Interim Results

RNS Number : 6653Y

India Hospitality Corp.

29 December 2010

 



India Hospitality Corp.

29 December 2010

Interim Results

India Hospitality Corp. (AIM: IHC) (the "Company" or "IHC") is pleased to announce its financial results for the half year ended 30 September 2010.

Post the period end, IHC divested 74% of its shareholding in Sky Gourmet Catering Private Ltd ("Skygourmet") to Gategroup Investments Singapore Pte. Ltd. (Gate Group). Ravi Deol, IHC's Chief Executive Officer, commented, "IHC has generated liquidity through this divestment and is now focusing on both organic and inorganic growth in the hospitality sector, which offers huge potential in a growing economy like India."

The Condensed Consolidated Interim Financial statements of the Company for the period ended 30 September 2010 are presented below and a full version of these is available on the Company's website www.indiahospitalitycorp.com. 

For Further Information Contact:

India Hospitality Corp.

Rajesh Mittal

[phone]

[e-mail]

www.indiahospitalitycorp.com

Nominated Adviser: Grant Thornton Corporate Finance

Fiona Owen / Robert Beenstock

[phone]

Broker: Execution Noble & Company Ltd.

James Bromhead

[phone]

Media Contact: Mutual Public Relations Ltd.

Harsh Wardhan

[phone]

About India Hospitality Corp.

During the period to which the interim accounts relate, the Company was present in airline catering and hotel & restaurant segments, through its India-based subsidiaries Wah Restaurants Private Limited (formerly Mars Restaurants Private Limited) ("Wah Restaurants") and SkyGourmet Catering Private Limited ("Skygourmet").

Chief Executive Officer's Statement

On behalf of India Hospitality Corp., the Board of Directors is pleased to report the Company's unaudited interim financial results for the period ended 30 September 2010.

Financial Highlights

·     Total Operating Revenue of USD 20.37 million, an increase of 19.79% over the same period last year

·     Revenue from Air Catering Unit increased by 26.50% over the same period last year

·     Revenue from Hotel Business increased by 19.24% over the same period last year

·     Revenue from Restaurant Business decreased by 16.05% over the same period last year due to the transfer of certain restaurants to Mars Enterprises as part of a disengagement

·     Operating loss of USD 1.58 million, a reduction of 62.89% in operating losses over the same period

Partial exit from Skygourmet - Airline catering

As announced on 11 November 2010, IHC, its wholly-owned subsidiary IHC Mauritius, Skygourmet and Gate Group entered into a share purchase agreement, pursuant to which IHC and IHC Mauritius sold 74% of the shares in Skygourmet to Gate Group (the "Sale"). The consideration for the Sale was USD 39 million in cash, subject to post-completion adjustment to take account of any movement in the net debt of Skygourmet between 30 September 2010 and 31 October 2010. This post-completion adjustment is currently being finalised. IHC Mauritius also received USD 1.5 million in connection with the sale of certain land in Delhi owned by Skygourmet.

Furthermore, as announced on 11 November 2010, IHC continues to hold 26% of the shares in Skygourmet, which are subject to 'Call' and 'Put' options exercisable by Gate Group and IHC as per the terms of a Shareholders' Agreement. Considering that the Company only exercises significant influence on Skygourmet and not control, this residual holding in Skygourmet will be accounted for as an associate using the equity method from the effective date of the transaction.

SkyGourmet continues to remain a dominant player in the domestic air catering business. The asset and capacity utilisation of the business has constantly increased and a number of measures for efficiency improvement and productivity enhancement were initiated by the IHC management team.

Use of Proceeds

The proceeds of the Sale will be used by IHC to continue to develop its hospitality and restaurant businesses and to pay a special interim divided which is currently being considered by the Board. Further announcements as regards this will be made by the Company in due course.

Hotels & Restaurants

With the continued growth and increasingly positive signals for the Indian economy over the recent months, the Directors believe that there is significant growth still to be made in the hotels and restaurant sector in India and the recent partial divestment of Skygourmet will allow the Company to expand in this growing sector.

During the period the Company has also increased the number of pastry shops under the brand 'Birdy's" to 33. The partnership agreement, through its Indian subsidiary (Gordon House Estates Pvt. Ltd), with Entertainment World Developers Pvt. Ltd ("EWDPL") to manage its 10 hotels, which was put on hold due to funding constraints, is proposed to be revived.

Concluding Remarks & Acknowledgements

The Directors remain optimistic about the growth of the hospitality sector in India and remain positive about the long term outlook of the Company.

The Directors wish to place on record their deep appreciation to employees at all levels for their hard work, dedication and commitment. The Directors would like to thank the shareholders for their support and look forward to achieving continued success together.

Ravi S. Deol

Chief Executive Officer and Managing Director

Condensed Consolidated Statement of Financial Position

(All amounts in USD, unless otherwise stated)

	As at September 30, 2010 (Unaudited)	As at September 30, 2009 (Unaudited)	As at March 31, 2010 (Audited)
Assets
Non current
Goodwill	27,712,492	25,895,374	27,559,011
Property, plant and equipment	61,375,404	73,995,026	74,294,333
Intangible assets	33,442,301	40,063,882	37,113,267
Deferred tax assets	318,356	594,268	318,356
Long term financial assets	3,307,845	3,720,910	3,682,367
Other assets	6,139,163	6,058,579	6,357,877
Restricted cash	315,604	304,277	320,501
Total non-current assets	132,611,165	150,632,320	149,645,712
Current
Inventories	570,297	415,382	491,654
Trade and other receivables, net	15,906,139	11,855,187	11,531,629
Other short term financial assets	4,945,863	4,043,848	4,877,513
Prepayments and accrued income	514,418	317,047	270,405
Cash and cash equivalents	1,749,095	3,070,349	1,358,342
Total current assets	23,685,812	19,701,813	18,529,543
Total assets	156,296,977	170,334,133	168,175,255
Liabilities and Equity
Current liabilities
Interest bearing loans and borrowings	20,251,756	9,897,106	13,285,997
Trade and other payables	14,613,412	13,384,914	14,070,583
Total current liabilities	34,865,168	23,282,020	27,356,580
Non current
Interest bearing loans and borrowings, net of current portion	24,076,949	26,558,185	25,800,331
Employee benefit obligations	581,598	593,553	513,427
Deferred tax liability	13,800,147	16,815,097	13,692,882
Total non current liabilities	38,458,694	43,966,835	40,006,640
Total liabilities	73,323,862	67,248,855	67,363,220

	As at September 30, 2010 (Unaudited)	As at September 30, 2009 (Unaudited)	As at March 31, 2010 (Audited)
Equity
Issued capital	33,718	30,908	30,909
Additional paid in capital	149,688,567	148,517,102	148,590,149
Stock compensation reserve	-	525,377	300,767
Translation reserve	(12,490,214)	(21,807,382)	(13,035,612)
Accumulated earnings	(54,258,956)	(24,180,727)	(35,074,178)
Total equity	82,973,115	103,085,278	100,812,035
Total liabilities and equity	156,296,977	170,334,133	168,175,255

 (The accompanying notes are an integral part of these condensed consolidated interim financial statements)

Condensed Consolidated Statement of Comprehensive Income

(All amounts in USD, unless otherwise stated)

	For period April 1, 2010 to September 30, 2010 (Unaudited)	For period April 1, 2009 to September 30, 2009 (Unaudited)
Revenues
Operating revenue	20,366,527	17,001,162
Finance and other income	639,103	4,759,330
Total	21,005,630	21,760,492
Expenses
Direct operating expenses	17,259,940	17,483,717
Administrative expenses	20,092,701	10,808,096
Selling expenses	37,128	40,434
Finance charges	2,800,612	2,034,640
Total	40,190,381	30,366,887
Loss before tax	(19,184,751)	(8,606,395)
Taxes
Current tax expense	-	-
Deferred tax charge/credit for the period	-	71,410
Loss for the period	(19,184,751)	(8,677,805)
Other Comprehensive Income: Exchange difference on translating foreign operations	545,398	8,706,205
Total comprehensive income/(loss) for the period attributable to the owners of India Hospitality Corp.	(18,639,353)	28,400
Loss per share
Basic	(0.60)	(0.29)
Diluted	(0.60)	(0.29)

(The accompanying notes are an integral part of these condensed consolidated interim financial statements)

Condensed Consolidated Statement of Changes in Equity

(All amounts in USD, unless otherwise stated)

	Equity attributable to shareholder's of India Hospitality Corp
	Number of shares	Common stock- Amount	Additional paid in capital	Stock compens-ation reserve	Translation reserve	Accum-ulated earnings	Total stockholder's equity
Balance as at April 1, 2009 (Audited)	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	2,809	1,047,943				1,050,752
Share based payments to directors				525,378	-	-	525,378
Transactions with owners	2,809,500	2,809	1,047,943	525,378	-	-	1,576,130
Loss for the year	-	-	-	-	-	(8,677,805)	(8,677,805)
Other comprehensive income:
Exchange differences on translation	-	-	-	-	8,706,205	-	8,706,805
Income tax relating to components of other comprehensive income	-	-	-	-	-	-	-
Total comprehensive income for the year	-	-	-	-	8,706,805	(8,677,805)	28,400
Balance as at September 30, 2009 (Unaudited)	30,907,750	30,908	148,517,102	525,378	(21,807,382)	(24,180,728)	103,085,278

	Equity attributable to shareholder's of India Hospitality Corp
	Number of shares	Common stock - Amount	Additional paid in capital	Stock compens-ation reserve	Translation reserve	Accum-ulated earnings	Total stockholder's equity
Balance as at April 1, 2010 (Audited)	30,907,750	30,909	148,590,149	300,767	(13,035,612)	(35,074,206)	100,812,007
Issue of shares to directors	2,809,500	2,810	1,098,418				1,101,228
Share based payments to directors	-	-	-	797,651	-	-	797,651
Transferred on vesting of shares	-	-	-	(1,098,418)	-	-	(1,098,418)
Transactions with owners	2,809,500	2,810	1,098,418	(300,767)	-	-	800,461
Loss for the year						(19,184,751)	(19,184,751)
Other comprehensive income:	-	-	-	-	-	-	-
Exchange differences on translation	-	-	-	-	545,398	-	545,398
Income tax relating to components of other comprehensive income	-	-	-	-	-	-	-
Total comprehensive income for the period	-	-	-	-	545,398	(19,184,751)	(18,639,353)
Balance as at 30 September 2010 (Unaudited)	33,717,250	33,718	149,688,567	-	(12,490,214)	(54,258,956)	82,973,115

(The accompanying notes are an integral part of these condensed consolidated interim financial statements)

Condensed Consolidated Statement of Cash Flows

(All amounts in USD, unless otherwise stated)

	For six months ended September 30, 2010 (Unaudited)	For six months ended September 30, 2009 (Unaudited))
Operating activities
Loss before tax	(19,184,751)	(8,606,395)
Adjustments for non cash items:
Depreciation, amortization and impairment	17,442,511	5,855,231
Interest expenses, net	2,797,735	2,034,640
Income on settlement of warranty claim relating to business combinations	-	(4,565,756)
(Profit)/ Loss on sale of asset, net	(3)	156,502
(Profit)/ Loss on sale of investments	(18,045)	-
Interest income, net	(173,542)	(2,173)
Dividend income	(4,283)	-
Expense for share based payments to directors	797,651	1,047,944
Provision for doubtful debts	36,202	-
Sundry Balance written back	(14,251)	-
Advances written off	2,400	-
Foreign exchange loss	19,159	-
Others	-	18,150
Net Changes in working capital
Increase/(decrease) in current liabilities	(1,536,774)	2,281,762
(Increase)/decrease in current assets	(2,608,530)	(2,522,181)
Net changes in operating assets and liabilities	(2,444,521)	(4,302,276)
Taxes refund/ (paid)	424,217	(60,235)
Cash used in operating activities	(2,020,304)	(4,362,511)
Investing activities
Interest received	176,144	2,636
Proceeds from sale of property, plant and equipment	14,091	61,200
Purchase of property, plant and equipment	(235,047)	(849,711)
Proceeds from sale of investments	18,045	95
Dividend received	4,283	-
Income on settlement of warranty claim relating to business combinations	-	4,565,756
Cash generated from / (used in) investing activities	(22,484)	3,779,976
Financing activities
Proceeds from issue of shares	2,810	2,809
Interest paid	(2,694,829)	(2,034,640)
Proceeds from long term borrowings (net)	4,790,787	2,625,113
Cash generated from / (used in) financing activities	2,098,768	593,282
Net increase in cash and cash equivalents	55,980	10,747
Effect of exchange rate changes on cash	334,772	(44,289)
Net increase/(decrease) in cash and cash equivalents during the period	390,752	(33,542)
Cash and cash equivalents at the beginning of the period	1,358,342	3,103,891
Cash and cash equivalents at the end of the period	1,749,096	3,070,349
Cash and cash equivalents comprise
Cash in hand	103,031	65,929
Balances with banks	623,264	3,004,420
Investment in highly liquid funds	1,022,801	-
	1,749,096	3,070,349

(The accompanying notes are an integral part of these condensed consolidated interim financial statements)

Notes to Condensed Consolidated Interim Financial statements

(All amounts in USD, unless otherwise stated)

NOTE A -       BACKGROUND INFORMATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

1. NATURE OF OPERATIONS

For the period under review, the Company was present in airline catering and hotel & restaurant segments, through its India-based subsidiaries Wah Restaurants Private Limited (formerly Mars Restaurants Private Limited) ("Wah Restaurants") and SkyGourmet Catering Private Limited ("SkyGourmet").

2. GENERAL INFORMATION

The Company was incorporated in the Cayman Islands on May 12, 2006 and its shares are publicly traded on the AIM market operated by the London Stock Exchange. As of September 30, 2010, the Company had subsidiaries incorporated in Mauritius, Netherlands and India. The Company expects to conduct business, including making acquisitions, through its Mauritius subsidiary.

These condensed consolidated interim financial statements have been approved by the Board of Directors on December 24, 2010.

3. BASIS OF PREPARATION

The condensed consolidated interim financial statements of the Company with its subsidiaries for the six month period ended September 30, 2010 and the relevant comparatives have been prepared in accordance with IAS 34 Interim Financial Reporting as developed and published by the International Accounting Standards Board ('IASB'). They do not include all of the information required in annual financial statements in accordance with IFRS, and should be read in conjunction with the consolidated financial statements of the Group for the period ended March 31, 2010. These condensed consolidated interim financial statements have been prepared on a going concern basis.

These condensed consolidated interim financial statements of the Group are prepared and presented in United States Dollars ("USD"), the Company's reporting currency. The Group has chosen to present the condensed consolidated statement of financial position, condensed consolidated statement of comprehensive income, condensed consolidated statement of cash flows and condensed consolidated statement of changes in equity along with selected explanatory notes (referred to as 'condensed consolidated interim financial statements').

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

These condensed consolidated interim financial statements have been prepared in accordance with the accounting policies adopted in the last annual financial statements for the period ended March 31, 2010.

5. BASIS OF CONSOLIDATION

The subsidiaries which consolidate under India Hospitality Corp.for the period under review comprise the entities listed below:

Name of the Entity	Period end date	Holding Co.	Country of Incorporation	Effective Group Share-holding (%)
India Hospitality Corp. (IHC)	September 30, 2010		Cayman Island	100
IHC Mauritius (IHC M)	September 30,2010	IHC	Mauritius	100
Wah Restaurants Private Limited (WRPL)	September 30, 2010	IHC M	India	100
SkyGourmet Catering Private Limited (SGCPL)	September 30, 2010	IHC M	India	100
IHC Advisory Services Private Limited (IHCA)	September 30, 2010	IHC	India	100
New India Glass Private Limited (NIGPL)	September 30, 2010	SGCPL	India	100
Gordon House Estates Private Limited (GHEPL)	September 30, 2010	MRPL	India	100
Navigate India Investments B.V	September 30, 2010	IHC M	Netherlands	100
IBEA Mars and GHH Holdings B.V	September 30, 2010	IHC M	Netherlands	100
S.C. Ventures Ltd	September 30, 2010	IBEA	Mauritius	100
Karia Investments B.V	September 30, 2010	Navigate	Netherlands	100

All of the above entities apply uniform accounting policies.

In consolidating the financial information of SGCPL WRPL, IHCA, NIGPL and GHEPL whose functional currency is the Indian Rupee, the assets and liabilities for each statement of financial position presented has been translated to USD, the presentation currency at the closing rate at the date of that statement of financial position, and income and expenses for each income statement have been translated at exchange rates at the dates of the transactions and all resulting exchange differences are recognized in the statement of comprehensive income. Between the dates of the two statements of financial positions, there has been a significant movement in the exchange rates of Indian Rupee to the USD from Rs 48.04/USD as of September 30, 2009 to Rs 44.89/USD as of September 30, 2010. 

NOTE B -       SIGNIFICANT EVENTS DURING THE PERIOD

1. Issue of shares to Directors

In May 2010 the Group received additional funding from Punjab National Bank ("PNB") for Rs. 250 million (approx USD 5.60 million) (the "Loan"). Under the terms and conditions of the Loan, PNB required that Mr. Ravi Deol and Mr. Sandeep Vyas, Directors of IHC, provide personal guarantees for the Loan. In order for Mr. Deol and Mr. Vyas to provide the personal guarantees for the Loan, the Company agreed to issue the remaining shares to Mr. Deol and Mr. Vyas per the Share Grant scheme as Conditional Shares on certain additional conditions.

Accordingly the Group has recorded a cost of USD 797,651, being the unamortized compensation based on the original grant date fair value of these instruments, as compensation for the share grant of 1,873,000 Ordinary Shares to Mr Deol and 936,500 Ordinary shares to Mr Vyas at par value and transferred the total balance in stock compensation reserve of USD 1,098,418 to additional paid in capital in accordance with IFRS 2 - Share Based Payments. The Company has determined that there is no incremental fair value to these shares that arises on the modification date and accordingly has not recognised any additional compensation cost. The total share based payments recognised in the Statement of Comprehensive income for the period is USD 797,651.

2. Impairment on Delhi Land

Freehold land includes land in New Delhi which was acquired by Skygourmet for the purpose of setting up a new ACU in New Delhi and was held by the Company for future development as owner occupied property. As at September 30, 2010, management had not commenced any activities on this land as the group had received an extension on the lease of its existing ACU in New Delhi within the Delhi Airport premises. Considering the inability to obtain necessary regulatory approvals for the commercialisation of this property, this land continued to be an unproductive asset. The ownership of this unproductive land also became a hurdle in the Company's efforts to obtain additional funding/investment from prospective investors. Besides, the land was mortgaged against loans from Gordon House Airport Hotels Pvt. Ltd. and Navis Capital Partners (collectively 'lenders'). During the current period, these loans had fallen due for repayment and the Company was under significant pressure from the lenders to make the repayments. Considering the significant liquidity constraints faced by the Company, and in view of these factors, the Company was forced to sell off the land subsequent to the period end, for a consideration of USD 3,881,121, resulting in a loss of USD 10,662,416 which has been recorded as an impairment loss for the period ended September 30, 2010, and disclosed as part of 'Administrative Expenses'.

NOTE C -       LOSS PER SHARE

The basic earnings per share for the six months ended September 30, 2010 and for the comparative period has been calculated using the net results attributable to shareholders of India Hospitality Corp. as the numerator. None of the dilutive shares relate to interest or similar expense recognisable in the income statement for the six months ended September 30, 2010 and the comparative period.

Calculation of basic and diluted EPS is as follows:

	Six months ended September 30, 2010	Six months ended September 30, 2009
Net results attributable to shareholders of India Hospitality Corp., for basic and dilutive	(19,184,751)	(8,677,805)
Weighted average numbers Shares outstanding during the period for Basic	32,043,092	29,612,925
Basic and Diluted EPS, in USD	(0.60)	(0.29)

NOTE D -     RELATED PARTY TRANSACTIONS

Related parties with whom the Group has transacted during the period

Key Management Personnel

Ravi Deol
Sandeep Vyas
Rajesh Mittal 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

Bullworker Pvt. Ltd	(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)
Firstcorp Invesco Private Limited

Summary of transactions with related parties during the period

Nature of Transaction	September 30, 2010	September 30, 2009
Transactions with key management personnel
Remuneration	702,318	616,450
Acquisition of intangible assets	-	400,100
Share based payments	797,651	1,047,944
Transactions with enterprises over which significant influence exercised by key management personnel till July 31, 2009
Sale of Goods	-	85,740
Rendering of other services	-	361,582
Services received	-	750,176
Loans and advances	-	1,156
Deposit given	-	8,957,122
Amount payable at the period end	-	271,084
Amount receivable at the period end	-	1,798,968

NOTE E -      SEGMENT REPORTING

Primary segments

During the six months ended September 30, 2010 the Group has not made any changes in the basis of segmentation or basis of measurement of segment profit or loss from the basis adopted for presentation of segment information in the last annual financial statements for March 31, 2010.

Business segments

6 months to 30 September 2010	Air Catering Unit	Gordon House Hotel	Restaurants and others	Total
Revenue from external customers	17,127,707	1,124,865	2,113,956	20,366,528
Inter-segment revenues	-	-	-	-
Segment Revenue	17,127,707	1,124,865	2,113,956	20,366,528
Costs of material	5,000,170	144,928	1,152,278	6,297,376
Direct operating expenses	4,165,261	527,853	744,135	5,437,249
Employee remuneration	2,266,901	228,610	220,381	2,715,892
Depreciation and amortization	5,806,096	13,360	235,460	6,054,916
Administration and selling expenses	1,101,004	103,723	238,371	1,443,098
Segment operating profit	(1,211,725)	106,391	(476,669)	(1,582,003)
Segment assets	118,864,249	14,841,769	12,319,121	146,025,138
Segment liabilities	25,005,531	147,607	1,012,906	26,166,044

6 months to 30 September 2009	Air Catering Unit	Gordon House Hotel	Restaurants and others	Total
Revenue from external customers	13,539,696	943,386	2,518,080	17,001,162
Inter-segment revenues	-	-	-	-
Segment Revenue	13,539,696	943,386	2,518,080	17,001,162
Costs of material	3,629,521	133,476	997,042	4,760,039
Direct operating expenses	4,211,062	351,657	1,118,341	5,681,060
Employee remuneration	2,265,822	196,631	1,224,341	3,686,794
Depreciation and amortization	4,093,897	358,825	676,720	5,129,442
Administration and selling expenses	1,488,438	80,617	438,179	2,090,404
Segment operating profit	(2,149,044)	(177,820)	(1,936,544)	(4,263,407)
Segment assets	125,790,133	14,487,041	13,061,844	153,339,018
Segment liabilities	31,381,980	341,153	1,149,778	32,872,913

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:

Particulars	6 months to 30 September 2010	6 months to 30 September 2009
Revenue
Total Segment revenue	20,366,528	17,001,162
Reconciling items:
Finance Income	450,716	2,173
Other corporate income:	188,386	-
Royalty Income	-	13,064
Income on settlement of warranty claim relating to business combinations	-	4,565,756
Other miscellaneous income	-	178,337
Total Revenue	21,005,630	21,760,492

Profit and loss	6 months to 30 September 2010	6 months to 30 September 2009
Segment operating loss	(1,582,003)	(4,263,407)
Reconciling items:
Other corporate incomes:
Royalty Income	-	13,064
Income on settlement of warranty claim relating to business combinations	-	4,565,756
Other miscellaneous income	188,386	180,514
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)
Share issue expenses	(797,651)	(1,573,320)
Senior management employee costs	(1,364,067)	(1,204,435)
Impairment of financial assets	(36,202)	-
Corporate office administration expenses	(1,855,724)	(1,603,347)
Depreciation/amortization/impairment on corporate assets and intangibles	(11,387,594)	(654,737)
Group loss before finance costs and tax	(16,834,855)	(2,034,640)
Finance costs	(2,800,612)	(2,034,640)
Finance income	450,716	2,173
Group loss before tax	(19,184,751)	(8,606,395)

Assets	6 months to 30 September 2010	6 months to 30 September 2009
Total Segments assets	146,025,138	153,339,018
Other assets:
Cash and cash equivalents	719,651	3,070,349
Surplus Land	3,817,379	10,920,325
Deferred Tax assets	318,356	2,410,164
Other corporate assets	5,916,453	594,268
Total assets	156,796,977	170,334,124

Liabilities	6 months to 30 September 2010	6 months to 30 September 2009
Total Segments liabilities	26,166,044	32,872,913
Other liabilities:
Loans and other borrowings	28,637,111	12,014,326
Employee Retirement benefits	581,598	593,553
Deferred tax liability	13,800,147	16,815,097
Other corporate liabilities	4,138,962	4,952,966
Total Liabilities	73,323,862	67,248,855

Description of business segments

Air Catering Unit: SGCPL acquired by the Group is identified as an independent business segment offering air catering services. SGCPL also provides handling, stores management, transportation of meals, loading/unloading of goods and other consumable and ancillary services. However these services are directly related and covered under the original meals supply contract and related air catering services.

Hotels: Currently this segment represents independent operations of Gordon House Hotel located at Mumbai. The Hotel is a modern boutique providing state of the art facilities.

Restaurants and others: This segment comprises operating specialty restaurants, and a chain of patisserie, cake shops and food courts.

Geographical segments

The Group has not presented geographical segments as all its operations are carried out in India.

NOTE F -       SUBSEQUENT EVENTS

Agreement with Gategroup in relation to the Company's Skygourmet airline catering business

IHC entered into an agreement on 11 November 2010 with Gategroup Investments Singapore Pte Ltd. ("Gategroup"), a wholly owned subsidiary company of Gategroup Holding AG, in relation to its wholly owned airline catering company Skygourmet Catering Private Limited ("Sky"). As part of this agreement, IHC has sold 74 per cent. of its interest in Sky to Gategroup (the "Sale") and has also entered into a put and call arrangement with Gategroup in respect of its remaining shares in Sky. The transaction implies an enterprise value for the whole of Sky of approximately USD92 million.

The above transaction does not meet the conditions within the meaning of IFRS 5 for treating the air-catering business as being "Held for Sale" as on 30 September. 2010, therefore no accounting adjustment was made in the half yearly financials for the period ended September 30, 2010. Further, as at September 30, 2010, the value in use of this business is higher than the carrying value and accordingly no impairment has been recognised during the period ended September 30, 2010.

 

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