are healthy and positive indicators for the restaurant and hotel sector in
India. The positive impact has been clearly visible during the period from April to July 2010, when
occupancy levels of the Company‘s south Mumbai hotel touched 95% and with a higher average room
rate than last year. During the past 12 months, the Company added 10 new pastry shops under the
brand ―Birdy‘s‖, taking the total to 32. During the year, the Company signed a partnership agreement,
through its Indian subsidiary (Gordon House Estates Pvt. Ltd), with Entertainment World Developers
Pvt. Ltd (―EWDPL‖) to manage its 10 hotels. The project has been put on hold due to funding
constraints.
Management
With effect from 1 August 2009, IHC assumed direct operating control of its Indian subsidiaries, after
the disengagement of the operating agreements between IHC‘s operating companies, Red Planet and
Sky Gourmet (together the ― Operating Companies‖) and Mars Catering Services Pvt. Ltd, a company
controlled by Sanjay Narang. In anticipation of this development, the Company had taken necessary
steps to put in place an experienced operating and management team to enable the Company to
continue to run and further develop its operations. As a result of disengagement of the agreements,
Mr. Narang and his affiliated entities are bound by an exclusivity, non-compete and non-solicit
restrictions in relation to Sky Gourmet for a period of two years from 1 August 2009. During January
2010, the Company appointed Mr Rajesh Mittal as its CFO, an experienced professional with 22 years
of experience in the field of finance in diverse industries.
Financial Resources
The cash flows of the Company continued to remain under pressure due to cash losses, one-off
expenses on account of disengagement of the operating agreements with Mars Catering Pvt. Ltd and
poor liquidity of several airline companies resulting in higher receivables. A number of measures were
taken during the year to tide over the situation. A short term line of credit amounting to Rs 250 million
(US$ 5.56 million) was raised through an Indian public bank. Various cost optimization mechanisms
were instituted, along with continued pressure on airlines to recover outstanding receivables. In
addition to this, the Company is exploring fund raising programs at both operating and holding
company levels.
Board of Directors
Mr Richard Foyston and Mr Nicholas Bloy (directors nominated by Navis Management Sdn Bhd)
resigned from the board of the Company on 29 October 2009. Mr Andrew Sasson resigned from the
board of the Company on 15 April 2010. I would like to take this opportunity to thank outgoing
directors for their contribution.

Concluding Remarks & Acknowledgements
The directors believe that the Indian consumer market has huge potential to grow for the travel,
tourism and hospitality industry. We look forward to being able to leverage on these opportunities in
the years to come. The directors wish to place on record their deep appreciation to employees at all
levels for their hard work, dedication and commitment. The enthusiasm and unstinting efforts of the
employees have enabled the Company to constantly improve its performance.
Ravi S. Deol
Chief Executive Officer and Managing Director

Risk Factors
Risk Mitigating Strategy
General Airline Industry Trends:

Airline catering operations are dependent on the airline • Increase the share of non-catering
industry trends. SkyGourmet‘s revenues are largely dependent business in the overall IHC portfolio.
upon the number of passengers who travel on airlines, the • Build long-haul international
number of airline flights and the level of meal service provided business.
to passengers. As a result, a decline in the number of
passengers, the number of airline flights and/or the quality and
quantity of airline meal services could have a significant
adverse effect on SkyGourmet‘s revenues and earnings.
Certain events, including economic slowdowns, increased
aviation fuel costs, airline labor strikes, acts of terrorism
against airlines, airline accidents and war, historically have had a
significant negative impact on airline profitability and, to a
lesser extent, the number of travelers.
Receivable Risks: • Proactive management of

Given the financial condition of most airlines globally, and receivables.
especially those in India, there is a risk that the level of • Insurance.
receivables can increase leading to enhanced working capital • Enhance working Capital Limits.
funding needs.
Loss of Key Customers:

The concentrated nature of the business customers means that • Continued diversification of client
the loss of either Jet Airways or Kingfisher as a client would base (domestic and international
have a significant impact on the business in the short to airlines).
medium term. • Focus on superior customer service.
Commodity Price Inflation Particularly Food Prices:

Increased commodity, energy and other costs could adversely • Careful supplier management with
affect IHC‘s operating companies. The performance of the long term supplier contracts.
companies depends on their ability to anticipate and react to • Continual cost-reduction programs.
changes in the price and availability of food commodities. • Implement raw material substitution
Prices may be affected by a range of factors, including the programs.
general risk of inflation as well as shortages or interruptions in • Recover additional costs as
supply due to weather, disease or other conditions beyond the appropriate and possible.
Company‘s control.

Statement of Corporate Governance
In managing the affairs of the Company, the Board of Directors is committed to high standards of
business integrity, ethics and professionalism across all our areas. As a fundamental part of this
commitment, we support the highest standards of Corporate Governance. The Company conforms to
applicable laws and regulations, observes the principle of transparency of information, maintains a
proper system of internal controls at operating companies, has its financial statements audited by
qualified and independent outside professionals, respects employees‘ interests including compensation
and working conditions, ensures protection of the environment and plays a constructive role in the
community.
IHC also has a Code of Conduct, which outlines the minimum expected behaviour from all its
employees and this can be obtained from the Company‘s website.
The Board of Directors

The Board of Directors is responsible for overseeing the Company, on behalf of all shareholders, and
abides by the principles of Corporate Governance and best practices. Under these guidelines, the Board
is responsible for overseeing the strategic direction for the Company and its management, ensuring the
Company has proper internal controls and that transactions are done on an arms-length basis with the
interests of all shareholders in mind.
IHC is headed by its Board, which leads and controls the Company. It is currently composed of 5
members.
Appointment of new directors to the Board and matters of remuneration are handled by the Board as
recommended by the Nominating and/or Remuneration Committee(s).
Roles and Responsibilities of the Board of Directors

The principal roles and responsibilities of the Board include:
Strategic Plan
 Review, adopt and monitor a strategic plan for the Company;
 Review and approve any expansion, diversification into new geographies and any activity which
is materially different from that being undertaken by an existing part of Company‘s business;
 Oversee, on an ongoing basis, the conduct of the Company‘s business to evaluate whether the
business is being properly managed and ensure that the Company‘s target and long term
objectives are adequately aligned with the overall performance;
 Identify principal risks and ensure the implementation of appropriate systems to manage these
risks like insurance, hedging, borrowing limits and corporate security;
 Approve the formation, acquisition, divestment, liquidation or the cessation of operations of a
company (including a joint venture company) or other assets or liabilities;
 Approve any investment or capital projects or any other transactions, in each case where such
transaction represents 10 percent or more of the Company‘s market capitalisation or the
Group‘s gross revenues, costs or assets.

Financial Plan
 Approve the Group's annual budget including the operating and capital expenditure budgets
and any material changes to them;
 Approve the interim and final financial statements and the Annual Report and accounts, as per
the recommendation of the Audit Committee;
 Review and approve results for submission to applicable Stock Exchange(s), any other
regulatory body and for public release;
 Authorise transfers to reserves and appropriations of profit by the Company and to approve
the dividend policy, declare the interim dividend and recommend the final dividend;
 Receive and review the reports of the Audit Committee on matters including related party
transactions and approve the recommendations of the Audit Committee, including the
remuneration of the Company's auditors and recommendations for the appointment, re-
appointment or removal of the Company's auditors to be put to shareholder approval;
 Approve the change or implementation of accounting policies and practices (including any
significant changes thereto) to be applied and adopted in the preparation of the Group's
financial statements, to receive any proposed qualification to the accounts;
 Review the adequacy and the integrity of the Company‘s internal control systems and
management information systems, including systems for compliance with applicable laws,
regulations, rules, directives and guidelines;
 Receive for post completion review a report on all capital expenditure projects which it
approves;
 Approve increases in the authorised share capital of the Company and the issue of shares or of
securities conferring rights of subscription for or conversion into shares in the Company;
 Authorise calls on or forfeiture of shares;
 Approve any own purchases or redemptions of shares or any reductions of capital by the
Company including the use of treasury shares;
 Approve any contracts with a third party, including relating to property or land, in excess of
one year's duration or not in the ordinary course of business;
 Approve any contracts which are material strategically or by reason of size entered into in the
ordinary course of business;
Treasury Items
 Receive at least twice each year proposals setting out the policy for the financing of the Group;
 Approve the issue to third parties of debenture or loan stocks, bonds and other paper
programmes, delegating authority, as appropriate, to finalise details;
 Approve guarantees and letters of comfort where the amount of the loan or liability exceeds
£100,000 for subsidiaries or £100,000 in respect of third parties;
 Approve in principle the granting of security over any Group asset, the entering into of loan
facilities, debt factoring, sale and leaseback arrangements and contracts for derivatives, in each
case with third parties, delegating authority, as appropriate, to finalise details;
 Approve at least once each year proposed credit limits for the placing of deposits with
individual financial institutions;
 Receive and review at least twice each year proposals in respect of the management of the
Group's foreign exchange and interest rate exposures.
Other Items
 Support an Investor Relations program for the Company;
 Review and authorise reports, updates and plan on matters related to Legal, Administration and
employee benefits, including share option plans;
 Review, recommend and appoint members of the Board and Senior Management as per the
recommendations of the Nominating and Remuneration Committee;
 Review and ensure adequate succession planning for key management positions;
 Approve the formulation of policies regarding charitable or political donations and a Code of
Ethics and business practice;
 Approve the appointment of professional advisers in addition to the Company's auditors;
 Undertake a formal and rigorous review annually of its own performance, that of its
committees and individual directors;
 Determine the independence of the directors;
 Receive reports on the views of the Company's shareholders.
Meetings
The Board of Directors met seven times during the period April 2009-March 2010, with due notice of
the issues to be discussed and the Company Secretary recorded its conclusions in discharging its duties
and responsibilities.
Board Attendance 2009-10
24-Apr-09 25-Jun-09 17-Jul-09 29-Sep-09 10-Dec-09 17-Dec-09 18-Dec-09

Jason Ader X X X P X X X
Ravi Deol X A X X X X X
Anthony
X P X P X A A
Juliano
Sandeep
X A X X X X X
Vyas
Richard
P X X X NA NA NA
Foyston
Nicholas
P P P P NA NA NA
Bloy
Andrew
P P P P P P P
Sasson
Bruno
P NA NA NA NA NA NA
Seghin
Ajay Mehra X A P A X P P
X - Attended
P - Appointed Proxy
A - Absent
NA - No longer valid to attend
*Richard Foyston resigned from the Board on 29 October 2009

*Nicholas Bloy resigned from the Board on 29 October 2009

*Andrew Sasson resigned from the Board on 15-April-2010
A majority quorum of members was present, of which at least two were non-UK resident directors.
The Board from time to time invited the management to attend the Board meeting to present details on
issues for which they were responsible.
Independent Professional Advice

The Board has approved a procedure for Directors to take independent professional advice if
necessary at the Company‘s expense (prior approval of Chairman is necessary where such fees exceed £
5000). Before incurring professional fees, the director concerned shall give prior written notice to the
Chairman and the Company Secretary of his intention to seek independent professional advice in the
furtherance of his duties along with the name of the professional advisers.
Establishment of Committees
The Board has approved the establishment of committees to assist with the operational aspects of the
Company.
The Committees and its members are :
COMMITTEE MEMBER COMMITTEE

EXECUTIVE NOMINATING AUDIT REMUNERATION
COMMITTEE COMMITTEE COMMITTEE COMMITTEE
Jason Ader X
Ravi Deol X
Anthony Juliano X X X
Sandeep Vyas X
Ajay Mehra X
Executive Committee
The Executive Committee has been established to manage and control the day to day running and
operation of the Company, save where matters are reserved to the Board. The Executive Committee
will operate in accordance with the terms of reference, the Articles and any specific directions given to
the Executive Committee by the Board
Nominating Committee
Consideration will be given by the Nominating Committee to future succession plans for Board
members as well as consideration as to whether the Board has the skills required to manage the
Company effectively.
Audit Committee
Audit Committee is set up, inter alia, to review the accuracy and adequacy of financial reporting,
internal controls, internal audit, compliance with applicable laws and all related-party transaction
disclosures.‖

Remuneration Committee
The Committee is set up to review annually the remuneration of the Directors and agree the level of
non-executive fees. Similar consideration will be given to the remuneration of key employees.
Investor Relations
The Board seeks to keep shareholders informed of key financial and operational information on a
regular basis with announcements posted in the Investor Relations section of the Company website:
www.indiahospitalitycorp.com. Periodic statements, Annual Reports, overview presentations,
announcements, etc. can be viewed there and downloaded. This section of the Company‘s website gives
the shareholders an option to subscribe to email alerts for new information which has been posted to
the website.
The Board of Directors supports dialogue between the Board of Directors and private and institutional
shareholders and encourages their participation and the Company‘s Annual General Meeting.
ACCOUNTABILITY AND AUDIT
Financial Reporting
It is the Board‘s commitment to provide a balanced, clear, and meaningful assessment of the financial
position and prospects of the Company in all its reports to shareholders, investors, and regulatory
authorities.
The timely release of the periodic financial statements and press release, and the inclusion of this
information on the Company‘s website, reflect the Board‘s commitment to provide timely and
transparent disclosures of the performance of the Company.
Statement of Directors’ Responsibility For Preparing The Financial Statements

The Directors are required by current regulations to prepare financial statements for each financial year,
which have been made out in accordance with applicable approved accounting standards and give a true
and fair view of the state of affairs of the Company at the end of the financial year and of the results
and cash flows of the Company for the financial year.
In preparing the financial statements, the Directors have:
 selected suitable accounting policies and applied them consistently;
 made judgments and estimates that are reasonable and prudent;
 ensured that all applicable accounting standards have been followed; and
 prepared financial statements on the going-concern basis as the Directors have a reasonable
expectation, having made enquiries that the Company has adequate resources to continue in
operational existence for the foreseeable future.
The Directors have the responsibility for ensuring that the Company keeps accounting records which
disclose with reasonable accuracy the financial position of the Company and which enable them to
ensure the financial statements comply with current regulations.

The Directors have overall responsibilities for taking such steps as are reasonably open to them to
safeguard the assets of the Company and to prevent and detect fraud and other irregularities.
Relationship with Auditors

Through the Audit Committee of the Board, the Company has established a transparent and
appropriate relationship with the Company‘s Auditors, both internal and external.
STATEMENT OF INTERNAL CONTROLS
Introduction
Listed companies are required to maintain a sound system of internal controls to safeguard
shareholders‘ investment and Company assets.
Responsibility
The Board of Directors recognises that good Corporate Governance requires sound internal controls
and risk management practices. The Board affirms its overall responsibility for the Company‘s systems
of internal controls and risk management, and for reviewing the adequacy and integrity of those
systems. It should be noted, however, that such systems are understood to manage risk, but cannot
provide complete assurance of the elimination of risk in meeting business objectives. In addition, it
should be noted that any system can provide only reasonable, but not absolute, assurance against
material misstatements or losses.
Key Elements of Internal Controls
The key elements of the Company‘s internal controls systems are as follows:
 The Internal Audit of the operating companies focuses on key areas of accounting and operations;
 A clearly-defined delegation of responsibilities to the Board and to Company management;
 Clearly documented internal policies and procedures that are subject to regular review and
improvement;
 Regular and comprehensive information provided to management, covering financial performance
and key business indicators;
 A detailed budgeting process in which the Company prepares the budget for the coming year that
is approved by management and by the Board;
 Monthly monitoring of results against budget with follow-up on major variances and on
management actions taken, as necessary.
A minimal number of internal controls weaknesses were identified during the period, all of which have
been, or are being, addressed. None of the weaknesses have resulted in any material losses, contingent
problems, or uncertainties that would require disclosure in the Company‘s Annual Report.

The Board of Directors
(As of 30th September 2010)
Mr. Jason N. Ader
Chairman of the Board
Mr. Ader founded and serves as the President and Chief Executive Officer of Hayground Cove Asset
Management LLC, a New York-based investment management firm. Mr. Ader has a strong asset
management record and, prior to founding Hayground Cove, served as a Senior Managing Director at
Bear Stearns & Co., Inc. from 1995 to 2003, where he performed equity and high yield research for
more than 50 companies in the gaming, lodging and leisure industries. From 1993 to 1995, Mr. Ader
served as a Senior Analyst at Smith Barney covering the gaming industry. From 1990 to 1993, Mr.
Ader served as a buy-side analyst at Baron Capital, where he covered the casino industry. Mr. Ader has
a B.S. degree in Economics from New York University and a M.B.A. in Finance from New York
University, Stern School of Business.
Mr. Ravi S. Deol

Managing Director and Chief Executive Officer
Mr. Deol brings over 20 years of experience in consumer related businesses. A respected entrepreneur
he has pioneered several ventures including founding Barista Coffee; India's first indigenous coffee
chain which revolutionised life style-driven high street consumption. Barista continues to be a brand
icon with consumers in India and Middle East and recognised as leading retail brand. Subsequently Mr.
Deol architected Bharti Wal-Mart joint venture which marked Wal-Mart's entry into Indian retail.
Earlier he has worked with consumer businesses such as Wipro Consumer and Coca-Cola. An alumni
of University of Delhi and London Business School; Mr. Deol's pioneering path breaking business
successes have been widely recognised including prestigious nomination for the Ernst & Young
Entrepreneur of the Year.
Mr. Sandeep Vyas

Executive Director and Chief Operating Officer
Mr. Sandeep Vyas was the co-founder and an executive vice-president of Barista Coffee and has held
leadership positions in the consumer and hospitality industries. Recently, as the director of
international operations for Yum! Brands International, he led the cross functional team responsible
for the global repositioning of the Pizza Hut dine-in brand. Prior to this as the head of operations for
Yum! Brands‘ strategic business unit in the Indian subcontinent he led the re-entry of Yum! Brands‘
KFC business in India. Earlier Mr. Vyas has also served as the Head of marketing & brand
development for The Oberoi Group (EIH Ltd) where he was responsible for The Oberoi Hotels,
Trident Hotels & Vilas resort brands. Mr. Vyas has a bachelor‘s in business from the Delhi University
and an MBA from the Asian Institute of Management.
Mr. Anthony Juliano

Independent Director
Mr. Juliano has served as Managing Director of Dubai Investment Group, Global Real Estate and
Hospitality since February 2007. He also served as Executive Director, Dubai Investment Group,
Global Real Estate and Hospitality from March 2006 until February 2007. At Dubai Investment
Group, he oversees a USD2 billion global U.S. real estate portfolio, including a USD700 million
hospitality portfolio. From July 1999 to March 2006, Mr. Juliano held various senior positions with
GE Real Estate, including positions with the private equity investment platform and large
loan/mezzanine financing groups. Mr. Juliano was a real estate attorney with Thacher Proffitt & Wood
from 1993 to 1999 where his practice concentrated on real estate finance and capital markets. He has a
B.A. degree in English from the State University of New York at Albany and a J.D. degree from New
York Law School.

Mr. Ajay Mehra
Independent Director
Mr. Mehra is currently the Managing Director, South Asia, for Airbus S.A.S. He joined Airbus in 2000
and has since generated $14 billion of business in the civil aviation industry through various sales and
lease transactions. Mr. Mehra has over 30 years of experience in marketing and business development
across industries, including capital goods, industrial products and consumer services. He has spent the
last fifteen years of his career holding senior positions in the aviation industry, including General
Electric and Lucas Aerospace. Prior to Lucas Aerospace, Mr. Mehra worked for ITC Ltd.'s Hotels
Division as General Manager of Marketing. Mr. Mehra resides in New Delhi, India. Mr. Mehra holds a
Bachelor of Mechanical Engineering from Birla Institute of Technology (Mesra, Ranchi) and a Post
Graduate Diploma in Marketing Management from Jamnalal Bajaj Institute of Management (Bombay).

Corporate Information
India Hospitality Corp. Mumbai 400 004 – India

c/o Ogier Fiduciary Services (Cayman) Limited
89, Nexus Way, Solicitors to IHC:
Camana Bay, US Counsel
Grand Cayman KY1-9007 Proskauer Rose LLP
Cayman Islands 1585 Broadway
New York, NY 10036-8299
Company Secretary: United States of America
Ogier Secretaries (Cayman) Limited
89, Nexus Way, UK Counsel
Camana Bay, Travers Smith
Grand Cayman KY1-9007 10 Snow Hill
Cayman Islands London EC1A 2AL
United Kingdom
IHC Mauritius
c/o Matco Limited India Counsel
2nd floor, Harbour Front Building Phoenix Legal
President John Kennedy Street First Floor, CS 242,
Port Louis Mathuradas Mills Compound,
Republic of Mauritius N M Joshi Marg, Lower Parel
Mumbai, India
Nominated Adviser to IHC:
Grant Thornton Corporate Finance Cayman Islands Counsel
30 Finsbury Square, Ogier
London, EC2P 2YU 89 Nexus Way
Camana Bay
Broker to IHC Grand Cayman KY1-9007
Execution Noble & Co. Ltd Cayman Islands
The Old Truman Brewery
91, Brick Lane Registrar and Transfer Agent:
London E1 6QL Capita IRG (Offshore) Limited
Victoria Chambers
Auditor to IHC Liberation Square
Grant Thornton, India 1/3 The Esplanade
Engineering Centre, 6th Floor St. Helier, Jersey
9 Matthew Road, Opera House

India Hospitality Corp and its subsidiaries
Consolidated Financial Statements prepared in accordance with
International Financial Reporting Standards
March 31, 2010
Independent Auditors’ report
To
The Board of Directors of India Hospitality Corp.
We have audited the accompanying consolidated financial statements of India Hospitality Corp. (the
Company) and its subsidiaries (together referred to as ‗the Group‘), which comprise of consolidated
balance sheet as at March 31, 2010, and also the consolidated statement of comprehensive income, the
consolidated statement of changes in shareholders‘ equity and the consolidated statement of cash flows
for the year then ended, and a summary of significant accounting policies and other explanatory notes.
Management’s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in
accordance with International Financial Reporting Standards. This responsibility includes: designing,
implementing and maintaining internal control relevant to the preparation and fair presentation of
financial statements that are free from material misstatement, whether due to fraud or error; selecting and
applying appropriate accounting policies; and making accounting estimates that are reasonable in the
circumstances.
Auditors’ Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We
conducted our audit in accordance with International Standards on Auditing. Those standards require that
we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance
whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in
the financial statements. The procedures selected depend on the auditor‘s judgment, including the
assessment of the risks of material misstatement of the financial statements, whether due to fraud or
error. In making those risk assessments, the auditor considers internal control relevant to the entity‘s
preparation and fair presentation of the financial statements in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness
of the entity‘s internal control. An audit also includes evaluating the appropriateness of accounting
policies used and the reasonableness of accounting estimates made by management, as well as evaluating
the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our audit opinion.

March 31, 2010
Opinion
In our opinion, the financial statements give a true and fair view of the financial position of the Group as
at March 31, 2010, and of its financial performance and the changes in the shareholder‘s equity and its
cash flows for the year then ended in accordance with International Financial Reporting Standards.
Grant Thornton
Mumbai
Date: September 30, 2010

March 31, 2010
Consolidated Balance Sheet

(All amounts in US$, unless otherwise stated)
ASSETS Notes March 31, 2010 March 31, 2009
Non Current
Goodwill C 27,559,011 23,843,420
Property, plant and equipment D 74,294,333 70,233,618
Intangible assets E 37,113,267 39,308,905
Deferred tax assets Q 318,356 594,268
Other long term financial assets F 3,682,367 5,947,368
Prepayments and accrued income G 6,357,877 3,716,086
Restricted cash H 320,501 224,583
Total non current assets 149,645,712 143,868,248
Current
Inventories I 491,654 415,083
Trade and other receivables, net J 11,531,629 8,819,013
Other short term financial assets K 4,877,513 3,281,722
Prepayments and accrued income L 270,405 303,295
Cash and cash equivalents M 1,358,342 3,103,891
Total current assets 18,529,543 15,923,003
Total assets 168,175,255 159,791,252
LIABILITIES AND STOCKHOLDERS’

EQUITY
Stockholders’ equity
Issued capital 30,909 28,099
Additional paid in capital 148,590,149 147,469,159
Stock compensation reserve 300,767 -
Translation reserve (13,035,612) (30,513,587)
Accumulated earnings (35,074,178) (15,502,923)
Total stockholders’ equity 100,812,035 101,480,748

March 31, 2010
Notes March 31, 2010 March 31, 2009

Non current liabilities
Interest bearing loans and borrowings, net of current
portion N 25,800,331 22,251,185
Employee benefit obligations P 513,427 574,198
Deferred tax liability Q 13,692,882 15,300,754
Total non current liabilities 40,006,640 38,126,137
Current liabilities
Interest bearing loans and borrowings N 13,285,997 8,879,335
Trade and other payables O 14,070,583 11,305,032
Total current liabilities 27,356,580 20,184,367
Total liabilities 67,363,220 58,310,504
Total liabilities and stockholders’ equity 168,175,255 159,791,252
(The accompanying notes are an integral part of these consolidated financial statements)

March 31, 2010
Consolidated Statement of Comprehensive Income

Notes March 31, 2010 March 31, 2009
Revenues
Operating revenues T 35,707,908 34,748,944
Finance income 697,956 628,402
Other income 5,330,831 785,040
Total 41,736,695 36,162,386
Expenses
Direct operating expenses U 31,833,157 31,252,317
Administrative expenses V 26,946,863 16,553,857
Selling expenses W 104,969 184,154
Finance charges 4,573,230 3,677,004
Total 63,458,219 51,667,332
Result from operations before tax (21,721,524) (15,504,946)
Taxes Q
Deferred tax benefit 2,150,269 1,301,729
Net result from operations (19,571,255) (14,203,217)
Other comprehensive income:

Exchange differences on translation of foreign operations 17,477,975 (30,593,233)
Income tax relating to components of other
comprehensive income - -
Other comprehensive income for the year, net of tax 17,477,975 (30,593,233)
Total comprehensive income for the year (2,093,280) (44,796,450)
Profit/(loss) for the year attributable to:

Equity shareholders of India Hospitality Corp (19,571,255) (14,203,217)
Total comprehensive income attributable to:

Equity shareholders of India Hospitality Corp (2,093,280) (44,796,450)
Loss per share

Basic (0.65) (0.51)
Diluted (0.65) (0.51)

March 31, 2010
Consolidated Statement of Changes in Shareholder’s Equity

Equity attributable to shareholder’s of India Hospitality Corp
Number of Common Additional Stock Translation Accum- Total
paid in
shares stock – capital compens- reserve ulated stockholder’s
Amount ation earnings equity
reserve
Balance as at April
1, 2008 27,582,500 27,583 147,369,662 - 79,646 (1,299,706) 146,177,185
Share based payment
to a Director 15,750 16 99,997 - - - 100,013
Shares issued 500,000 500 (500) - - - -
Transactions with
owners 515,750 516 99,497 - - - 100,013
Profit for the year - - - - - (14,203,217) (14,203,217)
Other comprehensive
income:
Exchange differences
on translation - - - - (30,593,233) - (30,593,233)
Income tax relating to
components of other
comprehensive
income - - - - - - -
Total
comprehensive
income for the year - - - - (30,593,233) (14,203,217) (44,796,450)
Balance as at March
31, 2009 28,098,250 28,099 147,469,159 - (30,513,587) (15,502,923) 101,480,748

March 31, 2010
Consolidated Statement of Changes in Shareholder’s Equity

Equity attributable to shareholder’s of India Hospitality Corp
Number of Common Additional Stock Translation Accum- Total
paid in
shares stock – capital compens- reserve ulated stockholder’s
Amount ation earnings equity
reserve
Balance as at April
1, 2009 28,098,250 28,099 147,469,159 - (30,513,587) (15,502,923) 101,480,748
Issue of shares to
directors 2,809,500 2,810 1,120,990 1,123,800
share based payments
to directors 300,767 - - 300,767
Transactions with
owners 2,809,500 2,810 1,120,990 300,767 - - 1,424,567
Loss for the year (19,571,255) (19,571,255)
Other comprehensive
income:
Exchange differences
on translation 17,477,975 - 17,477,495
Income tax relating to
components of other
comprehensive
income - - -
Total
comprehensive
income for the year 17,477,975 (19,571,255) (2,093,280)
Balance as at March
31, 2010 30,907,750 30,909 148,590,149 300,767 (13,035,612) (35,074,178) 100,812,035

India Hospitality Corp and its Subsidiaries
March 31, 2010
Consolidated Statement of Cash Flows

Particulars March 31, 2010 March 31, 2009
(A) Cash inflow/ (outflow) from operating activities
Net result before tax (21,721,524) (15,504,946)
Adjustments to reconcile net income before tax to net cash

provided by operating activities:
Depreciation ,amortization and impairment 17,737,074 12,605,787
Interest expense 4,570,926 3,603,023
Settlement claims received (4,565,756) -
Interest income (147,678) (37,714)
Dividend received - (144,482)
Profit/Loss on sale of asset 151,737 115,808
Loss on transfer of business (108,891) -
Profit on sale of investments - (8,775)
Impairment of financial assets 346,713 482,803
Provision for expenses written back - 2,936
Share based payments to directors 1,421,757 -
Foreign exchange gain (952) -
Adjustments for changes in operating assets and liabilities

Current liabilities 2,818,583 287,608
Current assets (3,703,521) (4,184,591)
Net changes in operating assets and liabilities (3,201,532) (2,782,543)
Taxes refund/(paid) 83,840 (230,476)
Net cash used in operating activities (3,117,692) (3,013,020)
(B) Cash inflow/ (outflow) from investing activities

Interest income 147,678 37,714
Income from sale of investments 97 -
Purchase of property, plant and equipment (2,218,651) (9,407,287)
Settlement claims received 4,565,756
Proceeds from sale of assets 348,336 39,862
Dividend received - 144,482
Net cash provided/(used) in investing activities 2,843,216 (9,185,229)
(C ) Cash inflow / (outflow) from financing activities

Proceeds from long term borrowings (net) 3,057,859 2,305,992
Interest paid (4,570,926) (3,603,023)
Net cash used in financing activities (1,513,067) (1,297,031)

March 31, 2010
Net increase in cash and cash equivalents (1,787,543) (13,495,280)
Effect of exchange rate changes on cash 41,994 (1,503,760)
Cash and cash equivalents at the beginning of the period 3,103,891 18,102,932
Cash and cash equivalents at the end of the period 1,358,342 3,103,891
Cash and cash equivalents comprise

Cash in hand 52,948 37,062
Balances with banks 1,305,394 2,065,119
Investment in highly liquid funds - 1,001,710
1,358,342 3,103,891

March 31, 2010
Notes to Consolidated Financial Statements

NOTE A. BACKGROUND INFORMATION AND SUMMARY OF SIGNIFICANT

ACCOUNTING POLICIES
1. NATURE OF OPERATIONS
India Hospitality Corp. (‗the Company‘) and its subsidiaries are together referred to as (‗the Group‘). The
Company was formed on May 12, 2006 as blank-check Company to acquire Indian businesses or assets in the
hospitality, leisure, tourism, travel and related industries, including but not limited to hotels, resorts, timeshares,
serviced apartments and restaurants.
In July 2007, the Group completed the acquisition of India-based Mars Restaurants Private Limited (―MRPL‖ or
Mars), an emerging hotel and a restaurant company, and Sky Gourmet Catering Private Limited (―SCPL‖ or
SkyGourmet), an airline catering company from affiliates of Navis Asia Funds and certain private shareholders
(the "Sellers") pursuant to a share purchase agreement.
Mars was incorporated in the year 2000 with the objective of operating and managing restaurants. Since its
incorporation, Mars has diversified into bakery outlets and operating and managing food courts and hotels.
SkyGourmet was incorporated in the year 2002 and currently provides inflight catering services to a number of
domestic and international airlines. It has operations in Mumbai, Bangalore, New Delhi, Pune, Hyderabad and
Chennai.
2. GENERAL INFORMATION AND STATEMENT OF COMPLIANCE WITH IFRS

The Company was incorporated in the Cayman Islands on May 12, 2006 and its shares are publicly traded on the
Alternate Investment Market of the London Stock Exchange. As of March 31, 2010, the Company had wholly
owned subsidiaries incorporated in Mauritius, Netherlands and India. The Company expects to conduct business,
including the making of acquisitions, through its Mauritius subsidiary.
These financial statements have been presented for the year ended March 31, 2010.
The consolidated financial statements of the Group have been prepared in accordance with the International
Financial Reporting Standards (‗IFRS‘) issued by the International Accounting Standards Board effective for
accounting periods commencing on April 1 2009. These financial statements include comparative financial
information as at and for the period ended March 31, 2009, as required by IAS 1 - Presentation of Financial
Statements (‗IAS 1‘).
The consolidated financial statements of the Group are prepared and presented in United States Dollar (‗US$‘),
the Company‘s presentation currency.
The financial statements for the year ended March 31, 2010 (including comparatives) were approved by the
board of directors on September 29, 2010 (Refer Note LL). Financial statements once approved by the Board of
Directors are generally not amended.
3. ADOPTION OF NEW STANDARDS AND INTERPRETATIONS AND CHANGES IN

ACCOUNTING POLICY
The Group has adopted the following new interpretations, revisions and amendments to IFRS issued by the
International Accounting Standards Board, which are relevant to and effective for the Group's Consolidated
Financial Statements for the annual period beginning 1 July 2009:

March 31, 2010
 IAS 1 Presentation of financial statements (revised 2007)
 IAS 23 Borrowing costs (revised 2007)
 IFRS 7 Financial instruments: Disclosures – Amendments to improve disclosures about financial
instruments
 IFRS 8 Operating segments
Significant effects on current, prior or future periods arising from the first time application of these new
requirements in respect of presentation, recognition and measurement are described in notes 3.1 to 3.4:
An overview of Standards and Interpretations that will become mandatory for the Group in future periods and
have not yet been applied by the Group is given in note A - 5.
3.1. Adoption of IAS 1 Presentation of financial statements (revised 2007)

The consolidated financial statements are presented in accordance with IAS 1 Presentation of Financial Statements
(Revised 2007). The Group has elected to present the 'Statement of comprehensive income' as required by the
Standard as a single statement, which includes other comprehensive income.
The adoption of the standard does not affect the financial position or losses of the Group, but gives rise to
additional disclosures. The measurement and recognition of the Group's assets, liabilities, income and expenses
is unchanged, however some items that were recognised directly in equity are now recognised in other
comprehensive income, such as for example exchange differences on translation of foreign operations.
On adoption of this standard, an amount of US$ 17.47 million (Previous year: US$ (30.59) million) has been
recognised in other comprehensive income, which would have previously been recognised directly in equity.
On adoption of this standard, the opening balance sheet is the same as previously presented and therefore the third balance
sheet is not presented because the information is unchanged from the previously published financial statements
3.2. Adoption of IAS 23 Borrowing costs (revised 2007)

The revised standard requires the capitalization of borrowing costs, to the extent they are directly attributable to
the acquisition, production or construction of qualifying assets that need a substantial period of time to get
ready for their intended use or sale. In prior periods also, the Group's policy was to capitalize such borrowing
costs. Accordingly, there is no effect on the adoption of the revised Standard on the Group‘s accounting policy
in relation to such borrowing costs.
3.3. Adoption of amendments to IFRS 7 Financial Instruments: Disclosures – improving disclosures

about financial instruments
The amendments require additional disclosures for financial instruments that are measured at fair value in the
statement of financial position. These fair value measurements are categorised into a three-level fair value
hierarchy, which reflects the extent to which they are based on observable market data. A separate quantitative
maturity analysis must be presented for derivative financial liabilities that shows the remaining contractual
maturities, where these are essential for an understanding of the timing of cash flows. The Group has taken
advantage of the transitional provisions in the amendments and has not provided comparative information in
respect of the new requirements. The disclosure requirements of the amendments have been given in Note FF.
3.4. Adoption of IFRS 8 Operating segments

March 31, 2010
This year the Group adopted IFRS 8 Operating Segments, which replaces IAS 14 Segment Reporting. The
standard is applied retrospectively. The accounting policy for identifying segments is now based on internal
management reporting information that is regularly reviewed by the chief operating decision maker. In contrast,
IAS 14 required the Group to identify two sets of segments (business and geographical) based on risks and
rewards of the operating segments. The Group concluded that the operating segments determined in accordance
with IFRS 8 are the same as the business segments previously identified under IAS 14. However the accounting
policy for identifying segments is now based on internal management reporting information that is regularly
reviewed by the chief operating decision maker.
Refer to note A - 4.22 for further information about the entity's segment reporting accounting policies. IFRS 8
disclosures are shown in Note EE, including the related revised comparative information.
4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
4.1. OVERALL CONSIDERATIONS

The significant accounting policies that have been used in the preparation of these consolidated financial
statements are summarized below.
The consolidated financial statements have been prepared using the measurement basis specified by IFRS for
each type of asset, liability, income and expense. The measurement bases are more fully described in the
accounting policies below.
4.2. GOING CONCERN ASSESSMENT

The Group continues to be impacted by the economic environment and in particular was impacted by the
difficult circumstances experienced by the Indian aviation and hospitality industry. The Group has incurred a
loss after tax of US$ 19,571,255 (Previous year: US$ 14,203,217) and continued to experience uneven operating
cash flows in current year, which has led the Group to evaluate the Group‘s ability to continue as a going
concern and to realise its assets and discharge its liabilities in the normal course of business.
The Group‘s ability to fund its future operations is dependent upon its ability to establish profitable operations
and to obtain additional debt or equity financing. Management believes that the Group needs to raise additional
finance or reschedule its existing indebtedness over the next few months without which there could be delays in
planned capital expenditure and the Group being unable to take advantage of growth opportunities.
During the current year management had continued to focus on cash preservation and cost control and is also in
the process of exploring all potential sources of further funding (both from existing shareholders and third
parties) and monitoring its position under its banking covenants. In July 2010 the Group has renegotiated
repayments of certain of its terms loans from banks to reduce the repayment amounts and extend the term of
the loan. Further the company has also obtained an additional credit facility from another Indian bank to
enhance its existing financing arrangements. The Group has performed a detailed evaluation of its operations
and the cash flow projections for the next year in making its assessments on the going concern assumption.
Based on this evaluation, the management has concluded that it has sufficient sanctioned credit facilities and
other assets to help it meet its obligations as they fall due in the normal course of business.
Considering management‘s evaluation and further plans to deal with the current conditions, these financial
statements continue to be prepared on a going concern basis.
4.3. BASIS OF CONSOLIDATION

The group financial statements consolidate those of the Company and all of its subsidiary undertakings drawn

March 31, 2010
up to the dates specified in Note 8. Subsidiaries are all entities over which the Company has the power to control
the financial and operating policies. The Company obtains and exercises control through voting rights.
Unrealized gains and losses on transactions between the Company and its subsidiaries are eliminated. Where
unrealized losses on intra-group asset sales are reversed on consolidation, the underlying asset is also tested for
impairment losses from the Group‘s perspective. Amounts reported in the financial statements of subsidiaries
have been adjusted where necessary to ensure consistency with the accounting policies adopted by the Group.
Entities whose economic activities are controlled jointly by the Company and by other ventures independent of
the Group are accounted for using proportionate consolidation.
4.4. INVESTMENT IN JOINT VENTURES

Entities whose economic activities are controlled jointly by the Company and by other ventures independent of
the Company (―joint ventures‖) are accounted for using proportionate consolidation.
Unrealized gains and losses on transactions between the group and its joint venture entities are eliminated to the
extent of group‘s interest. Where unrealized losses on intra-group asset sales are reversed on consolidation, the
underlying asset is also tested for impairment losses from the Company‘s group perspective.
Amounts reported in the financial statements of jointly controlled entities have been adjusted where necessary to
ensure consistency with the accounting policies adopted by the Group.
4.5. FOREIGN CURRENCY TRANSLATION

The consolidated financial statements are presented in United States Dollar (‗US$‘), which is the functional
currency of the parent company, India Hospitality Corp., being the currency of the primary economic
environment in which it operates.
In the separate financial statements of the consolidated entities, foreign currency transactions are translated into
the functional currency of the individual entity using the exchange rates prevailing at the dates of the
transactions (spot exchange rate). Foreign exchange gains and losses resulting from the settlement of such
transactions and from the translation of remaining monetary balances at year-end exchange rates are recognized
in the income statement profit or loss under ―other income‖ or ―other expenses‖, as applicable.
In the consolidated financial statements, all separate financial statements of subsidiaries, originally presented in a
currency different from the Group‘s presentation currency, have been converted into US$. Assets and liabilities
have been translated into US$ at the closing rate at the balance sheet date. Income and expenses have been
converted into the Group‘s presentation currency at the average of the daily exchange rates over the reporting
period. The resulting translation adjustments are charged/credited to other comprehensive income as ‗Exchange
differences on translating foreign operations‘ and recognized in the currency translation reserve in equity. On
disposal of a foreign operation the cumulative translation differences recognized in equity are reclassified to
profit or loss and recognized as part of the gain or loss on disposal. Goodwill and fair value adjustments arising
on the acquisition of a foreign entity have been treated as assets and liabilities of the foreign entity and translated
into US$ at the closing rate.
4.6. REVENUE RECOGNITION

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Group and the
revenue can be reliably measured. Revenue is measured at the fair value of the consideration received, excluding
discounts, rebates, and other sales taxes or duty. The following specific recognition criteria are met before
revenue is recognized:

March 31, 2010
Sale of goods
Revenue from the sale of goods is recognized when the significant risks and rewards of ownership of the goods
have passed to the buyer, usually on acceptance of the goods and other revenue recognition criteria is met.
Rendering of services
Revenue from rendering of services includes Handling Income, Transportation Income and Laundry Income.
Revenue is recognized on these when the services are rendered to the customers.
Dividends
Revenue is recognized when the Group‘s right to receive the payment is established.
Finance income
Interest income and expenses are reported on an accrual basis using the effective interest method. Dividend
income, other than those from investments in associates, are recognized at the time the right to receive payment
is established.
4.7. PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment are stated at cost, excluding the costs of the day-to-day servicing, less
accumulated depreciation and accumulated impairment losses. Such cost includes the cost of replacing part of
such plant and equipment when it is probable that future economic benefits associated with such items will flow
to the Group and that the cost can be measured reliably.
An item of property, plant and equipment is derecognized upon disposal or when no future economic benefits
are expected from its use or disposal. Any gain or loss arising on de-recognition of the asset (calculated as the
difference between the net disposal proceeds and the carrying amount of the asset) is included in the profit or
loss statement in the year the asset is derecognized. The asset‘s residual values, useful lives and methods are
reviewed, and adjusted if appropriate, at each financial year end.
Capital work in progress

Capital work in progress includes assets under construction and capital advances.
Depreciation
Depreciation on property plant and equipment is calculated on a straight-line basis over the estimated useful life
of the asset less estimated residual value of property plant and equipment.
The useful lives of the assets are taken as follows: -
Buildings 60 years
Plant and machinery 8 years
Kitchen equipments 8 years
Computers 4 years
Electrical fitting 7 years
Furniture and fixtures 7 years
Commercial vehicles 7 years
Motor vehicles 5 years
Office equipments 3 years
Leasehold improvements Primary lease period or the useful life whichever is lower

March 31, 2010
As no finite useful life for land can be determined, related carrying amounts are not depreciated
4.8. BORROWING COSTS

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which
are assets that necessarily take a substantial period of time to get ready for their intended use, are added to the
cost of those assets, until such time as the assets are substantially ready for their intended use.
All other borrowing costs are recognized in profit or loss in the period in which they are incurred.
4.9. INTANGIBLE ASSETS

Intangible assets acquired separately are measured on initial recognition at cost. Following initial recognition,
intangible assets are carried at cost less any accumulated amortization and any accumulated impairment losses.
Intangible assets include brand name, catering agreements; non compete agreement and concession agreements
acquired through business combination.
Intangible assets are amortized over the useful economic life and assessed for impairment whenever there is an
indication that the intangible asset may be impaired. The amortization period and the amortization method for
an intangible asset with a finite useful life are reviewed at each financial year end. Changes in the expected useful
life or the expected pattern of consumption of future economic benefits embodied in the asset is accounted for
by changing the amortization period or method, as appropriate, and treated as changes in accounting estimates.
The amortization expense on intangible assets with finite lives is recognized in profit or loss in the expense
category consistent with the function of the intangible asset. These assets are currently amortized and are
included within ‗administrative expenses‘ as 'depreciation, amortization and impairment of non-financial assets'.
Certain intangible assets have an indefinite life and are evaluated for impairment tests at each reporting period.
The estimated useful lives of the intangibles are given as follows: -
Designs 5 years
Customer contracts 5-20 years
Trade names Indefinite life
Non compete agreement 7 years
4.10. GOODWILL
Goodwill represents the excess of the acquisition cost in a business combination over the fair value of the
group's share of the identifiable net assets acquired. Goodwill is carried at cost less accumulated impairment
losses. Refer to Note C for a description of impairment testing procedures.
4.11. IMPAIRMENT OF GOODWILL, OTHER INTANGIBLE ASSETS AND PROPERTY,

PLANT AND EQUIPMENT
The Group‘s intangible assets, goodwill on acquisition and property, plant and equipment are subject to periodic
impairment testing.
For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are largely
independent cash inflows (cash-generating units). As a result, some assets are tested individually for impairment
and some are tested at cash-generating unit level. Goodwill is allocated to those cash-generating units that are
expected to benefit from synergies of the related business combination and represent the lowest level within the
Group at which management monitors goodwill.
Cash-generating units to which goodwill has been allocated are tested for impairment at least annually. All other

March 31, 2010
individual assets or cash-generating units are tested for impairment whenever events or changes in circumstances
indicate that the carrying amount may not be recoverable.
An impairment loss is recognized for the amount by which the asset's or cash-generating unit's carrying amount
exceeds its recoverable amount. To determine the recoverable amount, the Group's management estimates
expected future cash flows from each cash generating unit and determines a suitable interest rate in order to
calculate the present value of those cash flows. The data used for the Group's impairment testing procedures are
directly linked to the Group's latest approved budget, adjusted as necessary to exclude the effects of future
reorganizations and asset enhancements. Discount factors are determined individually for each cash-generating
unit and reflect their respective risk profiles as assessed by the Group‘s management.
Impairment losses for cash-generating units reduce first the carrying amount of any goodwill allocated to that
cash-generating unit. Any remaining impairment loss is charged pro rata to the other assets in the cash-
generating unit. With the exception of goodwill, all assets are subsequently reassessed for indications that an
impairment loss previously recognized may no longer exist. An impairment charge that has been recognized is
reversed if the cash-generating unit‘s recoverable amount exceeds its carrying amount.
4.12. FINANCIAL ASSETS

Financial assets are divided into categories such as loans and receivables, financial assets at fair value through
profit or loss, available-for-sale financial assets and held-to-maturity investments. Financial assets are assigned to
the different categories by management on initial recognition, depending on the purpose for which the
investments were acquired.
De-recognition of financial assets occurs when the rights to receive cash flows from the instruments expire or
are transferred and substantially all of the risks and rewards of ownership have been transferred. An assessment
for impairment is undertaken at least at each balance sheet date, whether or not there is objective evidence that a
financial asset or a group of financial assets is impaired.
In the case of impairment, any loss previously recognized in equity is transferred to profit or loss. Losses
recognized in profit or loss on equity instruments are not reversed through profit or loss. Losses recognized in
prior period consolidated income statements resulting from the impairment of debt securities are reversed
through profit or loss.
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted
in an active market and are initially recognized at fair values. They arise when the Group provides money, goods
or services directly to a debtor with no intention of trading the receivables. Loans and receivables are
subsequently measured at amortized cost using the effective interest method, less provision for impairment. Any
change in their value is recognized in profit or loss.
Trade receivables are provided against when objective evidence is received that the Group will not be able to
collect all amounts due to it in accordance with the original terms of the receivables. The amount of the write-
down is determined as the difference between the asset‘s carrying amount and the present value of estimated
future cash flows.
4.13. FINANCIAL LIABILITIES

The Group‘s financial liabilities include trade and other payables and borrowings, which are measured at
amortized cost using effective interest rate method. They are included in balance sheet line items ‗Interest
bearing loans and borrowings, net of current portion‘ and ‗trade and other payables‘.
Financial liabilities are recognized when the Group becomes a party to the contractual agreements of the
instrument. All interest related charges is recognized as an expense in ―finance cost‖ in profit or loss.
Trade payables are recognized initially at their fair value and subsequently measured at amortized cost less

March 31, 2010
settlement payments.
4.14. INVENTORIES
Inventories comprise food and provision, packing and other materials and are valued at the lower of cost and net
realizable value. Costs incurred in bringing each product to its present location and conditions are included on a
weighted average cost basis. Net realizable value is the estimated selling price in the ordinary course of business,
less estimated costs of completion and the estimated costs necessary to make the sale.
4.15. ACCOUNTING FOR INCOME TAXES

Current income tax assets and/or liabilities comprise those obligations to, or claims from, fiscal authorities
relating to the current or prior reporting period, that are unpaid at the balance sheet date. Deferred income taxes
are calculated using the liability method on temporary differences. Deferred tax is generally provided on the
difference between the carrying amounts of assets and liabilities and their tax bases. Deferred tax is, however,
neither provided on the initial recognition of goodwill, nor on the initial recognition of an asset or liability unless
the related transaction is a business combination or affects tax or accounting profit. Deferred tax on temporary
differences associated with shares in subsidiaries and joint ventures is not provided if reversal of these
temporary differences can be controlled by the group and it is probable that reversal will not occur in the
foreseeable future.
In addition, tax losses available to be carried forward as well as other income tax credits are assessed for
recognition as deferred tax assets.
Deferred tax assets and liabilities are calculated, without discounting, at tax rates that are expected to apply to
their respective period of realization, provided they are enacted or substantively enacted at the balance sheet
date. Deferred tax liabilities are always provided for in full. Deferred tax assets are recognized to the extent that it
is probable that they will be able to be offset against future taxable income. The Group's management bases its
assessment of the probability of future taxable income on the Group's latest approved budget forecast, which is
adjusted for significant nontaxable income and expenses and specific limits to the use of any unused tax loss or
credit. The specific tax rules in the numerous legislations the Group operates in are also carefully taken into
consideration. If a positive forecast of taxable income indicates the probable use of a deferred tax asset,
especially when it can be utilized without a time limit, that deferred tax asset is usually recognized in full. The
recognition of deferred tax assets that are subject to certain legal or economic limits or uncertainties is assessed
individually by the Group's management based on the specific facts and circumstances.
Changes in deferred tax assets or liabilities are recognized as a component of tax expense in profit or loss, except
where they relate to items that are charged or credited directly to equity in which case the related deferred tax is
also charged or credited directly to equity.
4.16. CASH AND CASH EQUIVALENTS

Cash and cash equivalents comprise cash on hand and demand deposits, together with other short-term, highly
liquid investments that are readily convertible into known amounts of cash and which are subject to an
insignificant risk of changes in value.
4.17. LEASING ACTIVITIES

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and
rewards of ownership to the lessee. All other leases are classified as operating leases.
Rental expense from operating leases is recognized on a straight-line basis over the term of the relevant lease.

March 31, 2010
Finance costs, which represent the difference between the total leasing commitments and the fair value of the
assets acquired, are charged to profit or loss over the term of the relevant lease so as to produce a constant
periodic rate of charge on the remaining balance of the obligations for each accounting period.
4.18. EQUITY
Share capital is determined using the nominal value of shares that have been issued.
Additional paid-in capital includes any premium received on the initial issue of share capital. Any transaction
costs associated with the issue of shares is deducted from additional paid-in capital and stock based
compensation costs, net of any related income tax benefits.
Foreign currency translation differences are included in the translation reserve.
Accumulated earnings include all current and prior period results, as disclosed in profit or loss.
4.19. EMPLOYEE BENEFITS

Employee benefits are provided through a defined benefit plan as well as certain defined contribution plans.
The Group provides for gratuity, a defined benefit plan, which defines an amount of pension benefit that an
employee will receive on termination or retirement, usually dependent on one or more factors such as age, years
of service and remuneration. The legal obligation for any benefits from this kind of plan remains with the
Group.
The Group also provides for provident fund benefit, a defined contribution plan, under which the Group pays
fixed contributions into an independent entity. The Group has no legal or constructive obligations to pay further
contributions after payment of the fixed contribution.
The liability recognized in the balance sheet for defined benefit plans is the present value of the defined benefit
obligation (DBO) at the balance sheet date less the fair value of plan assets, together with adjustments for
actuarial gains or losses and past service costs. The DBO is calculated annually by independent actuaries using
the projected unit credit method. The present value of the DBO is determined by discounting the estimated
future cash outflows using interest rates of high quality corporate bonds that are denominated in the currency in
which the benefits will be paid and that have terms to maturity approximating to the terms of the related
pension liability.
Actuarial gains and losses are recognized as an income or expense in the period in which they arise. Past-service
costs are recognized immediately in profit or loss, unless the changes to the plan are conditional on the
employees remaining in service for a specified period of time (the vesting period). In this case, the past service
costs are amortized on a straight-line basis over the vesting period.
The contributions recognized in respect of defined contribution plans are expensed as they fall due. Liabilities
and assets may be recognized if underpayment or prepayment has occurred and are included in current liabilities
or current assets as they are normally of a short-term nature.
Interest expenses related to pension obligations are included in ―finance costs‖ in profit or loss. All other
pension related benefit expenses are included in ―Employee benefit expense‖.
Short-term employee benefits are recognized for the number of paid leave days (usually holiday entitlement)
remaining at the balance sheet date. They are included in employee obligations at the undiscounted amount that
the Group expects to pay as a result of the unused entitlement. Paid leave days which are likely to be encashed
at the time of retirement are valued at the rates at which they are estimated to be paid out, and the present value
of the same is included under ‗Long term Employee obligations‘.

March 31, 2010
4.20. PROVISIONS AND CONTINGENT LIABILITIES
Provisions are recognized when present obligations will probably lead to an outflow of economic resources from
the Group and they can be estimated reliably. Timing or amount of the outflow may still be uncertain. A present
obligation arises from the presence of a legal or constructive commitment that has resulted from past events.
Provisions are measured at the estimated expenditure required to settle the present obligation, based on the most
reliable evidence available at the balance sheet date, including the risks and uncertainties associated with the
present obligation.
In those cases where the possible outflow of economic resource as a result of present obligations is considered
improbable or remote, or the amount to be provided for cannot be measured reliably, no liability is recognized in
the consolidated balance sheet.
4.21. SHARE BASED PAYMENTS

All goods and services received in exchange for the grant of any share-based remuneration are measured at their
fair values. These are indirectly determined by reference to the fair value of the shares or share options awarded.
Their value is appraised at the grant date has considered market conditions and excludes the impact of any non-
market vesting conditions (for example, profitability and sales growth targets).
All share-based remuneration is ultimately recognized as an expense in statement of income or as allocable to
issue of shares and costs of business combination with a corresponding credit to additional paid-in capital, net
of deferred tax where applicable.
If vesting periods or other vesting conditions apply, the expense is allocated over the vesting period, based on
the best available estimate of the number of share options expected to vest. Non-market vesting conditions are
included in assumptions about the number of options that are expected to become exercisable. Estimates are
subsequently revised, if there is any indication that the number of share options expected to vest differs from
previous estimates. Any cumulative adjustment prior to vesting is recognized in current period.
Upon exercise of share options, the proceeds received net of any directly attributable transaction costs up to the
nominal value of the shares issued are allocated to share capital with any excess being recorded as additional
paid-in capital.
4.22. OPERATING SEGMENTS

In identifying its operating segments, management generally follows the Group's service lines, which represent
the main products and services provided by the Group.
The activities undertaken by the operating segments of the company is as given below:
 Air Catering: SkyGourmet acquired by the Group is identified as an independent business segment offering
air catering services. SkyGourmet also provides handling, stores management, transportation of meals,
loading/unloading of goods and other consumable and ancillary services however these services directly
related and covered under the original meals supply contract and relates air catering.
 Hotels: Currently this segment represents independent operations of Gordon House Hotel located at
Mumbai and the recently acquired ‗You‘ Band. The Gordon House Hotel is a modern boutique providing
state of art facilities.
 Restaurants and others: This segment comprises of operating speciality restaurants, chain of patisserie,
cake shops and food courts.
Each of these operating segments is managed separately as each of these service lines requires different set of
assets and other resources as well as marketing approaches. All inter-segment transfers are carried out at arm's
length prices.

March 31, 2010
The measurement policies the Group uses for segment reporting under IFRS 8 are the same as those used in its
financial statements, except that:
 Employee defined benefit expenses;
 expenses relating to share-based payments;
 fair value adjustments (relating to initial business combination accounting) and related impact on profit or
loss
are not included in arriving at the operating profit of the operating segments.
In addition, corporate assets which are not directly attributable to the business activities of any operating
segment are not allocated to a segment. In the financial periods under review, this primarily applies to the
Group's headquarters in Mumbai.
There have been no changes from prior periods in the measurement methods used to determine reported
segment profit or loss. No asymmetrical allocations have been applied between segments.
5. STANDARDS AND INTERPRETATIONS NOT YET APPLIED

The following new Standards and Interpretations which are yet to become mandatory, have not been applied in
the Group‘s consolidated financial statements for the year ended March 31, 2010.
Standard or Interpretation Effective dates

IAS 27: Consolidated and separate financial statements (revised 2008) July 1, 2009
IFRS 3: Business combinations (revised 2008) July 1, 2009
IFRS 2: Group Cash Settled Share Based Transactions (Amendments to IFRS 2) January 1, 2010
IFRS 9: Financial Instruments – Recognition and Measurement January 1, 2013
IAS 27: Consolidated and separate financial statements (revised 2008)

The revised standard introduces changes to the accounting requirements for the loss of control of a subsidiary
and for changes in the Group's interest in subsidiaries. The Group‘s shareholding in subsidiaries has not changed
in the current period. Thus the adoption of this standard is not expected to have any effect on the consolidated
financial statements of the Group. However, if the Group dilutes its holding in any of the operating subsidiaries
in a future period, then the changes in the Group‘s interest in those subsidiaries would be recorded as a equity
transaction.
IFRS 3: Business Combinations (revised 2008) (effective from 1 July 2009)

The standard is applicable for business combinations occurring in reporting periods beginning on or after
July 1, 2009 and will be applied prospectively. The new standard introduces changes to the accounting
requirements for business combinations, but still requires use of the purchase method. In the current period the
Group has not made any new acquisitions. The new standard is not required to be applied to acquisitions made
by the Group prior to July 1, 2009. Thus, there is no effect on the existing acquired goodwill measured as per the
earlier version of IFRS 3.
IFRS 2: Group Cash Settled Share Based Transactions (Amendments to IFRS 2)

The Group does not currently have any cash settled transactions and the Management does not expect material
impacts on the Group‘s consolidated financial statements when the interpretation becomes effective.
IFRS 9: Financial Instruments – Recognition and Measurement

The IASB aims to replace IAS 39 Financial Instruments: Recognition and Measurement in its entirety by the end
of 2010, with the replacement standard to be effective for annual periods beginning January 1, 2013. IFRS 9 is
the first part of Phase 1 of this project. The main phases are:
Phase 1: Classification and Measurement

March 31, 2010
Phase 2: Impairment methodology
Phase 3: Hedge accounting
In addition, a separate project is dealing with de-recognition. Management has yet to assess the impact that this
amendment is likely to have on the financial statements of the Group. However, they do not expect to
implement the amendments until all chapters of the IAS 39 replacement have been published and they can
comprehensively assess the impact of all changes.
6. SIGNIFICANT MANAGEMENT JUDGEMENT IN APPLYING ACCOUNTING POLICIES

In the process of applying the Group‘s accounting policies, the following judgments have been made apart from
those involving estimations, which have the most significant effect on the amounts recognized in the financial
information. Judgments are based on the information available at each balance sheet date.
Deferred Taxes
Management estimates are required in determining provisions for income taxes, deferred tax assets and liabilities
and the extent to which deferred tax assets can be recognized. In particular, management judgment and estimates
are involved in the preparation of future projections of taxable income which determines whether or not a
deferred tax asset is recognized. If the final outcome of these matters differs from the amounts initially
recorded, differences will impact the income tax and deferred tax provisions in the period in which such
determination is made.
Impairment of financial assets
Management judgment is required in determining the extent of impairment, if any, on financial assets. These
judgments are made based on information available with the management about the counter-party‘s financial
position and their ability to make payments when they fall due. If the final outcome differs from the amounts
initially recorded, differences will impact the period in which such determination is made.
7. ESTIMATION UNCERTAINTY
The preparation of these consolidated financial statements are in conformity with IFRS and requires the
application of judgment by management in selecting appropriate assumptions for calculating financial estimates,
which inherently contain some degree of uncertainty. Management estimates are based on historical experience
and various other assumptions that are believed to be reasonable in the circumstances, the results of which form
the basis for making judgments about the reported carrying values of assets and liabilities and the reported
amounts of revenues and expenses that may not be readily apparent from other sources.
All accounting estimates and assumptions that are used in preparing the financial statements are consistent with
the Group's latest approved budged forecast, where applicable. Although these estimates are based on the best
information available to management, the actual results may differ from the judgments, estimates and
assumptions made by management, and will seldom equal the estimated results.
Information about significant judgments, estimates and assumptions that have the most significant effect on
recognition and measurement of assets, liabilities, income and expenses are discussed below.
Estimates of life of various tangible and intangible assets, allowance for uncollectable amounts, and assumptions
used in the determination of employee-related obligations represent certain of the significant judgments and
estimates made by management.
Impairment
An impairment loss is recognized for the amount by which the asset's or cash-generating unit's carrying amount
exceeds its recoverable amount. To determine the recoverable amount, management estimates expected future
cash flows from each cash-generating unit and determines a suitable interest rate in order to calculate the present
value of those cash flows. In the process of measuring expected future cash flows management makes
assumptions about future gross profits. These assumptions relate to future events and circumstances. The actual
March 31, 2010
results may vary, and may cause significant adjustments to the Group's assets within the next financial year. In
most cases, determining the applicable discount rate involves estimating the appropriate adjustment to market
risk and the appropriate adjustment to asset-specific risk factors.
The Group has incurred an impairment loss of US$ 3,322,995 (previous year: 1,916,810) on land (included in
property, plant and equipment) in order to reduce the carrying amount of land to its recoverable amount - Refer
note D.
The Group has also recorded an impairment loss of US$ 812,136 (previous year: Nil) on intangible assets such
as brand names, non-compete arrangements, etc.
Useful lives of depreciable assets
Management reviews the useful lives of depreciable assets at each reporting date, including those which are
stated to have an indefinite life. At March 31, 2010 management assesses that the useful lives represent the
expected utility of the assets to the Group. The carrying amounts are analyzed in Note D and Note E. Actual
results, however, may vary due to changes in market trends, etc, specifically in the restaurant business.
Post employment benefits
The cost of post employment benefits is determined using actuarial valuations. The actuarial valuation involves
making assumptions about discount rates, expected rate of return on assets, future salary increases, and mortality
rates. Due to the long term nature of these plans such estimates are subject to significant uncertainty. For net
employee liability at the end of the respective dates — Refer note Y.

March 31, 2010
8. BASIS OF CONSOLIDATION
The group companies which consolidate under India Hospitality Corp. comprise of the entities listed below:
Year End Date Holding Country of Effective
Name of the Entity Co. Incorporation Group Share-
holding (%)
India Hospitality Corp. (IHC) March 31, 2010 Cayman Island 100
IHC Mauritius (IHC M) March 31, 2010 IHC Mauritius 100
IHC Advisory Service Private Limited March 31, 2010 IHC India 100
(IHCA)
Mars Restaurants Private Limited (MRPL) March 31, 2010 IHC M India 100
SkyGourmet Catering Private Limited March 31, 2010 IHC M India 100
(SCPL)
New India Glass Private Limited March 31, 2010 SCPL India 98
Gordon House Estates Private Limited March 31, 2010 MRPL India 100
Navigate India Investments B.V March 31, 2010 IHC M Netherlands 100
IBEA Mars and GHH Holdings B.V March 31, 2010 IHC M Netherlands 100
S.C. Ventures Ltd March 31, 2010 IBEA Mauritius 100
Karia Investments B.V March 31, 2010 Navigate Netherlands 100
All of the above entities follow uniform accounting policies.

During the year the company has acquired IHC Advisory Services Private limited (formerly known as Crown
Jewels Private Limited) a shell company for a consideration of US$ 124. As this company was not carrying out
any business, the Group has not applied IFRS 3 in accounting for the acquisition of IHC Advisory Services
Private Limited.
The Group has transferred its interest in Gourmet Restaurants Private Limited (GRPL), a joint venture company
during the current year. MRPL held 49% stake in the joint venture till July 31, 2009 and the remaining 51%
shares were held by the Tendulkar family. Pursuant to the assumption of operating controls of the Indian
entities as discussed in Note B, MRPL has transferred its entire interest in GRPL to the Mars Catering Services
Private Limited and accordingly GRPL operations for 4 months period between April 1, 2009 and July 31, 2009
have been included in these condensed consolidated financial statements.
NOTE B. OPERATING CONTROL OF INDIAN SUBSIDIARIES
In August 2009, IHC assumed direct operating control of its Indian subsidiaries, after the disengagement of the
operating agreements between IHC's operating companies, MRPL and Sky Gourmet (together the "Operating
Companies") and Mars Catering Services Private Limited ("Mars Catering"), a company controlled by Mr. Sanjay
Narang, as of July 31, 2009.
IHC entered into the operating agreements with Mars Catering at the time of the reverse acquisition and re-
admission to AIM on July 24, 2007 and the operating agreements were scheduled to run for a minimum period
of two years.
As a part of the disengagement, the Group has agreed to the following:
 Management: Mr Sanjay Narang will be appointed the honorary non-executive chairman of Sky Gourmet,
the airline catering business, for a period of 2 years for the purpose of providing a smooth transition and
business continuity.
 Gordon House Brand: IHC, via its subsidiary MRPL, has also entered into a licence agreement with
Mr. Sanjay Narang whereby it has allowed the continued use of the Gordon House brand for the Hotel

March 31, 2010
Sahar, Mumbai, owned by Mr. Sanjay Narang, for a further period of 2 years at no cost. Additionally, the
Group has extended the existing agreement with Mr. Sanjay Narang for IHC to continue to directly manage
the operations of the Gordon House hotel in Colaba on the existing commercial terms.
 Restaurants: Following the disengagement of the Agreements, the restaurant locations being used by Not
Just Jazz by the Bay, Pizzeria Pasta Bar and Just around the Corner, owned by Mr. Sanjay Narang, have been
transferred back to Mr. Sanjay Narang as per the original contract on an as is where is basis and the group
has accordingly recorded US$ 0.2 million as an one time loss on transfer of the assets held and maintained at
these locations. MRPL also paid operating fees of US$ 0.5 million which was due to Mr. Sanjay Narang;
following the disengagement, these operating fees will not be incurred in the future.
IHC subsequently entered into an arrangement with Mr. Sanjay Narang whereby IHC franchised the
aforementioned restaurant brands to Mr. Sanjay Narang for a period of 1 year for a franchise fee @ 3% of
the net sales of each of these restaurants only for the initial three month period.
 Non Compete Agreement: As a result of the disengagement, Mr. Sanjay Narang and his affiliated entities
shall be bound by exclusivity, non-compete and non-solicit restrictions relating to Sky Gourmet for a period
of 2 years. This arrangement will enable the IHC management to continue to develop the existing airline
relationships alongside Mr. Sanjay Narang and for this relationship IHC has incurred a one time settlement
cost of US$ 1.9 million which is included in administrative expenses.
 Tendulkars (Gourmet Restaurants Private Limited): As a result of disengagement and the entity incurring
losses, MRPL has transferred its 49% stake in GRPL to Mars Catering at a nominal value. The diminution in
investment and cost were provided as at March 31, 2009 and accordingly at July 31, 2009 a net loss of
US$ 0.05 million on transfer of this interest has been included in administrative expenses.
NOTE C. GOODWILL
The carrying amount of goodwill is analyzed below:
Gross carrying amount March 31, 2010 March 31, 2009
Opening balance 23,843,420 30,922,539
Net exchange difference 3,715,591 (7,079,119)
Closing balance 27,559,011 23,843,420

March 31, 2010
For the purpose of annual impairment testing goodwill is allocated to the following cash generating units, which
are units expected to benefit from the synergies of the business combinations in which the goodwill arises.
Air catering business 20,002,091 17,305,347
Hotels 3,184,257 2,754,946
Restaurants 4,372,663 3,783,127
Goodwill allocation at year end 27,559,011 23,843,420
The recoverable amounts of the cash-generating units were determined based on value-in-use calculations,
covering a five-year forecast, followed by an extrapolation of expected cash flows for the units‘ remaining useful
lives using the growth rates stated below;
Particulars Growth rates Discount rates
March 31, March 31, March 31, March 31,
2010 2009 2010 2009
Air catering business 16.78% 23% 16.62% 15.26%
Hotels 19% 27% 18.66% 14.55%
Restaurants 15.68% 18% 18.66% 14.55%
The growth rates reflect the long-term average growth rates for the product lines and services of the cash-
generating units. The growth rates for all cash generating units are in line with the overall long-term average
growth rates for these industry segments in India. However, these growth rates are higher than the growth rate
of the economy when taken as whole due to the fact that these segments represent those with significant
potential for future growth considering the following factors:
 the aviation industry is instrumental in improving the overall connectivity across India and the opportunity
exists to create a world-class industry that will play a critical role in driving India‘s infrastructure
development;
 there is a great opportunity and significant scope growth of its highly scalable hotel model which is uniquely
positioned in a largely uncontested space where a majority of the inventory of rooms in India is of
independently operated and unbranded hotels; and
 the rapidly rising disposable incomes of the Indian urban consumer, where eating out constitutes the fastest
growing portion of consumer‘s discretionary spending.
The management believes that these growth estimates represent the best available input for forecasting this
growing market.

March 31, 2010
NOTE D. PROPERTY, PLANT AND EQUIPMENT, NET

Property, plant and equipment comprise the following:
Movement in costs for the year ended March 31, 2010

Costs April 1, Additions Disposals Exchange March 31,
2009 Impact 2010
Freehold land 24,654,8478 - - 3,943,256 28,598,104
Building 29,587,151 855,260 (60,048) 4,642,526 35,024,889
Leasehold Improvements 1,676,378 - (43,987) 258,964 1,891,355
Plant and Machinery 8,547,749 1,445,058 (186,939) 1,334,774 11,140,642
Electrical fitting 1,170,329 184,135 - 191,880 1,546,344
Kitchen equipments 4,347,310 649,329 - 710,971 5,707,610
Furniture and fixture 1,319,241 92,074 (30,893) 203,665 1,584,087
Computer 535,737 83,468 (16,000) 82,670 685,875
Motor vehicles 591,243 159,611 (300,669) 133,615 583,800
Commercial vehicles 3,092,629 827,151 - 524,836 4,444,616
Assets under construction 3,053,038 673,642 (3,053,038) - 673,642
78,575,653 4,969,728 (3,691,574) 12,027,157 91,880,964
Movement in costs for the period ended March 31, 2009

Costs April 1, Additions Disposals Exchange March 31,
2008 Impact 2009
Freehold land 32,043,612 - - (7,388,765) 24,654,847
Building 35,353,770 2,849,515 (56,680) (8,559,454) 29,587,151
Leasehold Improvements 1,198,412 896,872 (43,661) (375,245) 1,676,378
Plant and Machinery 7,829,485 2,880,665 (6,092) (2,156,309) 8,547,749
Electrical fitting 1,205,216 299,534 (20,355) (314,066) 1,170,329
Kitchen equipments 4,947,705 648,189 (15,404) (1,233,180) 4,347,310
Furniture and fixture 1,445,667 303,065 (63,152) (366,340) 1,319,241
Computer 444,537 225,046 (5,224) (128,621) 535,738
Motor vehicles 514,897 245,412 (23,684) (145,382) 591,243
Commercial vehicles 3,100,006 841,564 (30,999) (817,941) 3,092,630
Assets under construction 6,343,325 3,053,038 (6,343,325) - 3,053,038
94,426,632 12,242,900 (6,608,576) (21,485,303) 78,575,653

March 31, 2010
Movement in accumulated depreciation and impairment for the year ended March 31, 2010
Accumulated April 1, For the Disposals Exchange March 31,
depreciation and 2009 year Impact 2010
impairment
Freehold land 1,916,810 3,322,995 - - 5,239,805
Building 1,422,885 1,222,762 (38,061) 254,040 2,861,626
Leasehold Improvements 532,679 489,411 (25,546) 106,952 1,103,496
Plant and Machinery 1,499,942 1,417,512 (95,906) 243,866 3,065,414
Electrical fitting 392,433 343,675 - (14,265) 721,843
Kitchen equipments 996,154 689,596 - (56,548) 1,629,202
Furniture and fixture 343,445 256,884 (14,725) 51,209 636,813
Computer 209,724 155,079 (10,506) 37,081 391,378
Motor vehicles 167,613 148,060 (138,907) 26,592 203,358
Commercial vehicles 860,349 698,139 - 175,208 1,733,696
8,342,034 8,744,113 (323,651) 824,135 17,586,631
Movement in accumulated depreciation and impairment for the period ended March 31, 2009
Accumulated April 1, For the Disposals Exchange March 31,
depreciation and 2009 year Impact 2009
impairment
Freehold land - 1,916,810 - - 1,916,810
Building 518,385 1,220,803 (33,567) (282,736) 1,422,885
Leasehold Improvements 184,810 495,448 (43,661) (103,918) 532,679
Plant and Machinery 539,904 1,257,585 (864) (296,682) 1,499,943
Electrical fitting 113,285 353,275 (2,334) (71,793) 392,433
Kitchen equipments 451,449 763,152 (2,058) (216,389) 996,154
Furniture and fixture 189,856 245,749 (10,427) (81,733) 343,445
Computer 98,848 114,262 (5,224) 1,838 209,724
Motor vehicles 60,928 148,195 (10,985) (30,525) 167,612
Commercial vehicles 397,212 659,011 (7,462) (188,411) 860,350
2,554,676 7,174,290 (116,582) (1,270,349) 8,342,035

March 31, 2010
Net book value as at March 31, 2009 and 2010

March 31, March 31,
Net book value 2010 2009
Freehold land 23,358,299 22,738,038
Building 32,163,263 28,164,266
Leasehold Improvements 787,859 1,143,699
Plant and Machinery 8,075,228 7,047,807
Electrical fitting 824,501 777,896
Kitchen equipments 4,078,408 3,351,155
Furniture and fixture 947,274 975,796
Computer 294,497 326,014
Motor vehicles 380,442 423,630
Commercial vehicles 2,710,920 2,232,280
Assets under construction 673,642 3,053,038
74,294,333 70,233,619
The company has capitalised borrowing cost US$ 94,472 (previous year: US$ 183,092)
The borrowing costs have been capitalised at a rate of 14.00% per annum (Previous year: 12.75%)
Of the total depreciation expense, US$ 4,856,732 (Previous year: 4,702,839) is classified in direct operating
expenses and US$ 564,364 (Previous year: 551,382) is classified in administrative expenses.
Freehold land includes land in New Delhi which was acquired for the purpose of setting up a new ACU in New
Delhi and is held by the Company for future development as owner occupied property. As at March 31, 2010,
management has not commenced any activities on this land as the group has received an extension on the lease
of its existing ACU in New Delhi within the Delhi Airport premises. Considering the overall slump in real estate
prices in that region and the extension of the lease on the existing ACU in New Delhi, and the inability to obtain
necessary regulatory approvals for commercialization of this property, management carried out an impairment
evaluation on this asset, which resulted in a further reduction in its carrying value in the current year to the
recoverable amount of this asset.
The evaluation was done by an independent registered valuer and was based on the fair value of the land less
costs to sell this land as the Company does not have any identified plans for use of this asset. The fair value was
determined by reference to information on other market transactions and adjusted as required to make them
comparable.
The related impairment loss of US$ 3,322,995 (previous year: 1,916,810) is included within ‗administrative
expenses‘ as 'depreciation, amortization and impairment of non-financial assets' and allocated to the Air Catering
segment. Refer note DD.
Restrictions on titles and property, plant and equipment pledged as securities for respective loans is given in Note
N.

March 31, 2010
NOTE E. INTANGIBLE ASSETS, NET:
Intangible assets comprise of the following:
Designs Customer Trade Non Total
contracts names compete
agreement
Gross Carrying amount
Balance as at April 1, 2009 4,900,000 20,033,262 16,622,273 4,399,655 45,955,190
Additions - - 400,100 - 400,100
Net exchange differences - 3,119,935 3,092,125 685,192 6,897,252
Balance as at March 31,2010 5,300,000 23,153,197 19,714,398 5,084,847 53,252,542
Amortization and Impairment
Balance as at April 1, 2009 1,133,125 4,411,711 - 1,101,450 6,646,286
Amortization during the year 980,000 5,215,756 - 1,985,070 8,180,826
Impairment during the year - - 812,136 - 812,136
Net exchange differences - 394,181 - 105,846 500,027
Balance as at March 31,2010 2,113,125 10,021,648 812,136 3,192,366 16,139,275
Net carrying amount at March
31, 2010 2,786,875 13,131,549 19,302,362 1,892,481 37,113,267
Designs Customer Trade Non Total

contracts names compete
agreement
Gross Carrying amount
Balance as at April 1, 2008 4,900,000 25,979,003 21,555,655 5,705,444 58,140,102
Net exchange differences 5,945,741 4,933,382 1,305,789 12,184,911
Balance as at March 31,2009 4,900,000 20,033,262 16,622,273 4,399,655 45,955,191
Amortization and Impairment
Balance as at April 1, 2008 153,125 1,456,531 - 543,376 2,153,032
Amortization during the year 980,000 3,749,139 - 705,617 5,434,756
Net exchange differences - (792,371) - (149,131) (941,502)
Balance as at March 31,2009 1,133,125 4,411,711 - 1,101,450 6,646,286
Net carrying amount at March
31,2009 3,766,875 15,621,551 16,622,273 3,298,205 39,308,905
In June 2009, the Group entered into an agreement with Firstcorp Invesco Pvt Ltd (―Firstcorp‖) to acquire the
"You" brand from Firstcorp for a cash consideration of $400,100. Firstcorp is a company owned and controlled
by Mr. Ravi Deol (Director and CEO of IHC) and Mr. Sandeep Vyas (Chief Operating Officer and also a
Director of IHC). This brand has been recognised as an intangible asset in these consolidated financial
statements.
The amortization charge for the year has been included within ‗administrative expenses‘ as 'depreciation,
amortization and impairment of non-financial assets'.
Management estimates that trademarks have an indefinite life as these are associated with the core operations of
the business, i.e. hospitality, air catering and restaurants and do not contain any legal restrictions, which would
limit the life of these assets.
Management has carried out an impairment evaluation as at year end and recorded an impairment loss of
US$ 812,136 (previous year: Nil), which is included within ‗administrative expenses‘ as 'depreciation,
amortization and impairment of non-financial asset. Impairment loss of US$ 412,036 has been allocated to the
Restaurant segment and US$ 400,100 has been allocated to the Hotel segment.

March 31, 2010
As part of disengagement of operating agreements with Mr. Sanjay Narang (refer note B) the group has impaired
the non-compete arrangement for the restaurants business and recorded accelerated amortization on the non-
compete arrangement recognized for the air catering business. On account of the above change in estimate the
group has recorded an additional amortization of US$ 1,294,318. If the group had not changed the estimate the
losses of the group would have been lower by US$ 1,294,318.
NOTE F. OTHER FINANCIAL ASSETS - NON CURRENT

Other financial assets comprise of the following
Deposits 6,357,877 5,933,065
Other receivables 57,625 14,303
Total 6,415,502 5,947,368
These deposits are non-interest bearing and are generally deposited towards security for payments for assets
obtained on operating leases. All of the Group's receivables have been reviewed for indicators of impairment.
Certain receivables were found to be impaired and an allowance for credit losses of US$ 29,969 (Previous year:
US$ 478,853) has been recorded accordingly within ‗administrative expenses' as 'impairment of non-financial
assets'. The impaired receivables are due from an entity that is experiencing financial difficulties. The remaining
carrying values of these receivables are representative of their fair values at the respective balance sheet dates.
NOTE G. PREPAYMENTS AND ACCRUED INCOME- NON CURRENT

Prepaid lease rentals 3,624,742 3,716,08
Total 3,624,742 3,716,086
NOTE H. RESTRICTED CASH- NON CURRENT

Restricted cash comprise the following:
Government Authorities 2,215 1,917
Fixed deposits 318,286 222,666
Total 320,501 224,583
The group has given bank guarantees for performance of air catering units. These bank guarantees have been
given against fixed deposits pledged with the banks and the group is restricted to withdraw such funds until the
guarantees are valid. The carrying value of restricted cash is representative of their fair values at the respective
balance sheet dates.

March 31, 2010
NOTE I. INVENTORIES
Inventories comprise the following:
Food and Provisions 291,805 215,719
Packing and other materials 46,717 31,692
Raw materials 153,132 137,186
Share in joint venture - 30,486
Total 491,654 415,083
NOTE J. ACCOUNTS RECEIVABLE, NET

Trade receivables 11,531,629 8,818,010
Total 11,531,629 8,819,013
Trade receivables relate to catering, hotel and other food & provisions sales. These receivables are non-interest
bearing and are generally on 30 to 60 day‘s terms. The carrying values of these receivables are representative of
their fair values at the respective balance sheet dates. All trade receivables are subject to credit risk exposure.
Top customers account for following percentage of total accounts receivable.
Top three customers 9,927,914 86%
Others 1,603,715 14%
Total 11,531,629 100%
All of the Group's trade receivables have been reviewed for indicators of impairment. Certain trade receivables
were found to be impaired and an allowance for credit losses of US$ 146,376 (Previous year: US$ 3,950) has
been recorded accordingly within ‗administrative expenses'.
NOTE K. OTHER FINANCIAL ASSETS- CURRENT

Other financial assets comprise the following:
Other receivables 2,152,380 1,337,870
Other advances 247,392 172,187
Advance tax paid 2,477,741 1,762,872
Total 4,877,513 3,281,722

March 31, 2010
NOTE L. PREPAYMENTS AND ACCRUED INCOME- CURRENT
Other current assets comprise the following:
Pre payments 270,405 303,295
Total 270,405 303,295
NOTE M. CASH AND CASH EQUIVALENTS

Cash and cash equivalents comprise the following:
Cash in hand 52,948 37,062
Balance with banks 1,305,394 2,054,902
Share of cash held by joint venture - 10,217
Investment in highly liquid funds - 1,001,710
Total 1,358,342 3,103,891
Investment in highly liquid funds comprise of investments in liquid mutual funds.

NOTE N. LONG TERM DEBT
Long-term debts comprise the following:
Term loans from banks and others 37,172,720 28,882,757
Less: Current portion of long term debt 12,125,657 7,751,031
Total 25,202,019 21,131,726
Vehicle loans from banks 1,913,608 2,247,764

Less: Current portion of vehicle loans 1,315,296 1,128,305
Total 598,312 1,119,459
Net of current portion 25,645,376 22,251,185
Term loan from banks:

The term loan from banks is secured on immovable properties of the Company and movable property being
Plant and Equipment. The Loan is payable in 78 installments by 2015-16.
Of all immovable properties, Delhi land and Mumbai lower basement is freehold and rest all are pledged for the
term loan mentioned above. The Group has not created an equitable mortgage on leasehold land at Apollo
Bunder, Colaba, and hotel premises of Gordon House Hotel as required by the terms of the agreement with the
bank, as the creation of charge is pending receipt of ‗No objection Certificate‘ (N.O.C.) from Mumbai Port
Trust authorities, the lessor of the lease land. Due to this default, the bank had charged US$ 26,835 in the
previous year as penalty for non compliance with the specific covenants of the terms of financing.
Vehicle loans:
Vehicle loans are for the purchase of commercial vehicles and are secured by way of charge on those vehicles.
All of these loans are repayable in full within 3 or 4 years from the date on which these loans were availed.
Term Loan
An interest rate profile of long-term borrowings is charged on the monthly outstanding balances at prevailing
State Bank advance rate plus (1% to 1.25 %). The applicable interest rate as at March 31, 2010 was 14.00%.

March 31, 2010
The maturity profile of long-term borrowings outstanding at March 31, 2010 is given below:
Year ending 31 March, Amount
2011 – 12 4,189,499
2012 – 13 4,652,003
2013 – 14 7,242,509
2014 – 15 8,134,692
2015 – 16 1,426,673
Total 25,645,376
The fair value of long-term debt is estimated by the management to be approximate to their carrying value, since
the average interest rate on such debt is within the range of current interest rates prevailing in the market.
The Group during the year has had delays in the repayment of monthly term loan installments and interest
thereon which have been subsequently repaid as given below:
Delays in repayment of principal
Period Amount Due Date Date of Delay
Payment Days
April-09 88,613 05-May-09 29-Jun-09 55
May-09 121,843 05-Jun-09 01-Aug-09 57
June-09 121,843 05-Jul-09 27-Aug-09 53
July-09 121,843 05-Aug-09 29-Sep-09 55
August-09 121,843 05-Sep-09 30-Oct-09 55
September-09 121,843 05-Oct-09 10-Dec-09 66
October-09 121,843 05-Nov-09 28-Dec-09 53
November-09 121,843 05-Dec-09 28-Dec-09 23
December-09 121,843 05-Jan-10 09-Mar-10 63
January-10 121,843 05-Feb-10 18-Mar-10 41
February-10 121,843 05-Mar-10 27-Apr-10 53
March-10 121,843 05-Apr-10 29-May-10 54
Total 1,428,886

March 31, 2010
Delays in payment of interest

Period Amount Due Date Date of Delay
Payment Days
April-09 69,679 05-May-09 20-May-09 15
May-09 72,418 05-Jun-09 01-Aug-09 57
June-09 69,420 05-Jul-09 27-Aug-09 53
July-09 68,342 05-Aug-09 30-Oct-09 86
August-09 67,708 05-Sep-09 04-Dec-09 90
September-09 64,529 05-Oct-09 28-Dec-09 84
October-09 66,001 05-Nov-09 28-Dec-09 53
November-09 62,814 05-Dec-09 28-Dec-09 23
December-09 64,087 05-Jan-10 09-Mar-10 63
January-10 60,069 05-Feb-10 18-Mar-10 41
February-10 54,748 05-Mar-10 27-Apr-10 53
March-10 59,037 05-Apr-10 29-May-10 54
Total 778,852
Further the Group has renegotiated these payment terms for these outstanding debts and thereby these loans
have now been converted from 84 months period to 120 months term.
NOTE O. TRADE AND OTHER PAYABLES
Other liabilities comprise the following:
Particulars March 31,2010 March 31, 2009
Trade payables 9,346,008 7,182,946
Statutory liabilities 1,060,555 793,956
Payable to employees 1,064,444 910,304
Other liabilities 2,599,576 2,417,826
Total 14,070,583 11,305,032
NOTE P. EMPLOYEE BENEFIT OBLIGATIONS

Employee benefit obligations comprise the following:
Provision for compensated absences 217,289 272,893
Provision for gratuity benefit plan 296,138 301,305
Total 513,427 574,198

March 31, 2010
NOTE Q. TAXES
Taxes for the period comprise the following:
Deferred income tax benefit 2,150,270 1,301,729
Total 2,150,270 1,301,729
The relationship between the expected tax expense based on the applicable tax rate of the Company and the tax
expense actually recognized in profit or loss can be reconciled as follows:

Effective tax rate 33.99% 33.99%
Pre tax results (21,721,525) (15,504,946)
Expected tax expense at prevailing tax rate (7,383,144) (5,270,131)
Adjustment for tax-exempt income
- Loss of IHC 315,805 995,663
Adjustments for non-deductible expenses
- Unrecognized tax benefit on losses of subsidiaries 3,787,584 1,824,930
-Disallowed expenses - 253,826
-Impairment of asset 1,129,486 651,524
- Others - 242,459
Actual tax benefit 2,150,269 1,301,729
As there is no tax in BVI thus there is no tax liability for the Company. However the Group‘s operating entities
operate from India, therefore effective tax reconciliation is prepared using effective tax rate applicable in India.
The operating entities have carried forward tax losses of approximately US$ 6,064,174 on which deferred tax
assets have not been recognized. These losses can be carried forward for 8 years from the date of incurring
these losses and these losses are based on management‘s information from its tax returns and have not yet been
assessed by tax authorities in India.
The tax effect of significant temporary differences that resulted in deferred income tax assets and liabilities and a
description of the items that create those differences are given below:
Deferred income tax assets- Non current
Retirement benefits 170,548 189,450
Accruals 147,808 404,818
318,356 594,268
Deferred income tax liabilities – Non current

Difference in depreciation on Property, plant and equipment 2,562,317 3,219,022
Intangibles 11,130,565 12,081,732
13,692,882 15,300,754
The deferred tax assets are been created on retirement benefits/impairment for financial assets which
management considers will be available for adjustment in following years.
In assessing the reliability of deferred income tax assets, management considers whether it is more likely than
not that some portion or all of the deferred income tax assets will be realized. The ultimate realization of
deferred income tax assets is dependent upon the generation of future taxable income during the periods in

March 31, 2010
which the temporary differences become deductible. The amount of the deferred income tax assets considered
realizable, however, could be reduced in the near term if estimates of future taxable income during the carry
forward period are reduced.
NOTE R. EQUITY AND RESERVES

a) Ordinary shares
The Company presently has only one class of ordinary shares. For all matters submitted to vote in the
shareholders meeting, every holder of ordinary shares, as reflected in the records of the Company on the
date of the shareholders‘ meeting, has one vote in respect of each share held. All shares are equally eligible
to receive dividends and the repayment of capital in the event of liquidation of the Company.
The Company has an authorized share capital of 200,000,000 ordinary shares of US$ 0.001 each.
The Company was incorporated and registered in the Cayman Islands on May 12, 2006. On incorporation,
one subscriber share of $0.001 was issued at a price of $0.001. On May 30, 2006, 6,250,000 ordinary shares
were issued at a price of $0.001 and one subscriber share was repurchased by the Company at $0.001
b) Reserves
Additional paid in capital – The amount received by the company over and above the par value of shares
issued (share premium) is shown under this head.
Translation reserve - Assets and liabilities of foreign subsidiaries are translated into US$ at the rate of
exchange prevailing as at the Balance Sheet date. Revenue and expenses are translated into US$ by averaging
the exchange rates prevailing during the period. The exchange difference arising out of the year-end
translation is being debited or credited to Foreign Currency Translation Adjustment Account.
In consolidating the financial information of operating entities, whose functional currency is the Indian
Rupee, the assets and liabilities for each balance sheet presented have been translated to US$, the
presentation currency, at the closing rate at the date of that balance sheet. Income and expenses for each
statement of comprehensive income of these operating entities has been translated at average exchange rates
over the reporting period. All resulting exchange differences are recognized as a separate component of
equity.
Between the two balance sheet dates, there has been a significant movement in the INR/US$ exchange rates.
The rate of exchange of Indian Rupee to the USD has moved from Rs 52.71/USD as of March 31, 2009 to
Rs 45.14/USD as of March 31, 2010. In the comparative period, the rates moved from Rs 39.90/US$ as of
March 31, 2008 to Rs 52.17/US$ as of March 31, 2009. This has resulted in a significant translation gain of
US$ 17.48 million (previous year: loss of US$ 30.59 million), which has been credited/charged to other
comprehensive income and shown under currency translation reserve in equity.
Accumulated earnings – Accumulated earnings include all current and prior period results as disclosed in
statement of comprehensive income.

March 31, 2010
NOTE S. SHARE BASED PAYMENTS
In June 2009, the Company issued 1,873,000 ordinary shares of US$ 0.001 each ("Ordinary Shares") to the Chief
Executive Officer (CEO) and also a Director of IHC and 936,500 Ordinary Shares to the Chief Operating
Officer (COO) and also a Director of IHC at par value pursuant to share grant agreements entered into with
them.
The fair value of the shares has been determined based on the market price of the share prevailing at that date
of grant, US$ 0.40 per share and accordingly, a compensation cost of US$ 1,123,800 has been recorded under
‗administrative expenses‘, which reflects the aggregate fair value of the shares issued.
Additionally, per the Share Grant scheme the Company has agreed to issue further 1,873,000 Ordinary Shares to
the CEO and 936,500 Ordinary shares to the COO at par value, based on meeting certain share price targets and
other vesting conditions however the agreement does not specify a finite vesting period in which these vesting
conditions should be fulfilled.
The vesting conditions are as follows
Vesting Targets Total Share Grants to be allotted at each
Target Level
CEO COO
The date that shares trade no lower than
US$5.00/share for 20 consecutive trading days 523,597 261,798


TOTAL 751,826 375,913

The fair value of the share grants has been determined based on the market price of the share prevailing at that
date of US$ 0.40 per share
The Group has used the Binomial Distribution Method to arrive at the probability for the stock price reaching its
targets in determining the fair value of these share grants. The total fair value of the grants based on the above
probability is US$ 2,247,600. The related compensation expense is recorded over the estimated vesting period as
shown below:
Particulars Expected price level in US$
US$ 5 US$ 6.50 US$ 8.50
Period (years) 2.51 3.45 4.69
Accordingly, a compensation cost of US$ 300,767 has been recorded under ‗administrative expenses‘.
During the previous year, the Company had granted 15,750 shares to one of the directors in the Company.
Based on terms and conditions of his appointment, the Director was required to purchase 15,750 shares of the
Company at a price of US$ 0.001 per share.
The fair value of the shares has been determined based on the market price of the share prevailing at that date
of grant, US$ 6.35 per share and accordingly, a compensation cost of US$ 100,013 has been recorded under
‗administrative expenses‘, which reflects the aggregate fair value of the shares issued.

March 31, 2010
NOTE T. OPERATING REVENUE
Operating revenue comprises the following:
Particulars Year ended Year ended
March 31, 2010 March 31, 2009
Sale of Goods 29,781,616 29,286,002
Rendering of Services 5,926,292 5,462,942
Total 35,707,908 34,748,944
Top customers account for following percentage of total revenue.

Particulars Year ended %
March 31, 2010
Top three customers 14,702,610 41%
Others 21,005,298 59%
Total 35,707,908 100%
NOTE U. DIRECT OPERATING EXPENSES

Direct operating expenses for the period comprise the following:
March 31, 2010 March 31, 2009
Material consumed 11,096,261 10,447,833
Laundry charges 180,784 206,636
Commission on BOB 456,033 -
Cash Discount 34,031 -
Rent, hire charges and others 1,892,591 1,815,415
Rates and taxes 514,706 181,264
Gas and fuel 3,095,415 3,509,959
Labour and security charges 1,393,523 1,328,641
Vehicle expenses 682,384 610,080
Handling charges 532,628 562,809
Hygiene and sanitation 824,478 842,654
Repair and maintenance 813,498 830,034
Employee costs (Refer to Note Y) 5,460,093 5,407,948
Management fees - 691,086
Depreciation and amortization of non-financial assets (Refer to
Note D) 4,856,732 4,702,839
Total 31,833,157 31,252,317

March 31, 2010
NOTE V. ADMINISTRATIVE EXPENSES
Administrative costs comprise the following:
March 31, 2010 March 31, 2009
Rent 578,288 119,900
Rates and taxes 88,947 168,393
Auditors' remuneration 29,274 106,452
Repair and maintenance 96,254 64,503
Legal and professional fees 2,029,812 2,785,431
Depreciation, amortization and impairment of non financial
assets (Refer to Note D) 12,880,343 7,902,948
Printing and stationery 113,138 109,537
Water and electricity charges 603,888 586,908
Vehicle expenses 110,320 112,485
Service fees 2,921,839 764,622
Travelling and conveyance 503,903 464,853
Postage and telephone 182,106 195,016
Insurance 87,984 134,758
Donation 7,037 -
Employee costs (Refer to Note Y) 3,530,769 2,415,741
Sales and other taxes 32,190 25,013
Loss on sale of fixed assets 151,737 -
Impairment of financial assets 452,291 556,844
Other expenses 1,124,986 17,355
Total 26,946,863 16,553,857
NOTE W. SELLING EXPENSES

March 31, 2010 March 31, 2009
Advertisement 104,969 184,154
Total 104,969 184,154
NOTE X. JOINTLY CONTROLLED ENTITIES

As discussed in Note B above, the Group, pursuant to the disengagement agreement has transferred its interest
in Gourmet Restaurants Private Limited (―GRPL‖), the only jointly controlled entity. The financial statements
GRPL have been till the date of holding July 31, 2009 and subsequently the assets and liabilities have been
derecognized and transferred. The Group has recorded a net loss on transfer of US$ 108,891 (previous year:
US$ Nil) and in the current year these assets and liabilities are not incorporated into the Group‘s consolidated
financial statements as compared to the prior year where these were included using proportionate consolidation.
The aggregate amounts relating to GRPL that have been included in the previous consolidated financial
statements are as follows:
Non-current assets - 103,942
Current assets - 95,396

March 31, 2010
Non-current liabilities - 3,668

Current liabilities - 398,809
Income - 515,336
Expenses - 580,615
NOTE Y. EMPLOYEE BENEFITS
EMPLOYEE COSTS
Employee costs comprise the following:
Particulars Year ended Period ended
March 31, 2010 March 31, 2009
Salaries & allowances 8,039,104 6,748,064

Retirement benefit, contribution to provident & other funds 747,568 778,208
Staff welfare expenses 204,190 297,417
Total 8,990,862 7,823,689
Of the above US$ 5,460,093 (Previous year: 5,407,948) are included in direct operating expense and US$
3,530,769 (Previous year: US$ 2,415,741) in administrative expenses.
EMPLOYEE RETIREMENT BENEFITS
The following are the employee benefit plans applicable to the employees of the Group.
a) Gratuity benefit plan
In accordance with applicable Indian laws, the Group provides for gratuity, a defined benefit retirement plan
(―the Gratuity Plan‖) covering eligible employees. The Gratuity Plan provides for a lump sum payment to vested
employees on retirement, death, incapacitation or termination of employment of amounts that are based on
salary and tenure of employment. Liabilities with regard to the Gratuity Plan are determined by actuarial
valuation.
The following table sets out the funded status of the Gratuity Plan and the amounts recognised in the Group‘s
consolidated financial statements:
Change in Benefit Obligation
Present Benefit Obligation (‗PBO‘) on acquisition 301,305 232,520
Interest Cost 26,452 19,294
Service Cost 68,912 61,780
Benefits paid (37,191) (7,431)
Actuarial (gain)/ loss on obligations (107,708) 32,100
Exchange Difference 44,368 (36,958)
PBO at the end of the period 296,138 301,305
Liability recognized
Present Value of Obligation 296,138 301,305
Fair value of plan assets - -
Liability recognized in Balance Sheet (296,138) (301,305)

March 31, 2010
Net gratuity cost for the year ended March 31, 2010 included the following components:
Current Service Cost 68,912 61,780
Net actuarial (gain)/ loss recognized in the period (107,708) 32,100
(Income)/Expenses recognized in profit or loss (12,344) 113,174
The movement of the net liability can be reconciled as follows:

Movements in the liability recognized

Opening net liability 301,305 207,116
Expense as above (12,344) 113,174
Contribution paid (37,191) (7,431)
Exchange difference 44,368 (11,553)
Closing net liability 296,138 301,305
For determination of the liability, the following actuarial assumptions were used:
Discount Rate 8.00% 8.00%

Rate of increase in Compensation levels 5.00% 5.00%
Current service cost and interest cost are included in employee costs. All actuarial gains and losses have been
recognized in income statement under employee costs.
b) Provident fund benefit plan
Apart from being covered under the Gratuity Plan described earlier, employees of the Indian companies
participate in a provident fund plan; a defined contribution plan. The Group makes annual contributions based
on a specified percentage of salary of each covered employee to a government recognized provident fund. The
Group does not have any further obligation to the provident fund plan beyond making such contributions.
Upon retirement or separation an employee becomes entitled for this lump sum benefit, which is paid directly to
the concerned employee by the fund. The Group contributed approximately US$ 586,149 (Previous year: US$
573,974) to the provident fund plan during the year ended March 31, 2010.
c) Compensated absence plan
The Group permits encashment of leave accumulated by their employees on retirement, separation and during
the course of service. The liability for encashment of privilege leave is determined and provided on the basis of
actuarial valuation performed by an independent actuary at balance sheet date.
The following table sets out the status of the Compensated absence plan of the Group and the corresponding
amounts recognized in the Group‘s consolidated financial statements:
Change in Benefit Obligation
PBO at the beginning of the period 272,893 246,596
Service Cost 101,100 36,158
Benefits paid (94,942) (26,798)

March 31, 2010
Actuarial (gain) loss on obligations (128,283) 28,862
Exchange Difference 37,684 (33,473)
PBO at the end of the period 217,289 272,893
Liability recognized
Present Value of Obligation 217,289 272,893
Fair value of plan assets - -
Liability recognized in Balance Sheet (217,289) (272,893)
Net compensated absence cost for the year March 31, 2010 included the following components:
Current Service Cost 101,100 36,158
Net actuarial (gain)/ loss recognized in the period (128,283) 28,862
(Income)/Expense recognized in profit or loss 1,654 86,568
The movement of the net liability can be reconciled as follows:

Movements in the liability recognized
Opening net liability 272,893 246,596
Expense as above 1,654 86,568
Contribution paid (94,942) (26,798)
Exchange difference 37,684 (33,473)
Closing net Liability 217,289 272,893
The actuarial assumptions used in accounting for the Compensated absence plan were as follows:
Discount Rate 8.00% 8.00%

Rate of increase in Compensation levels 5.00% 5.00%
NOTE Z. SETTLEMENT OF WARRANTY CLAIMS

In December 2008, the Group had initiated a claim for indemnification against the Sellers pursuant to the SPA.
In May 2009, the Group resolved all outstanding disputes with the seller and a settlement agreement was
executed by the Group, the Group's subsidiary IHC Mauritius Corp. ("IHC Mauritius") and the Sellers. In terms
of this settlement, the Group received an amount of US$ 4.57 million of the amounts held in the Escrow
Account, which has been included in other income for the period ended September 30, 2009. During the period,
the Group took an additional loan of US$ 2.01 million (total loan of US$ 4 million) at 10% interest per annum
for a period of one year. The interest payable of these loans of US$ 149,643 is included in finance charges. This
entire outstanding loan amount of US$ 4 million is secured by creating a charge on the land owned by the
Group in Delhi and included in property, plant and equipment.
NOTE AA. OPERATING LEASES

The subsidiaries have entered into commercial leases for certain properties which are either cancelable or non-
cancellable. These leases have durations of 1 to 25 years with an option for renewal at the end of lease term. The
lease terms includes payment of revenue sharing which in the nature of lease rental is based on the specified
March 31, 2010
percentage of the revenue generated for using the property. As the revenue is variable every month this lease
rental is in the nature of contingent rent.
There are no restrictions placed upon the lessee under these operating lease agreements except under the ―In
Flight Kitchen (IFK) agreement‖ entered on 11 September 2006 to construct, implement, operate and maintain
in-flight kitchen facilities at Hyderabad Airport with rent payable of Rs.30/- per square meter per month with an
escalation clause of 5% every year. Under this lease no sale/transfer of shares of the SCPL shall be made by the
Group to any third party without the prior written consent of lessor.
Lease payments made and future minimum rentals payable under non-cancellable operating leases are as follows:
Lease payments made during the period 1,704,891 1,721,381
Minimum lease payments due not later than one year 1,027,590 755,581
later than one year but not later than five years 1,429,298 1,141,378
later than five years 2,109,078 2,283,721

March 31, 2010
NOTE BB. RELATED PARTY TRANSACTIONS
Related parties with whom the Group has transacted during the period
Key Management Personnel
Particulars
Ravi Deol
Sandeep Vyas
Raghavendra Agarwal
Ajay Mehra
Ajit Mathur
Sanjay Narang (ceased to be related party with effect August 1, 2009)
Arvind Ghei (ceased to be related party with effect August 1, 2009)
Patrick Rodrigues (ceased to be related party with effect August 1, 2009)
Jaswinder Singh(ceased to be related party with effect August 1, 2009)
Ramesh Joshee (ceased to be related party with effect August 1, 2009)
Enterprises over which significant influence exercised by key management personnel/ directors
Bullworker Pvt. Ltd (ceased to be related party with effect August 1, 2009)
Gourmet Restaurants Private Limited (ceased to be related party with effect August 1, 2009)
Mars Food Services (ceased to be related party with effect August 1, 2009)
Mars Enterprises(ceased to be related party with effect August 1, 2009)
Mars Corporation (ceased to be related party with effect August 1, 2009)
Mars Hotel & Resorts Private Limited(ceased to be related party with effect August 1, 2009)
Mars Catering Services Private Limited(ceased to be related party with effect August 1, 2009)
Gordon House Airport Hotels Pvt. Ltd (ceased to be related party with effect August 1, 2009)
Gordon House City Hotels Pvt. Ltd (ceased to be related party with effect August 1, 2009)
Gordon House Hotel & Resorts Pvt Ltd (ceased to be related party with effect August 1, 2009)
Gordon House Properties Private Limited (ceased to be related party with effect August 1, 2009)
Firstcorp Invesco Private Limited

March 31, 2010
Summary of transactions with related parties during the period
Nature of Transaction March 31, 2010 March 31, 2009
Transactions with key management personnel
Remunerations
Short term employee benefit
Ravi Deol 854,342 309,980
Sandeep Vyas 478,877 172,912
Others 415,702 724,694
Long term employee benefit

Defined contribution 29,984 53,095
Loan to Arvind Ghei - 1,725
Share based payments

Shares issued to key management personnel 1,123,800 99,997
Transactions with enterprises over which significant influence exercised by key

management personnel/ directors.
Sale of goods 119,418 233,594
Purchase of goods 73,158 -
Purchase of intangible assets 400,000 -
Rendering of other services 35,801 132,978
Service received 816,554 704,985
Deposits given - 9,250,527
Loans granted - 837
Amount payable at the period end - 169,186
Amount receivable at the period end - 1,533,163
The directors are covered under the Group‘s gratuity policy along with other employees of the Group.
Proportionate amount of gratuity is not included in the aforementioned disclosures.
NOTE CC. EARNINGS PER SHARE
The basic earnings per share for the year ended March 31 2010 and period ended March 31, 2009 have been
calculated using the net results attributable to shareholders of the Group as the numerator. None of the dilutive
shares relate to interest or similar expense recognizable in profit or loss for the year ended March 31, 2010 and
year ended March 31, 2009.
Diluted earnings per share amounts are calculated by dividing the net profit attributable to ordinary equity
holders of the parent by the weighted average number of ordinary shares outstanding during the period plus the
weighted average number of ordinary shares that would be issued on the conversion of all the dilutive potential
ordinary shares into ordinary shares.

March 31, 2010
Calculation of basic and diluted EPS is as follows:
Loss attributable to shareholders of the Group, for basic and dilutive (19,571,255) (14,203,217)
Weighted average numbers Shares outstanding during the year for
Basic 30,245,786 27,775,812
Effect of dilutive potential ordinary shares:
Warrants 32,518,884 22,104,167
Weighted average numbers Shares outstanding during the year for
Dilutive 62,764,670 17,540,864
Basic EPS, in US$ (0.65) (0.51)
Diluted earnings per share, in US$ (0.65) (0.51)
Dilutive shares have not been considered for calculation of dilutive earnings per share as these are anti dilutive in
nature.
NOTE DD. COMMITMENTS AND CONTINGENCIES

A summary of the contingencies existing as at period ended is as follows:
Counter guarantees given to bankers against guarantees issued by
them 239,794 250,106
Estimated amount of contracts remaining to be executed on capital
account and not provided for (net of advances) 96,721 15,028
Contingencies for unpaid disputed statutory dues, legal matter and
Others 5,323,341 1,219,256
The Company had entered into a Financing Agreement with Dynasty Developers Limited (‗Lessors‘) from which
the Company had leased land for Bangalore air-catering unit. The premise had been vacated pursuant to the
transfer of Bangalore airport in May 23, 2008.
Based on the terms of agreement the Lessors have demanded US$ 2,356,624 (Rs. 106.38 million) as full and final
settlement payment along-with applicable interest from the date the company has vacated the property till non
settlement of dues @14% per annum.
The company has acknowledged total liability of US$ 1,804,829 (Rs. 81.47 millions) and balance amount has not
been accepted. Management has obtained legal consultation on this matter and is of the opinion that the claim
of the Lessor is frivolous and thereby since the matter is currently in dispute no amounts other than those
already acknowledged and recorded in books of accounts have been ascertained or recorded as debts payable.

March 31, 2010
NOTE EE. SEGMENT REPORTING
Primary segments
Business segments: Year ended March 31, 2010
Air Catering Gordon House Restaurants Total
Unit Hotel and others
Revenue from external customers 2,190,961 4,788,287 28,728,660 35,707,908

Inter-segment revenues - - - -
Segment Revenue 2,190,961 4,788,287 28,728,660 35,707,908
Costs of material 246,732 2,106,974 8,745,823 11,099,528

Direct operating expenses 450,593 1,866,858 7,312,754 9,630,204
Employee remuneration 407,413 1,460,101 3,901,662 5,769,176
Depreciation and amortization 29,406 2,846,017 9,653,508 12,528,931
Administration and selling expenses 814,779 315,619 1,361,016 2,491,414
Segment operating profit/(loss) 242,038 (3,807,282) (2,246,103) (5,811,345)
Segment assets 99,359,567 16,891,413 11,912,609 12,163,590

Segment liabilities 36,358,895 6,129,627 988,688 43,477,209
Year ended March 31, 2009

Air Catering Gordon House Restaurants Total
Unit Hotel and others
Revenue from external customers 25,649,660 2,298,142 6,801,141 34,748,943

Inter-segment revenues - - - -
Segment Revenue 25,649,660 2,298,142 6,801,141 34,748,943
Costs of Material 7,381,321 331,789 2,651,891 10,365,001

Direct Operating Expenses 7,565,145 524,332 1,971,228 10,060,705
Employee Remuneration 3,686,132 368,483 1,195,207 5,249,821
Depreciation and Amortization 3,776,168 43,120 296,642 4,115,930
Administration & Selling expenses 1,046,127 378,890 731,726 2,156,743
Segment operating profit/(loss) 2,194,767 651,527 (45,553) 2,800,743
Segment assets 101,430,893 14,767,194 12,206,442 128,404,529

Segment liabilities 27,457,716 6,669,822 1,141,749 35,269,287

March 31, 2010
The totals presented for the Group's operating segments reconcile to the entity's key financial figures as
presented in its financial statements as follows:
Revenue 35,707,908 34,748,943
Total Segment revenue 35,707,908 34,748,943
Reconciling items:
Finance Income 697,955 628,402
Other corporate income:
Royalty Income 160,543 -
Income on settlement of warranty claim relating
to business combinations 4,565,756 -
Income from sale of investments - 256,718
Other miscellaneous income 604,533 528,322
Total Revenue 41,736,695 36,162,385
Profit and loss March 31, 2010 March 31, 2009

Segment operating (loss)/ profit (5,811,345) 2,800,743
Reconciling items:
Other corporate incomes:
Royalty Income 160,543 -
Income on settlement of warranty claim relating
to business combinations 4,565,756 -
Income from sale of investments - 256,718
Other miscellaneous income 604,533 528,322
Other corporate expenses:

Costs incurred on disengagement of operating
agreements 1,877,850 -
Losses incurred on transfer of assets in line with
disengagement of operating agreements 156,166 -
Senior management employee costs 3,236,621 2,695,843
Market study related expenses 893,000 -
Corporate office administration expenses 4,572,198 9,073,912
Depreciation, amortization and impairment on
corporate assets and intangibles 5,208,144 3,899,454
Group operating loss (17,846,249) (12,083,427)
Finance costs 4,573,231 3,599,299

Finance income 697,955 177,780
Group loss before tax (21,721,525) (15,504,946)
Assets March 31, 2010 March 31, 2009
Total Segments assets 128,163,590 128,404,529
Other assets:
Cash and cash equivalents 1,358,342 3,103,891
Surplus Land 17,589,423 15,524,885

March 31, 2010
Deferred Tax assets 318,356 5,94,268
Other corporate assets 20,745,537 12,163,676
Total assets 168,175,245 159,791,249
Liabilities March 31, 2010 March 31, 2009

Total Segments liabilities 43,477,209 35,269,287
Other liabilities:
Loans and other borrowings 5,397,704 2,879,928
Employee Retirement benefits 513,427 574,151
Deferred tax liability 13,692,883 15,300,754
Other corporate liabilities 4,282,004 4,286,381
Total Liabilities 67,363,227 58,310,501
Description of business segments

Air Catering: SkyGourmet acquired by the Group is identified as an independent business segment offering air
catering services. SkyGourmet also provides handling, stores management, transportation of meals,
loading/unloading of goods and other consumable and ancillary services however these services directly related
and covered under the original meals supply contract and relates air catering.
Hotels: Currently this segment represents independent operations of Gordon House Hotel located at Mumbai.
The Hotel is a modern boutique providing state of art facilities.
Restaurants and others: This segment comprises of operating speciality restaurants, chain of patisserie, cake
shops and food courts.
Description of Secondary segments

The Group has not presented geographical segments as its all operations are carried out in India.
NOTE FF. OTHER FINANCIAL ASSETS

Trade receivables comprise amounts receivable from the rendering of catering services. Other current assets
include unbilled income, prepayments, accrued interest and deposits and advances receivable in cash and kind.
The directors consider that the carrying amount of trade and other receivables approximates their fair value.
Bank balances and cash comprise cash and short-term deposits held by the group treasury function. The
carrying amount of these assets approximates their fair value.
The investments in short term included investment in daily dividend plan of reputed mutual funds, where the
carrying value represents fair value.
Given below is the summary of financial assets as categorized in IAS 39:

March 31, 2010
Particulars March 31 2010 March 31 2009

Non current assets
Loans and receivables 10,360,745 6,171,951
Current assets
Loans and receivables 16,679,547 12,404,029
Cash and cash equivalents 1,358,342 3,103,891
NOTE GG. OTHER FINANCIAL LIABILITIES

Trade and other payables principally comprise amounts outstanding for trade purchases and ongoing costs.
The directors consider that the carrying amount of trade payables approximates to their fair value.
Particulars March 31 2010 March 31 2009
Non current liabilities
Borrowings:
Financial liabilities at amortized cost 25,800,331 22,251,185
Current liabilities
Borrowings:
Trade payables:
NOTE HH. RISK MANAGEMENT OBJECTIVES AND POLICIES

The Group is exposed to a variety of financial risks which results from the Group‘s operating and investing
activities. The Group‘s risk management is coordinated its parent company, in close co-operation with the board
of directors and the core management team of the subsidiaries, and focuses on securing the Group‘s short to
medium term cash flows by minimizing the exposure to financial markets.
The Group does not engage in the trading of financial assets for speculative purposes nor does it write options.
Financial assets that potentially subject the Group to concentrations of credit risk consist principally of cash
equivalents, accounts receivables, other receivables, investment securities and deposits. By their nature, all such
financial instruments involve risk including the credit risk of non-performance by counter parties.
The Group‘s cash equivalents and deposits are invested with banks, whereas investment securities represent
investments in highly liquid securities traded actively on various stock exchanges.
The Group‘s trade and other receivables are actively monitored to review credit worthiness of the customers to
whom credit terms are granted and also avoid significant concentrations of credit risks.
The Group‘s interest-rate risk arises from long-term borrowings. Borrowings obtained at variable rates expose
the Group to cash flow interest-rate risk. Borrowings issued at fixed rates expose the Group to fair value
interest-rate risk.

March 31, 2010
Foreign Currency sensitivity
The operating currency of the subsidiaries being Indian Rupee (INR) most transactions are incurred in Indian
Rupees (INR). The subsidiaries incur transactions in Indian currencies only and hence no significant exposure to
currency exchange rate is noted.
Considering the exposure to currency exchange rate is not material, the currency sensitivity analysis is not
provided as part of this disclosure. However, there is a significant currency influence in the translation of
financial statements from INR to US$ for reporting purposes.
Interest rate sensitivity
The Group‘s policy is to minimize interest rate cash flow risk exposures on long-term borrowing. Vehicles
borrowings being at fixed rates, these are no sensitivity analysis on these. At March 31 2010, the Group is
exposed to changes in market interest rates through its long term bank borrowings, which are subject to variable
interest rates - see note 4.13 for further information.
The following table illustrates the sensitivity of the net result for the period and equity to a reasonably possible
change in interest rates of +1% and -1% (2009: +/-2%), with effect from the end of the year. These changes are
considered to be reasonably possible based on observation of current market conditions. The calculations are
based on the Group‘s consolidated financial instruments held at each balance sheet date. All other variables are
held constant.
March 31, 2010 March 31, 2009
+ 2% - 2% + 2% - 2%
Net results for the period (621,372) 621,372 (6,683,776) (6,597,633)
Credit risk analysis

The Group‘s exposure to credit risk is limited to the carrying amount of financial assets recognized at the
balance sheet date, as summarized below:
March 31, 2010 March 31, 2009
Highly liquid investments - 1,001,710
Cash & cash at bank 1,358,342 2,102,181
Trade receivables 11,531,629 8,819,013
Other receivables 5,147,918 240,967
The Group continuously monitors defaults of customers and other counterparties, identified either individually
or by the Group, and incorporates‘ this information into its credit risk controls. The Group‘s policy is to deal
only with creditworthy counterparties.
The Group‘s management considers that all the above financial assets that are not impaired for each of the
reporting dates under review are of good credit quality, including those that are past due.
None of the Group's financial assets are secured by collateral or other credit enhancements.
In respect of trade and other receivables, the Group‘s exposure to any significant credit risk exposure to any
single counterparty or any group of counterparties having similar characteristics refer note J.
The credit risk for liquid funds and other short-term financial assets is considered negligible, since the
counterparties are reputable banks with high quality external credit ratings.
Liquidity risk analysis
The Group manages its liquidity needs by carefully monitoring scheduled debt servicing payments for long-term
financial liabilities as well as cash-outflows due in day-to-day business. Liquidity needs are monitored in various
March 31, 2010
time bands, on a day-to-day and week-to-week basis, as well as on the basis of a rolling 30-day projection. Long-
term liquidity needs for a 180-day and a 360-day lookout period are identified monthly
The Group maintains cash and marketable securities to meet its liquidity requirements for up to 30-day periods.
Funding in regards to long-term liquidity needs is additionally secured by an adequate amount of committed
credit facilities and the ability to sell long-term financial assets.
As at March 31, 2010, The Group's liabilities have contractual maturities which are summarized below:
Current Non Current
Within 6 months 6 to 12 months 1 to 5 years More than 5 years
2010 2009 2010 2009 2010 2009 2010 2009
Term loan
from banks 4,926,949 2,710,041 3,942,290 5,040,990 23,775,346 21,131,726 1,426,673 -
Vehicle loan 674,832 676,982 640,464 451,323 598,312 1,119,459 - -
Trade payable 14,070,589 11,305,032 - - - - - -
Other short
term liabilities. 3,101,462 4,101,461 - - - - - -
The above contractual maturities reflect the gross cash out flows, not discounted at the current values thereby
these values will differ to the carrying values of the liabilities at the balance sheet date.
Further, based on management‘s analysis of the liquidity position at balance sheet date and future projections,
the company has renegotiated the repayment schedule on certain of its loans and also arranged additional loan
funds to manage its liquidity requirements.
NOTE II. CAPITAL MANAGEMENT POLICIES AND PROCEDURES

The Group's capital management objectives are:
 to ensure the Group's ability to continue as a going concern; and
 to provide an adequate return to shareholders.
by pricing products and services commensurately with the level of risk.
The Group monitors capital on the basis of the carrying amount of equity less cash and cash equivalents as
presented on the face of the balance sheet. Capital for the reporting periods under review is summarized as
follows:
March 31, 2010 March 31, 2009
Total equity 100,812,035 101,480,748
Less Cash & cash equivalents (1,358,342) (3,103,891)
Capital 99,453,693 96,945,340
Total equity 100,812,035 101,480,748

Add Borrowings 39,086,328 31,130,520
Overall financing 139,898,363 132,611,269
Capital to overall financing ratio 0.71:1 0.73:1.0
The Group's goal in capital management is to maintain a capital-to-overall financing structure ratio as low as
possible.

March 31, 2010
The Group sets the amount of capital in proportion to its overall financing structure, i.e. equity and financial
liabilities. The Group manages the capital structure and makes adjustments to it in the light of changes in
economic conditions and the risk characteristics of the underlying assets. In order to maintain or adjust the
capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital to
shareholders, issue new shares, or sell assets to reduce debt.
NOTE JJ. PREVIOUS YEAR FIGURES

Previous year figures have been re-grouped and/or re-classified to conform to the current period figures. There
have been no material reclassifications during the period.
NOTE KK. POST REPORTING EVENTS

 In order to meet temporary cash flow constraints, the group raised INR 250 million (approx US$ 5.60
million) short term loan from an Indian public sector bank.
 The Company issued further 1,873,500 and 936,500 ordinary shares respectively at par value to Mr. Ravi
Deol and Mr. Sandeep Vyas, which are subject to several restrictions.
 The loans granted by Gordon House Airport Hotels Private Limited amounting to INR 100 million
approximately US$ 2.02 million to Skygourmet Catering Private Limited and Navis Capital Partners to
IHC Mauritius amounting to US$2.01 million have fallen due for repayment on July 29, 2010. The group
is in discussion with the lenders to unwind the transaction.
 Name of Mars Restaurants Private Limited was changed to Red Planet Restaurants Private Limited
effective April 6, 2010.
NOTE LL. AUTHORISATION OF FINANCIAL STATEMENTS

The consolidated financial statements for the year ended March 31, 2010 (including comparatives) were
approved by the board of directors on September 29, 2010.
Ravi Deol Sandeep Vyas

Chief Executive Officer and Managing Director Chief Operating Officer

March 31, 2010
INDIA HOSPITALITY CORP.
Care of Ogier Fiduciary Servicers (Cayman) Limited

89,Nexus Way, Camana Bay,
Grand Cayman KYI-9007,Cayman Islands
website: www.indiahospitalitycorp.com

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INDIA HOSPITALITY CORP.

ANNUAL REPORT 2010

2. Operating Company Background:

a. Airline Catering Business 3

b. Restaurant and Hotel Business 4

4. Chief Executive Officer‘s Statement 6

6. Statement of Corporate Governance 10

9. Consolidated Financial Statements:

a. Independent Auditors Report 19

b. Consolidated Balance Sheet 21

c. Consolidated Statement of Comprehensive Income 23

d. Consolidated Statement of Changes in Shareholders‘ Equity 24

e. Consolidated Statement of Cash Flows 26

f. Notes to Consolidated Financial Statements 28

Annual Report 2009-2010 Page 1

Annual Report 2009-2010 Page 2

Airline Catering - SkyGourmet

Annual Report 2009-2010 Page 3

Food Services Division

Annual Report 2009-2010 Page 4

Year ended Year ended

Total Assets 168,175 159,791

Total Revenue 41,737 36,162

Exchange Difference on Translation 17,477 (30,593)

Total Comprehensive Income (2,093) (44,796)

Debt to Equity (Times) 0.39 0.31

Annual Report 2009-2010 Page 5

India - Macro Economic Outlook

Sky Gourmet – Airline catering

Hotels & Restaurants

Annual Report 2009-2010 Page 7

Annual Report 2009-2010 Page 8

Risk Mitigating Strategy

General Airline Industry Trends:

Receivable Risks: • Proactive management of

Loss of Key Customers:

Commodity Price Inflation Particularly Food Prices:

Annual Report 2009-2010 Page 9

The Board of Directors

Roles and Responsibilities of the Board of Directors

Annual Report 2009-2010 Page 10

Board Attendance 2009-10

24-Apr-09 25-Jun-09 17-Jul-09 29-Sep-09 10-Dec-09 17-Dec-09 18-Dec-09

*Richard Foyston resigned from the Board on 29 October 2009

Annual Report 2009-2010 Page 12

Independent Professional Advice

The Committees and its members are :

COMMITTEE MEMBER COMMITTEE

Annual Report 2009-2010 Page 13

ACCOUNTABILITY AND AUDIT

Statement of Directors’ Responsibility For Preparing The Financial Statements

Annual Report 2009-2010 Page 14

Relationship with Auditors

STATEMENT OF INTERNAL CONTROLS

Annual Report 2009-2010 Page 15

Mr. Ravi S. Deol

Mr. Sandeep Vyas

Mr. Anthony Juliano

Annual Report 2009-2010 Page 16

Annual Report 2009-2010 Page 17

India Hospitality Corp. Mumbai 400 004 – India

Annual Report 2009-2010 Page 18