HCI HOTEL CORPORATION OF INDIA LIMITED

Transcription

1 HOTEL CORPORATION OF INDIA LIMITED Final Proof for Approval

2 CONTENTS Page No. 1. Board of Directors Directors Report Comments of the Comptroller and Auditor General of India Statutory Auditor s Report Balance Sheet as at 31 March Profit & Loss Account for the year ended 31 March Cash Flow Statement Schedules forming part of the Balance Sheet 16 and Profit & Loss Account 9. Annexure to Annual Accounts Ten Years Statistics 31

3 BOARD OF DIRECTORS (AS ON ) Shri Arvind Jadhav Cmde. D. Jena Chairman Managing Director Shri E. K. Bharat Bhushan Shri Prashant Sukul Secretary Kum. Shyamala P. Kunder Auditors M/s. P. Parikh & Associates Solicitors M/s. M. V. Kini & Co. Bankers State Bank of India United Bank of India Axis Bank Limited Registered Office 1st Floor, Transport Annexe Building, Air India Complex, Old Airport, Santacruz (E), Mumbai

4 DIRECTORS REPORT The Directors have pleasure in presenting their Thirty-eighth Annual Report and the Audited Accounts for the year ended 31st March FINANCIAL RESULTS : The Financial Result of the Company for are summarised below : PARTICULARS TOTAL REVENUE TOTAL OPERATING EXPENDITURE GROSS OPERATING PROFIT/ (LOSS) ( ) ( ) INTEREST CASH PROFIT/(LOSS) ( ) ( ) DEPRECIATION NET PROFIT/(LOSS) BEFORE EXTRA ORDINARY ITEMS ( ) ( ) VRS/EXTRA ORDINARY ITEMS PRIOR PERIOD ADJUSTMENTS (1.24) NET PROFIT/(LOSS) AFTER EXTRA ORDINARY ITEMS BUT BEFORE TAX ( ) ( ) FRINGE BENEFIT TAX NET PROFIT/(LOSS) AFTER TAX ( ) ( ) OVERVIEW : During the year, out of 127 rooms to be renovated at a total cost of Rs.1070 lakhs, renovation of the balance 95 guest rooms and other related works at Centaur Hotel Delhi Airport was completed. On the basis of the pre-final bill of the contractor, provisional capitalization to the extent of Rs.693 lakhs (Previous year - Rs.215 lakhs) was made as on 31 March 2009 and depreciation was charged accordingly to Profit and Loss Account. Capitalization on actual basis would be made based on the final certification of work on receipt of final bill. Provision was made for outstanding dues for the year of Rs lakhs on account of lease Rs.163/- per sq. mtrs p.a. and turnover levy payable to Mumbai International Airport Ltd (MIAL) and Delhi International Airport Ltd (DIAL), for Chefair Flight Catering Mumbai and Centaur Hotel Delhi Airport (including Chefair Flight Catering Delhi) respectively. The total revenue has reduced to Rs lakhs as against Rs lakhs, a reduction of Rs lakhs (20%) over This is mainly on account of reduction in occupancy level at Centaur Delhi from 73% last year to 46% in and also reduction in catering revenue of Chefair Mumbai due to reduction in flights from 99 flights per week in to 71 flights per week in (reduction of 28%) post merger and low load factor on existing flights. The total expenditure has reduced to Rs lakhs, i.e. a reduction of Rs lakhs (14%) over previous year. In view of the above, the Gross Operating Loss is Rs lakhs as against Rs lakhs during the previous year. The Net Loss after tax is Rs lakhs as against Rs lakhs in the previous year. The Unit-wise performance of the Company is as under : CENTAUR HOTEL DELHI AIRPORT : The Unit earned a revenue of Rs lakhs as compared to Rs.2582 lakhs in the previous year i.e. a decrease of 20% over the previous year. This was mainly due to reduction in number of rooms available for sale, as 95 rooms were under renovation and also due to loss of business from National Disaster Management Authority (NDMA) amounting to approx. Rs.3.50 lakhs. Also there has been loss of business due to ongoing construction work of DIAL in front of the Hotel. The total expenditure was Rs lakhs, as against Rs lakhs in the previous year. As a result, the Unit made an Operating Loss of Rs lakhs as compared to Rs lakhs in the previous year. After providing for interest and depreciation, and extra-ordinary items, the unit has made a Net Loss of Rs lakhs as against Rs lakhs in the previous year. CENTAUR LAKE VIEW HOTEL, SRINAGAR : The Unit earned a revenue of Rs lakhs as compared to Rs lakhs in the previous year i.e. an increase of 4% over the previous year. The total expenditure is Rs lakhs as against Rs lakhs in the previous year. 2

5 As a result, the Unit made an Operating Loss of Rs lakhs as against Rs lakhs in the previous year. After providing for interest, depreciation, and extra-ordinary items, the unit has incurred a Net Loss of Rs lakhs as against Rs lakhs in the previous year. CHEFAIR FLIGHT CATERING, MUMBAI : The Unit earned a revenue of Rs lakhs as compared to Rs lakhs in the previous year i.e. a decrease of 31% over the previous year The total expenditure is Rs lakhs as against Rs lakhs in the previous year. As a result, the Unit made an Operating Loss of Rs lakhs as against Rs lakhs in the previous year. After providing for interest, depreciation, and extra-ordinary items, the unit has incurred a Net Loss of Rs lakhs as against Rs lakhs in the previous year. CHEFAIR FLIGHT CATERING, DELHI : The Unit earned a revenue of Rs lakhs as compared to Rs lakhs in the previous year i.e. a decrease of 15% over the previous year. The total expenditure is Rs lakhs as against Rs lakhs in the previous year. As a result, the Unit made an Operating Loss of Rs lakhs as against Rs lakhs in the previous year. After providing for interest, depreciation, and extra-ordinary items, the unit has incurred a Net Loss of Rs lakhs as against Rs lakhs in the previous year. ANNUAL PLAN OUTLAY : The Government had approved an Annual Plan Outlay of Rs.15 crores for the financial year The actual outlay was Rs.9 crores mainly towards renovation of guest rooms and other related works at Centaur Delhi and other normal capital commitments. EMPLOYMENT OF EX-SERVICEMEN : The Company is following the Government directive received in this regard for employment of Ex-Servicemen. EMPLOYMENT OF SC, ST & OBC : Subsequent to the disinvestment of three out of six Units of HCI, there was a ban on recruitment and hence, no recruitment exercise was carried out. However, the Company continued to observe the Government directives for reservation of posts in promotions of SC, ST and OBC candidates. IMPLEMENTATION OF OFFICIAL LANGUAGE POLICY : With regard to the implementation of Official Language Policy, the directives received from the Government from time to time were being followed. TRAINING & DEVELOPMENT : During the year under review, opportunities were provided to its employees at all levels to acquaint themselves with Modern Management, Technical Concept and latest innovation in the Hotel Industry through sponsoring them for various Seminars, Conferences and various short duration Refresher Courses organised by various agencies. VIGILANCE : During the year under report, periodic surprise checks and inspections were carried out at all units of HCI. Report to various agencies have been sent based on inputs received from the administrative department. During the year, procedural advice was rendered from time to time in matters pertaining to tender/purchase procedures. Vigilance Awareness Week was observed from 3rd November to 7th November FOREIGN TOURS : The Company incurred nil expenditure under this head during the year under review. PERSONNEL : As on 31st March, 2009 the Company had on its payroll a total of 1439 employees as against 1486 as on 31st March 2008 in the Head Office/various Units of the Company. The Management s relations with the employees continued to be good and cordial during the year under review. 3

6 WAGE SETTLEMENT : The Wage settlement signed with the various Unions representing Unionised category of employees of all the Units for the period 2002 to 2006 has already been executed and the new wage revision effective January 2007 is pending. PARTICULARS OF EMPLOYEES : Furnishing of particulars under Section 217(2A) of the Companies Act, 1956 does not arise as during the year under review none of the employees were drawing more than Rs. 2,00,000/- per month. FOREIGN EXCHANGE EARNING & OUTGO : The Foreign Exchange earning during the year were Rs lakhs as against Rs lakhs in the previous year. The outgo of Foreign Exchange during the year was nil. CONSERVATION OF ENERGY & TECHNOLOGY ABSORPTION : Energy conservation continues to be given a high priority by the Company. Constant efforts are being made to reduce energy consumption. Energy conservation has been made possible due to automation and better controls. Particulars required under Form B of the relevant Rules Pursuant to Section 217(1) (e) of the Companies Act, 1956 have not been given since the Company has no Research and Development activity. The question of technology absorption, adaptation or innovation is not applicable to the Company, in view of it being a Service Industry. STATUS ON REMAINING UNITS OF HCI : CHEFAIR FLIGHT CATERING, MUMBAI : As per the approval of the Ministry of Civil Aviation it was decided to give Chefair Flight Catering, Mumbai(CFCM) and Centaur Lake View Hotel, Srinagar(CLVH) under Management Contract. M/s.Tourism Finance Corporation of India Limited (TFCI) was appointed as Management Consultant for selection of parties for running the Hotel and Flight Kitchen on Management Contract basis. TFCI has called for bids from the interested parties. The short-listed four parties for Chefair Flight Catering, Mumbai (CFCM) who made presentation to the Task Force had subsequently visited the site and carried out Due Diligence before submitting their Financial Bids. Out of the four parties, one was then found not suitable and was eliminated and one more party did not show further interest to continue in the project. Subsequently, the Management Consultant had finalized the draft Management Contract to be executed between the Company and the parties, which was also approved by the Board with necessary amendments. The suggested amendments of the Board were then communicated to the parties and the final Terms of Contract is being negotiated and finalized. CENTAUR LAKE VIEW HOTEL, SRINAGAR : As approved by the Board of Directors the re-bidding process for Centaur Lake View Hotel (CLVH), Srinagar was initiated by M/s. TFCI, Management Consultant and advertisement was released and 3 bids were received. After scrutiny of the bids, out of the three bidders, only two were found eligible who made presentation to the Task Force. As both the parties were found technically qualified, they were permitted to conduct Due Diligence. Thereafter, the Management Consultant forwarded a draft Management Agreement which was vetted by our Legal Advisors & Solicitors M/s.M.V.Kini & Co. The Task Force Members discussed the financial terms and it was felt that the financial terms need to be reviewed and TFCI should be asked for the basis on which the financial terms have been fixed by them and the same was communicated to them. CENTAUR HOTEL DELHI & CHEFAIR DELHI : As per the Board s approval, renovation of 127 guest rooms, Health Club and other related works (i.e. AC plant, DG set engines, Lifts) was completed with the overall sanction of Rs.1070 lakhs. Accordingly, 127 fully renovated guest rooms were put to use during the year. The work of replacing two AC plants has been completed and commissioned on POST DISINVESTMENT ISSUES : The issue of settlement of Net Current Assets and other obligations in both the properties divested, viz., Centaur Hotel Mumbai Airport and Centaur Hotel Juhu Beach is yet to be resolved. In case of Centaur Hotel Mumbai Airport, as disputes were raised by the Buyer, the matter was referred to Arbitration and arbitration proceedings have been completed and the final award is awaited. 4

7 In case of Centaur Hotel Juhu Beach, the matter on three divergent issues was before the Sole Arbitrator, Joint Secretary, Ministry of Civil Aviation. As advised by him Executive Director - Finance & Company Secretary, NACIL has been nominated to resolve the pending issues with M/s.Tulip Hospitality Services Limited, which is under process. DIRECTORS : During the year , the Board consisted of the following Members : Shri Raghu Menon, CMD,NACIL - Chairman Cmde D.Jena - Managing Director Smt. Vilasini Ramachandran - Director Addl. Secretary & Fin. Advisor, MOCA (upto 9 February 2009) Shri E. K. Bharat Bhushan - Director Joint Secretary & Fin. Advisor, MOCA (w.e.f. 9 February 2009) Shri R. K. Singh, - Director Joint Secretary, MOCA (upto 9 March 2009) Shri Prashant Narain Sukul - Director Joint Secretary, MOCA (w.e.f. 9 March 2009) The Ministry of Civil Aviation, vide Order F. No.AV.18014/01/2009-AI dated 1 May 2009 had appointed Shri Arvind Jadhav as the Chairman & Managing Director of NACIL vice Shri Raghu Menon. Shri Jadhav had taken over charge of the post with effect from the forenoon of 4 May The Chairman - NACIL is the ex-officio Chairman of Hotel Corporation of India Limited. The Board places on record its appreciation for the valuable services rendered by Shri Raghu Menon, as Chairman, Smt. Vilasini Ramachandran and Shri R. K.Singh as Directors on the Board during their tenure. As on 1 st October 2009, the Board consisted of the following Members : Shri Arvind Jadhav, CMD,NACIL - Chairman Cmde D. Jena - Managing Director Shri E. K. Bharat Bhushan - Director Joint. Secy. & Fin. Advisor, MOCA Shri Prashant Narain Sukul - Director Joint Secretary, MOCA DIRECTORS RESPONSIBILITY STATEMENT : Pursuant to the provisions of Section 217(2AA) of the Companies Act, 1956, the Directors confirm that : 1. In the preparation of the Annual Accounts, the applicable Accounting Standards had been followed along with proper explanation relating to material departures. 2. The Directors had selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give true and fair view of the state of affairs of the Company as at the 31st March, 2009 and of the profit or loss of the Company for that period. 3. The Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities to the best of the knowledge and ability of the Directors. 4. The Directors had prepared the Annual Accounts on a going concern basis. AUDIT COMMITTEE : During the year , the constitution of the Audit Committee was as follows : Smt.Vilasini Ramchandran - Chair Person AS & FA, MOCA (upto ) Joint Secretary & Financial Advisor, - Chairman MOCA (w.e.f ) 5

8 Shri Raghu Menon, CMD-NACIL - Member Shri R. K. Singh, Jt. Secretary, MOCA - Member (upto ) Jt. Secretary, MOCA - Member (w.e.f ) Commodore D. Jena - Member The quorum for the meeting of Audit Committee would be 1/3 rd of the total strength or 2 whichever is higher. During the year under report, there was one meeting held of the audit committee. As on 1 st October 2009, the Audit Committee consisted of the following Members : Joint Secretary & Financial Advisor, - Chairman MOCA Shri Arvind Jadhav, CMD-NACIL - Member Jt. Secretary, MOCA - Member Commodore D. Jena - Member REVIEW OF ACCOUNTS FOR THE YEAR ENDED 31st March 2009 AND COMMENTS OF THE COMPTROLLER AND AUDITOR GENERAL OF INDIA UNDER SECTION 619(4) OF THE COMPANIES ACT, 1956 ON THE ACCOUNTS OF THE COMPANY : The Comptroller and Auditor General of India have conducted supplementary audit u/s 619 (3) (b) of the Companies Act, 1956 of the financial statement of the company for the year ended 31 March 2009 and reported that nothing significant had come to his knowledge which would give rise to any comment upon or supplement to Statutory Auditor s report u/s 619 (4) of the Companies Act, AUDITORS REPORT : As regards the comments of the Statutory Auditors, the Notes to Accounts clarifies the stand taken by the Management. AUDITORS : M/s. P. Parikh & Associates, Chartered Accountants, Statutory Auditors of the company, will retire at the forthcoming Annual General Meeting of the company. M/s. Singrodia Goyal & Co., Chartered Accountants, have been appointed as the sole auditors of the Company for the financial year by the Comptroller & Auditor General of India in accordance with the provisions of the Section 619 of the Companies Act, ACKNOWLEDGEMENTS : The Directors wish to place on record their appreciation for the support and co-operation extended by the employees of the Company. The Board also wishes to acknowledge gratefully the support and guidance received from the Ministry of Civil Aviation and National Aviation Company of India Limited. The Directors wish to thank the Comptroller and Auditor General of India, Chairman and members of the Audit Board, Statutory Auditors and Banks. For and on behalf of the Board Place : Mumbai Date : 3 December 2009 Sd/- Arvind Jadhav Chairman 6

9 COMMENTS OF THE COMPTROLLER AND AUDITOR GENERAL OF INDIA UNDER SECTION 619(4) OF THE COMPANIES ACT, 1956 ON THE ACCOUNTS OF HOTEL CORPORATION OF INDIA LIMITED FOR THE YEAR ENDED 31ST MARCH The preparation of financial statements of Hotel Corporation of India Limited for the year ended 31st March 2009 in accordance with the financial reporting framework prescribed under the Companies Act, 1956 is the responsibility of the management of the company. The statutory auditors appointed by the Comptroller and Auditor General of India under Section 619(2) of the Companies Act, 1956 are responsible for expressing opinion on these financial statements under section 227 of the Companies Act, 1956 based on independent audit in accordance with the auditing assurance standards prescribed by their professional body the Institute of Chartered Accountants of India. This is stated to have been done by them vide their Audit Report dated 23rd September I, on the behalf of the Comptroller and Auditor General of India, have conducted a supplementary audit under section 619(3)(b) of the Companies Act, 1956 of the financial statements of Hotel Corporation of India Limited for the year ended 31st March On the basis of my audit nothing significant has come to my knowledge which would give rise to my comment upon or supplement to Statutory Auditors report under section 619(4) of the Companies Act, For and on the behalf of the Comptroller and Auditor General of India Place : Mumbai Date : 30 October 2009 Sd/- Sarit Jafa Principal Director of Commercial Audit & ex-officio Member, Audit Board II, Mumbai 7

10 REPORT OF THE AUDITORS TO THE MEMBERS OF HOTEL CORPORATION OF INDIA LIMITED 1. We have audited the attached Balance Sheet of Hotel Corporation of India Limited, as at 31st March 2009, the related Profit and Loss Account and Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company s management. Our responsibility is to express an opinion on these financial statements based on our audit. 2. We have conducted our audit in accordance with auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. 3. As required by the Companies (Auditor s Report) Order 2003, as amended by the Companies (Auditor s Report Amendment) Order, 2004, issued by the Central Government of India in terms of sub section (4A) of Section 227 of the Companies Act, 1956, and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanation given to us, we enclose in the Annexure a statement on the matters specified in paragraph 4 and 5 of the said order. 4. Further to our comments in the Annexure referred to in paragraph 3 above, we report that: The Company has not provided liability for lease rentals, turnover levy and interest thereon of Rs lacs (Previous year Rs lacs) (Refer Note No. 2b Schedule 17). By this Debit balance of Profit & Loss a/c is understated by Rs lacs and Current liabilities is understated by Rs lacs. 5. We further report that: i) We have obtained all the information and explanation which to the best of our knowledge and belief were necessary for the purpose of audit; ii) iii) iv) In our opinion, proper books of account, as required by law have been kept by the company, so far as appears from our examination of those books; The Balance Sheet, Profit and Loss Account and the Cash Flow Statement are in agreement with the books of account; In our opinion, the Balance Sheet and the Profit and Loss Account and the Cash Flow Statement dealt with by this report comply with the mandatory Accounting Standards referred to in sub section (3C) of section 211 of the Companies Act, 1956; v) The company being a government company defined in section 617 of the Companies Act, 1956 is exempted from the applicability of the provision of section 274 (1) (g) of the said act, vide circular No.2/5/2001/CV.V General Circular No.8/2002 dated issued by the Ministry of Law, Justice and Company Affairs. vi) Subject to our comment in paragraph 4 above, in our opinion and to the best of our knowledge and according to the explanations given to us, the said financial statements read with the significant accounting policies and notes thereon, give the information required by the Companies Act, 1956 in the manner so required and give a true & fair view in conformity with the accounting principles generally accepted in India :- a. in the case of Balance Sheet of the state of affairs of the Company as at 31st March 2009 and; b. in the case of the Profit and Loss Account of the Loss of the Company for the year ended on that date; and c. in the case of Cash Flow Statement, of the cash flow of the Company for the year ended on that date. For P. Parikh & Associates Chartered Accountants Sd/- Jitesh Jain Partner Place : Mumbai Membership No Dated : 23 September

11 Referred to in Paragraph (3) of our report of even date. (I) In respect of Fixed Assets : ANNEXURE TO AUDITOR S REPORT (a) (b) (c) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets. We have been informed that most of the Fixed Assets have been physically verified by the management during the year in phased manner which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verification. During the year no substantial part of fixed assets has been disposed off by the Company. (II) In respect of inventory of stores, operating supplies and food and beverages: (a) (b) (c) As explained to us, the inventories were physically verified during the year by the Management at reasonable intervals. In our opinion and according to the information and explanation given to us, the procedures of physical verification of inventories followed by the management were reasonable and adequate in relation to the size of the Company and the nature of its business. In our opinion and according to the information and explanations given to us, the Company has maintained proper records of its inventories. As explained to us, discrepancies noticed on physical verification between the physical stocks and the book records were not material and the same have been properly dealt with in the books of accounts. (III) In respect of the loans, secured or unsecured, granted or taken by the Company to Companies, Firms or other parties covered in the Register maintained under Section 301 of the Companies Act, 1956, according to the information and explanation given to us : (a) (b) (c) (d) (e) The Company has granted unsecured loan to Company covered in the register maintained under Section 301 of the Companies Act, The maximum outstanding during the year was Rs Crores and the year-end balance of loan granted to such Company was Rs Crores. The rate of interest and other terms and conditions of such loan are, in our opinion, prima facie, not prejudicial to the interest of the company. There is no stipulation as to the repayment in respect of loan granted to such Company. However, the Company is regular in receipt of interest. In view of there being no stipulation as to the repayment of loan granted to such Company, the question of any amount being overdue does not arise. Therefore, the provision of clause III(d) of paragraph 4 of the Companies (Auditor s Report) Order, 2003, in our opinion, are not applicable to the Company. The Company has not taken any loans secured or unsecured from Companies, Firm or parties covered under Section 301 of the Companies Act, Therefore, the provision of clause III (e), (f), (g) and (h) of paragraph 4 of the Companies (Auditor s Report) Order, 2003, in our opinion, are not applicable to the Company. (IV) (V) In our opinion and according to the information and explanations given to us, there is adequate internal control system commensurate with the size of the Company and the nature of its business with regards to purchase of inventory, fixed assets and sale of goods and services. During the course of our audit, we have neither come across nor have we been informed of any continuing failure to correct major weakness in the internal control system. In respect of contracts or arrangements entered in the Register maintained in pursuance of Section 301 of the Companies Act, 1956, to the best of our knowledge and beliefs and according to the information and explanations given to us: (a) (b) The transaction made in pursuance of contracts or arrangements are not required to be entered in the register maintained under Section 301 of the Companies Act, 1956, being a Government Company. In our opinion, the transactions in pursuance of contracts or arrangements are not required to be entered in the register maintained under Section 301 of the Companies Act, 1956 aggregating during the year to Rs. 500,000/- (Rupees five lacs only) or more in respect of National Aviation Company of India (NACIL), being Government Company. However, the rates are considered to be reasonable having regards to the prevailing market price at the relevant time. 9

12 (VI) (VII) (VIII) (IX) In our opinion and according to the explanations given to us, the Company has not accepted any deposits from the public and consequently, the directives issued by Reserve Bank of India, the provision of Section 58A and 58AA of the Companies Act, 1956 and Companies (Acceptance of Deposits) Rules, 1975, with regards to the deposits accepted from the public are not applicable. In our opinion, the company has policy and procedures laid down with reference to internal audit system in the company. However, internal audit for Dining Facility Centre, Chefair Flight Catering (Mumbai), Chefair Flight Catering, (Delhi), Centaur Hotel, Delhi, Canteen (Delhi) has been conducted only for the period April, 2008 to September, The Central Government has not prescribed maintenance of cost records under Section 209(1)(d) of the Companies Act, 1956 in respect of any of the activities of the Company. According to information and explanation given to us in respect of statutory dues: (a) (b) The Company has generally regular in depositing undisputed dues of Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and other material statutory dues applicable to it, with the appropriate authorities during the year. According to the information and explanation given to us, no undisputed amounts payable in respect of income tax, wealth tax, service tax, sales tax, custom duty, excise duty and cess were outstanding as at 31 st March 2009 for a period of more than six months from the date they become payable. Due relating to items below have not been deposited as on 31 st March, 2009 on account of disputes with the related authorities is as under : Name of Nature of the Amount in Period to Forum where dispute statute dues disputes which the is pending (Rs. in Lacs) amount relates Property Tax Tax to J & K High Court Luxury Tax Tax Commissioner of Interest Sales Tax (Appeals), Penalty Mumbai 1.60 Luxury Tax Tax Additional Commissioner of Interest Sales Tax Penalty Luxury Tax Tax Jt. Commissioner of Interest Sales Tax (Appeals) Penalty Expenditure Interest Jt. Commissioner for Tax 3.74 rectification Sales Tax Tax Jt. Commissioner Appeal Penalty 5.27 for Reworking Less : Paid 4.00 Net Amount 8.27 Sales Tax Tax Commissioner of Penalty Sales Tax (Appeals) Less : Paid 7.50 Net Amount Sales Tax Tax Jt. Commissioner Interest 0.82 Sales Tax (Appeal) 2.12 Less : Paid 0.70 Net Amount

13 Sales Tax Tax Jt. Commissioner Interest 0.29 Sales Tax (Appeal) Penalty Less : Paid Net Amount 9.24 Sales Tax Tax Dy. Commissioner of Interest Sales Tax (Appeal) Penalty Net Amount Less : Paid Net Amount Income Tax Income Tax Appellate Tribunal Income Tax Commissioner of Income Tax Appeal Sales Tax Tax Reassessment Interest 1.00 Dy. Commissioner Penalty Sales Tax Luxury Tax Tax Jt. Commissioner Interest 1.00 Sales Tax (Appeal) Penalty Income Tax Tax Commissioner Income Tax (A) VIII Grand Total (X) (XI) (XII) (XIII) (XIV) (XV) (XVI) (XVII) (XVIII) The Company has no accumulated loss as at 31 st March However, it has incurred cash losses in the financial year covered under audit and in the immediately preceding financial year. The Company has not taken loan from any financial institutions or banks or debenture holders. Therefore, the provisions of clause 4 (xi) of the Companies (Auditor s Report) Order, 2003, are not applicable to the company. In our opinion and according to the information and explanation given to us, the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities. In our opinion, the Company is not a chit fund or a nidhi, mutual benefit fund/society. Therefore the provisions of Clause 4 (xiii) of the Companies (Auditor s Report) Order, 2003 are not applicable to the Company. In our opinion and according to the information and explanation given to us, the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provision of Clause 4 (xiv) of the Companies (Auditor s Report) Order, 2003 are not applicable to the company. The Company has not given any guarantee for the loans taken by others from Banks or Financial institutions during the year. The company has not taken any term loan. Therefore the provision of Clause 4 (xvi) of the Companies (Auditor s Report) Order, 2003 are not applicable to the company. According to the information and explanations given to us, and on overall examination of the Balance Sheet of the Company, fund raised on short term basis have, prima facie, not been used during the year for long term investment. The Company has not raised any money by issue of preferential allotment of shares to the parties and Companies covered in the register maintained under Section 301 of the Companies Act, Therefore the provision of Clause 4 (xviii) of the Companies (Auditor s Report) Order, 2003 are not applicable to the company. 11

14 (XIX) (XX) (XXI) The Company has not issued any debentures during the year under audit. Therefore, the provision of Clause 4 (xix) of the Companies (Auditor s Report) Order, 2003 is not applicable to the Company. The Company has not raised any money by public issue during the year. Therefore, the provision of Clause 4 (xx) of the Companies (Auditor s Report) Order, 2003 is not applicable to the company. To the best of our knowledge and according the information and explanation given to us, we have neither come across any instance of fraud on or by the Company nor have we been informed of any such case by the Management. For P. Parikh & Associates Chartered Accountants, Place : Mumbai Dated : 23 September 2009 Sd/- Jitesh Jain Partner Membership No

15 BALANCE SHEET AS AT MARCH 31, 2009 Particulars Schedule March 31, 2009 March 31, 2008 I. SOURCES OF FUNDS : 1. Shareholders Funds : A) Share Capital 1 4, , B) Reserve and Surplus 2 1, , TOTAL 5, , II. APPLICATION OF FUNDS : 1. Fixed Assets Gross Block 3 8, , Less : Depreciation 4, , Net Block 3, , Capital work in progress , , Investments Current Assets, Loans and Advances : A) Inventories B) Sundry Debtors 6 1, , C) Cash and Bank balances 7 1, , D) Loans and Advances 8 4, , , , Less : Current Liabilities Less : and Provisions A) Current Liabilities 9 3, , B) Provisions 10 2, , , , Net Current Assets 1, , TOTAL 5, , Accounting Policies 16 Notes on Accounts 17 The Schedules referred to above form an integral part of the Balance Sheet. As per our report of even date attached. For P. Parikh & Associates Chartered Accountants For and on behalf of the Board Sd/- Sd/- Sd/- Sd/- Jitesh Jain Cmde. D. Jena Prashant Sukul Shyamala P. Kunder Partner Managing Director Director Company Secretary M. No Place : Mumbai Date : 23 September

16 PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED MARCH 31, 2009 Particulars Schedule Income : 11 Sales (net of allowances / discounts) 4, , Other Income , , Expenditure : Operating Expenses 12 1, , Staff Cost 13 4, , Administrative & General Expenses , , Operating Profit / (Loss) (1,589.35) (1,416.09) Depreciation (Ref. note no. 5) Profit / (Loss) for the Year Before Tax & Extraordinary / Prior Period Items (1,809.84) (1,578.46) VRS / Extraordinary Items Prior Period Adjustments (Net) (1.24) Profit / (Loss) for the Year Before Tax (1,849.09) (2,483.48) Fringe Benefit Tax Net Loss for the Year (1,861.40) (2,496.66) Profit & Loss Brought Forward From Last Year 1, , Balance Carried To Balance Sheet (582.73) 1, Earnings per share on Share of Rs.100 each Rs. (45.85) Rs. (61.49) (Basic & Diluted) The Schedules referred to above form an integral part of the Profit and Loss Account. As per our report of even date attached. For P. Parikh & Associates Chartered Accountants For and on behalf of the Board Sd/- Sd/- Sd/- Sd/- Jitesh Jain Cmde. D. Jena Prashant Sukul Shyamala P. Kunder Partner Managing Director Director Company Secretary M. No Place : Mumbai Date : 23 September

17 CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 31, 2009 ANNEXURE - II Particulars A. CASH FLOW FROM OPERATING ACTIVITIES Net Profit After Tax & Extra Ordinary Items (1,861.40) (2,496.66) ADJUSTMENTS FOR : Depreciation Finance Cost Interest Income (75.60) (77.22) Loss on Sale of Fixed Assets (Profit) on Sale of Fixed Assets (0.20) (12.16) OPERATING PROFIT BEFORE WORKING CAPITAL (1,716.71) (2,423.67) CHANGES ADJUSTMENT FOR (Increase)/Decrease in Sundry Debtors (Increase)/Decrease in Loan & Advances 2, , (Increase)/Decrease in Stock (10.82) (13.78) Increase/(Decrease) in Current Liabilities & Provisions , , NET CASH FLOW (USED IN)/FROM OPERATING ACTIVITIES (A) B. CASH FROM INVESTING ACTIVITIES Purchase of Fixed Assets (907.81) (608.26) Proceeds from Sale of Fixed Assets Interest Received (832.01) (519.37) NET CASH FROM/(USED IN) INVESTING ACTIVITIES (B) (832.01) (519.37) C. CASH FROM FINANCING ACTIVITIES Interest Paid NET CASH (USED IN)/FROM FINANCING ACTIVITIES (C) NET CASH FLOWS DURING THE YEAR (A+B+C) (148.15) (83.21) CASH AND CASH EQUIVALENTS (OPENING BALANCE) 1, , CASH AND CASH EQUIVALENTS (CLOSING BALANCE) 1, , Note : Previous year s figures have been regrouped, wherever necessary, to conform to this year s classification. THE SCHEDULES REFERRED TO ABOVE FORM AN INTEGRAL PART OF THE BALANCE SHEET. AS PER OUR REPORT OF EVEN DATE ATTACHED For P. Parikh & Associates Chartered Accountants For and on behalf of the Board Sd/- Sd/- Sd/- Sd/- Jitesh Jain Cmde. D. Jena Prashant Sukul Shyamala P. Kunder Partner Managing Director Director Company Secretary M. No Place : Mumbai Date : 23 September

18 SCHEDULES ATTACHED TO AND FORMING PART OF THE BALANCE SHEET SCHEDULE - 1 : SHARE CAPITAL : Particulars March 31, 2009 March 31, 2008 Authorised 41,00,000 (Previous Year 41,00,000) 4, , Equity shares of Rs.100 each. Issued, Subscribed and Paid up 40,60,000 (Previous Year 40,60,000) Equity shares of Rs.100 each fully paid up 4, , (The entire share capital of the Company is held by NACIL and its nominees) SCHEDULE - 2 : RESERVES AND SURPLUS : Particulars March 31, 2009 March 31, General Reserves 1, , Balance in Profit & Loss Account (582.73) 1, , , SCHEDULE - 3 : FIXED ASSETS : GROSS BLOCK DEPRECIATION NET BLOCK Particulars Cost Additions Deductions/ Cost Upto Provided Deductions/ Upto As at As at as at during Adjustments as at during Adjustments the year during the the year during the year year Land (Leasehold) Buildings 3, , , , (On leasehold land) Plant and Machinery 2, , , , Furniture, Fixtures, Office Equipment, Electrical Installations etc. 1, (0.02) 1, , (0.02) 1, Vehicles Object d Art , , , (0.02) 4, , , Previous Year 6, (93.11) 7, , (93.60) 4, , Capital work in progress Note : Refer Note no. 5 Buildings (on leasehold land) include Rs.500/- (Previous year - Rs.500/-) being the cost of 10 shares (Prev. 10 shares) in co-operative societies. 16

19 SCHEDULES FORMING PART OF THE BALANCE SHEET AS AT MARCH 31, 2009 SCHEDULE - 4 : INVESTMENTS : Particulars March 31, 2009 March 31, 2008 Long Term Investments Other Investments (Non Trade) Government Securities 7 Year National Savings Certificate (deposited with government and local authorities) SCHEDULES FORMING PART OF THE BALANCE SHEET AS AT MARCH 31, 2009 SCHEDULE - 5 : INVENTORIES : Particulars March 31, 2009 March 31, 2008 Inventories (certified by the Management) i) Food and Beverages ii) Stores iii) Operating Supplies SCHEDULES FORMING PART OF THE BALANCE SHEET AS AT MARCH 31, 2009 SCHEDULE - 6 : SUNDRY DEBTORS : Particulars March 31, 2009 March 31, 2008 Sundry Debtors (unsecured) (Refer Note 9) Outstanding over six months : Considered good , Considered doubtful , Others : Considered good Considered doubtful , , Less : Provision for doubtful debts , ,

20 SCHEDULES FORMING PART OF THE BALANCE SHEET AS AT MARCH 31, 2009 SCHEDULE - 7 : CASH & BANK BALANCES : Particulars March 31, 2009 March 31, 2008 Cash and Bank Balances : 1) Cash on hand (including cheques on hand/in transit Rs.2.35 lakhs - previous year Rs lakhs) ) Balances with Scheduled Banks : i) On Current Accounts ii) On Fixed Deposit Accounts , SCHEDULES FORMING PART OF THE BALANCE SHEET AS AT MARCH 31, 2009 SCHEDULE - 8 : LOANS & ADVANCES : 1, , , , Particulars March 31, 2009 March 31, 2008 Loans and Advances (unsecured, considered good, unless otherwise stated) : (Refer Note 9, 6) a) Loans i) Staff Considered good b) Advances recoverable in cash or in kind or for value to be received : i) Considered good 1, , ii) Considered doubtful , , Less : Provision for doubtful advances , , c) Loan to NACIL , d) Receivable from Sahara Hospitality Ltd (Refer Note no. 10) e) Receivable from Tulip Hospitality Services Ltd (Refer Note no. 10) f) Subsidy Receivable g) Deposit with Public Bodies and others h) Advance Tax, TDS & FBT 1, , , ,

21 SCHEDULES FORMING PART OF THE BALANCE SHEET AS AT MARCH 31, 2009 SCHEDULE - 9 : CURRENT LIABILITIES : Particulars March 31, 2009 March 31, 2008 Current Liabilities Sundry Creditors (Refer Note 9) Advances form Customers Amount Due to NACIL Security and other deposits Other Liabilities (Refer Note 4, 6) 2, , VRS Payable SCHEDULES FORMING PART OF THE BALANCE SHEET AS AT MARCH 31, 2009 SCHEDULE - 10 : PROVISIONS : 3, , Particulars March 31, 2009 March 31, 2008 Provisions Gratuity 1, , Leave Encashment Taxation (FBT) , , SCHEDULES ATTACHED TO AND FORMING PART OF THE PROFIT AND LOSS ACCOUNT SCHEDULE - 11 : SALES AND OTHER INCOME : Particulars Revenue from Hotels and Flight Kitchens (Net of allowances / discounts) a) Rooms-guest Accomodation 2, , b) Food, Cigars and Cigarettes 2, , c) Beverages (Wine and Liquor) d) Telex and Telephones e) Other Services f) Licence fees for shops and offices , , Other Income a) Profit on Assets sold / scrapped b) Interest (Gross) (TDS Rs lakhs - Previous Year Rs lakhs) On Loan to NACIL On Staff Loans On Fixed Deposits c) Miscellaneous Income , ,

22 SCHEDULES FORMING PART OF THE BALANCE SHEET AS AT MARCH 31, 2009 SCHEDULE - 12 : OPERATING EXPENSES : Particulars Food Consumed (including cigars and cigarettes) Opening stock Add : Purchases Less : Closing stock Beverages (WIne and Liquor) Opening stock Add : Purchases Less : Closing stock Consumption of Stores and Supplies {net of recoveries of Rs lakhs (Pre. year Rs lakhs)} 4. Power, Fuel, Electricity and Water Charges Soft Furnishings Total Operating Expenses 1, , SCHEDULES FORMING PART OF THE PROFIT AND LOSS ACCOUNT SCHEDULE - 13 : STAFF COST : Particulars Salaries, Wages and Bonus 3, , Contribution to Provident Fund, ESI etc Provision for Leave Encashment Provision for Gratuity Welfare and others (net of recoveries Rs.0.09 lakhs (Previous year Rs.0.32 lakhs)) Total Staff Cost 4, ,

23 SCHEDULES FORMING PART OF THE BALANCE SHEET AS AT MARCH 31, 2009 SCHEDULE - 14 : ADMINISTRATIVE & GENERAL EXPENSES : Particulars Rent and Licence Fees (Refer Note No. 2a) Rates and Taxes Repairs & Maintenance Buildings Plant and Machinery Others Travelling & Conveyance Travelling Conveyance & Vehicle Expenses Guest Transportation Expenses Printing and Stationery Communication Insurance Commission Advertisement and Publicity Security Charges Legal & Professional Charges Auditors Remuneration a) Audit Fees (Incl. of Service Tax) b) Travelling Expenses Miscellaneous Expenses Bad Debts Written Off SCHEDULES FORMING PART OF THE PROFIT AND LOSS ACCOUNT SCHEDULE - 15 : PRIOR PERIOD EXPENSES / INCOME : Particulars I. Expenses 1. Communication Staff Cost Repairs & Maint Miscellaneous Expenses II. Income 1. Shop Rentals III. Prior Period Items (Net) (1.24) 21

24 SCHEDULES FORMING PART OF THE BALANCE SHEET AS AT MARCH 31, 2009 SCHEDULE - 16 : ACCOUNTING POLICIES : A SIGNIFICANT ACCOUNTING POLICIES 1. GENERAL The accounts are prepared in accordance with the generally accepted accounting principles under the historical cost convention on the basis of a going concern. 2. INCOME & EXPENDITURE RECOGNITION 2.1 Income & Expenditure are accounted on the accrual basis except income from Health Club which is accounted on cash basis. 2.2 Sales represent the amount of Invoices to customers, net of trade discounts. 3. FIXED ASSETS 3.1 Fixed Assets are stated at historical cost. 3.2 In case of contracts extending over years, revision in cost estimates are reflected in the Accounting period in which the revisions crystalise. 3.3 Leasehold land is amortised over the period of lease. 4. DEPRECIATION 4.1 Depreciation on fixed assets is provided, irrespective of the lease period, at the rates & in the manner prescribed in Schedule XIV to the Companies Act,1956 on the Straight Line Method on prorata basis from the month of addition except in the case of the following assets: a) In respect of assets acquired prior to April,1st,1982, at rates on the estimated useful life of the Fixed Asset. b) In respect of the assets acquired from 1st April, 1982 to 2nd April,1987 at the rates prescribed under the Income Tax Act,1961 and rules thereunder. 4.2 Assets purchased /installed during the year having cost less than Rs 5,000/- each are being fully depreciated in the year of purchase. 5. AMORTISATION 5.1 Kitchen utensils purchased for the first time for a new unit are written off equally in four years. Any additions in the subsequent years are written off in the year of purchase. 5.2 Carpets purchased initially for a new unit / major renovation are capitalised as Fixed Assets in the year of purchase and depreciated on the Straight Line Method as specified in para 4 above. Carpets purchased in the subsequent years are being written off as Soft furnishings in the year of purchase. 5.3 Heavy curtains are written off in the year of issue. 6. TREATMENT OF EXPENDITURE DURING CONSTRUCTION PERIOD All revenue expenses directly attributable to ongoing projects are set apart as expenses during construction and capitalised on the basis of value of work completed during the year in which the area is put to use. 7. FOREIGN EXCHANGE TRANSACTION 7.1 Foreign Currency balances are valued on the basis of exchange rates prevailing as on the date of the Balance Sheet. 7.2 The exchange difference pertaining to Long Term Liability incurred for acquisition of Fixed Assets are djusted to the cost of related Fixed Assets. 22

25 7.3 The exchange difference pertaining to the Current Assets and Current Liabilities are transferred to the Profit & Loss Account. 7.4 Collection transaction in Foreign Currencies are translated into rupees at the rate of exchange ruling at the date of deposit with the Bank. 8. VALUATION OF INVENTORIES Stock is valued at cost after making allowance for spoilage,except in case of linen, cutlery & crockery in rooms and outlets which are being valued at cost irrespective of the period of use. 9. RETIREMENT BENEFITS 9.1 Gratuity and Leave Encashment are provided on the basis of Actuarial Valuation as at the Balance Sheet date. 9.2 Voluntary Retirement scheme is accounted for in the year of announcement of scheme by the company and acceptance of the same by the employees. 10. INVESTMENTS Long term investments, if any, are stated at cost, less permanent diminution in value. Current investments are valued at lower of the cost or fair market value. 11. LIABILITIES & PROVISIONS 11.1 The Company considers claims under arbitration as Contingent Liability The effect of arbitration awards decided against the Company for which Appeals have been preferred, are accounted in the year of final disposal Show Cause Notices received from various authorities/parties are not considered as Contingent Liabilities. However, when Demand Notices are raised against the same, those demands are either paid or treated as Liabilities, if accepted by the Company, and are treated as Contingent Liabilities if disputed by the Company Outstanding current liabilities are reviewed periodically and those over three years, if not considered payable are transferred to other Income. 12. PRIOR PERIOD ADJUSTMENTS Expenditure/Income pertaining to prior year(s) is classified as Prior Period items, only in cases where the amount exceeds Rs. 25,000/- per transaction. 13. ACCOUNTING FOR DOUBTFUL DEBTS Outstanding balances of Sundry Debtors (other than Government ) are reviewed periodically and due provision is made for debts considered doubtful of recovery. 14. ACCOUNTING FOR TAXATION 14.1 Current tax is determined as the amount of tax payable in respect of taxable income for the period Deferred tax is recognised on timing differences,between taxable income and accounting income that originate in one period and is capable of reversal in one or more subsequent periods.deferred Tax Assets, subject to consideration of prudence, are recognised and carried forward only to the extent that there is a reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised.this is in accordance with AS-22 Accounting for taxes on income which came into effect in respect of accounting periods commencing on or after