ANNUAL REPORT2009-2010ADVANI HOTELS & RESORTS (INDIA) LTD.1dvani Hotels & Resorts (India) LimitedPageNotice .................
Schedules to Consolidated Profit and Loss Account .............................................. 55Significant Accounting ...
MIDC MarolAndheri (East), Mumbai - 400 093FOREIGN COLLABORATORS Wyndham Hotels, U.S.A.(Previously Ramada International, In...
3. To appoint a Director in place of Mr. Prakash V. Mehta, who retires by rotation and is eligible for re-appointment.4. T...
Category ‘A’I. Housing:(a) Company leased unfurnished accommodation or House Rent Allowance in lieu thereof subject to ama...
Category ‘B’I. Provident FundProvident Fund / Superannuation / Annuity Fund Contributions as per the Company’s rules.II. G...
Registered Office:1009/1010, Dalamal Tower,211, Nariman Point, Mumbai - 400 021.NOTES:1. A MEMBER ENTITLED TO ATTEND AND V...
2007-2008 (Interim) 17-05-20152007-2008 (Final) 13-09-20154. Members who have not claimed dividend in respect of the finan...
Companies 2. Patel Engineering Ltd. –Member-Shareholders Grievance– Chairman-Audit Committee Committee– Chairman-Sharehold...
7. Members are requested to quote their Folio Number or the DP & Client ID on all the correspondencewith theCompany or wit...
Mr. Haresh G. Advani, Executive Director.Mr. Prahlad Advani has completed his Bachelor of Science in Hotel Administration ...
the members of the Company by way of a Special Resolution and approval of the Central Government.The consent ofthe Members...
stMarch 2010 and the Balance Sheet as on that date.Financial Results:Your Company’s performance for the year ended March 3...
Profit available for appropriation .......................................... 438.82 561.92Less: Dividend and tax thereon ...
lakhs to only Rs.960 lakhs and the lower LIBOR rate during the year. Unsecured Loans did go up byRs.512lakhs for a short p...
previous year. The loss after tax for the year 2009-10 was Rs.1327 lakhs as against Rs 79 lakhs last year.Asa prudent acco...
the better performance of the corporates and the stock market. Although Indians are travelling abroadextensivelyfor holida...
APCCPL. The balance 49% of the equity in APCCPL was held by Casinos Austria International, who did notwishto provide any m...
thMay 2010exempted the Company from the requirement of attaching the Financial statements of its subsidiaries interms ofSe...
The Company has complied with the requirements regarding the Corporate Governance as requiredunder Clause49 of the Listing...
the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment.Particulars of Employees:The in...
Advani Managing Financial Management Courses Managing Director,Director Cornell University (USA) Hotel Airport PlazaMumbai...
dvani Hotels & Resorts (India) LimitedAnnual Report 2009 - 2010MANAGEMENT DISCUSSION AND ANALYSIS REPORT1. DEVELOPMENTS AN...
to decrease in demand. However, tourists from the UK at our resort have increased in the 2010-2011season. TheGerman econom...
the new terminal at Dabolim airport with several new aero bridges has begun in full swing and this willmake itpossible to ...
attractive fares of-late which have contributed to the increase in domestic travel to Goa. We, in India,like to travel13dv...
pool with adequate surrounding deck area for sun bathing. The placement of a swim-up bar in thecentre of one ofthe largest...
The Government of Goa has realized the importance of the tourism industry and is successfully lobbyingforfunds from the Ce...
The financial results of your Company, on a standalone basis and on a consolidated basis are containedin theAnnual Report....
8. INTERNAL CONTROL SYSTEM AND ADEQUACY:The internal control systems set up in terms of financial reporting, efficiency of...
Company exercises no controls. The Company cannot guarantee the accuracy nor can it be sure that theresultswill occur. Sig...
strength of the Board of Directors of the Company. The details are as follows:Sr. Name of the Directors CategoryNo.1. Mr. ...
Managing Direcor 10 Present None None None2. Mr. Haresh G. Advani ExecutiveDirector 10 Present None None None3. Mr. K. Kan...
The constitution of the Audit Committee also meets the requirements of the provisions of Section 292Aof theCompanies Act, ...
Remuneration Committee are as under. The Committee approves the annual salaries, performancecommission,service agreements ...
Rs. Rs. Rs.1. Mr. Sunder G. Advani 48,00,000 5,00,000 0 5 years 3 monthsChairman & Managing Director2. Mr. Haresh G. Advan...
without delay and where deemed expedient, the complaints are referred to the Chairperson of theCommittee ordiscussed at it...
Location ‘Rangaswar’, 4th Floor, Kamalnayan Bajaj Hall, Seminar Hall of K.C. CollegeChavan Centre, Ground Floor, Bajaj Bha...
➢ Pursuant to the provisions of Sub-Clause V of Clause 49 of the Listing Agreement with the StockExchanges, the Chairman &...
looked into and whenever necessary, suitable corrective steps are taken. The Company promotes ethicalbehaviour in all its ...
Month High      Low Close Price Month High Low Close PriceRs. Rs. Rs. Rs. Rs. Rs.April’ 09 31.85 26.35 27.55 October’09 61...
40.1049.8053.1055.1050.1056.5059.2544.1038.2540.8539.4527.5505,00010,00015,00020,000Apr09 May09 June09 July09 Aug09 Sept09...
Datamatics Financial Services Limited(Unit: Advani Hotels & Resorts (India) Limited)Plot No. B5, Part B, Cross Lane,MIDC M...
21dvani Hotels & Resorts (India) Limited➢ Category of Shareholding as on March 31, 2010Category No. of Shares % of TotalPr...
➢ As on date the Company has not issued GDRs/ADRs/Warrants or any other convertible instruments.➢ LocationHotelRamada Cara...
Advani Hotels & Resorts India LimitedWe have examined the compliance of Corporate Governance of ADVANI HOTELS & RESORTS (I...
the records maintained by the Share Transfer and Shareholders / Investors Grievance Committee.We further state that such c...
amounts and disclosures in the financial statements. An audit also includes assessing the accountingprinciplesused and sig...
Companies Act, 1956.6. In our opinion and to the best of our information and according to the explanations given to us, th...
material discrepancies were noticed by the Management on such physical verification as compared tobookrecords.(c) In our o...
advance given by the Company to its subsidiary. However, the entire amount except Rs. 25,315,947/-which isconsidered doubt...
provisions of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975. Hencetheclause (vi) of the O...
and records, there are no cases of non-deposit with appropriate authorities of disputed dues of income-tax,sales-tax, weal...
15. According to the information and explanations given to us, the Company has given guarantee forloan taken by itsone of ...
J.G.VERMAPartnerMumbai, November 4, 2010 Membership No. 500526dvani Hotels & Resorts (India) LimitedAnnual Report 2009 - 2...
421,630,148 446,411,550INVESTMENTS ..................................................................... ‘F’ 22,285,000 10...
Mumbai, November 4, 201027dvani Hotels & Resorts (India) LimitedPROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 201...
Fringe Benefits tax ...................................................................... — 1,158,000Deferred tax Liabili...
J. G. VERMA KUMAR IYER SHANKAR KULKARNIPartner Company Secretary General Manager – Finance (CFO)Mumbai, November 4, 201028...
Provision for retirement benefits/(written back) ................................................................. 366,027...
Disposal of Investment ......................................................................................................
CASH & CASH EQUIVALENTS AT THE CLOSING OF THE YEAR (Closing Balance) ... 8,840,212 14,408,888As per our report of even dat...
of the Government of Goa ............................................................... 2,500,000 2,500,000Share Premium ...
NOTES:1. Loans under items No. (1) and (2) from Bank of Baroda are secured by (i) a mortgage executed infavour of Bank of ...
4. Amount payable within one year Rs. 58,505,000/- (Prev. Year Rs. 43,247,000/-).Previous YearRupees RupeesSCHEDULE “D” : ...
3. Deductions from Fixed Assets include foreign exchange gain of Rs 8,786,483/- (Previous year Rs Nil)due to fluctuation o...
31dvani Hotels & Resorts (India) LimitedSCHEDULES FORMING PART OF THE BALANCE SHEET AS AT 31ST MARCH, 2010Previous YearRup...
Annual report of advani hotel
Annual report of advani hotel
Annual report of advani hotel
Annual report of advani hotel
Annual report of advani hotel
Annual report of advani hotel
Annual report of advani hotel
Annual report of advani hotel
Annual report of advani hotel
Annual report of advani hotel
Annual report of advani hotel
Annual report of advani hotel
Annual report of advani hotel
Annual report of advani hotel
Annual report of advani hotel
Annual report of advani hotel
Annual report of advani hotel
Annual report of advani hotel
Annual report of advani hotel
Annual report of advani hotel
Annual report of advani hotel
Annual report of advani hotel
Annual report of advani hotel
Annual report of advani hotel
Annual report of advani hotel
Annual report of advani hotel
Annual report of advani hotel
Annual report of advani hotel
Annual report of advani hotel
Annual report of advani hotel
Annual report of advani hotel
Annual report of advani hotel
Annual report of advani hotel
Annual report of advani hotel
Annual report of advani hotel
Annual report of advani hotel
Annual report of advani hotel
Annual report of advani hotel
Annual report of advani hotel
Annual report of advani hotel
Annual report of advani hotel
Annual report of advani hotel
Annual report of advani hotel
Annual report of advani hotel
Annual report of advani hotel
Annual report of advani hotel
Annual report of advani hotel
Annual report of advani hotel
Annual report of advani hotel
Annual report of advani hotel
Annual report of advani hotel
Annual report of advani hotel
Annual report of advani hotel
Annual report of advani hotel
Annual report of advani hotel
Annual report of advani hotel
Annual report of advani hotel
Annual report of advani hotel
Annual report of advani hotel
Annual report of advani hotel
Annual report of advani hotel
Annual report of advani hotel
Annual report of advani hotel
Annual report of advani hotel
Annual report of advani hotel
Annual report of advani hotel
Annual report of advani hotel
Annual report of advani hotel
Annual report of advani hotel
Annual report of advani hotel
Annual report of advani hotel
Annual report of advani hotel
Annual report of advani hotel
Annual report of advani hotel
Annual report of advani hotel
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Annual report of advani hotel

  1. 1. ANNUAL REPORT2009-2010ADVANI HOTELS & RESORTS (INDIA) LTD.1dvani Hotels & Resorts (India) LimitedPageNotice ....................................................................................................................... 3Directors’ Report...................................................................................................... 7Management Discussion and Analysis .................................................................... 12Corporate Governance Report.................................................................................. 15Auditors’ Certificate on Corporate Governance....................................................... 22Auditors’ Report....................................................................................................... 23Balance Sheet.......................................................................................................... 26Profit and Loss Account .......................................................................................... 27Cash Flow Statement .............................................................................................. 28Schedules to Balance Sheet ................................................................................... 29Schedules to Profit and Loss Account.................................................................... 32Significant Accounting Policies and Notes on Accounts ........................................ 35Statement under section 212 of the Companies Act .............................................. 46Auditors’ Report on Consolidated Financial Statement ........................................... 47Consolidated Balance Sheet.................................................................................... 48Consolidated Profit and Loss Account .................................................................... 49Consolidated Cash Flow Statement ......................................................................... 50Schedules to Consolidated Balance Sheet ............................................................. 51
  2. 2. Schedules to Consolidated Profit and Loss Account .............................................. 55Significant Accounting Policies and Notes on Consolidated Accounts .................. 57CONTENTS2dvani Hotels & Resorts (India) LimitedAnnual Report 2009 - 2010BOARD OF DIRECTORS Mr. Sunder G. Advani Chairman & Managing DirectorMr. K. KannanMr. Prakash V. MehtaMr. Anil HarishMr. Haresh G. Advani Executive DirectorMrs. Menaka S. AdvaniGENERAL MANAGER FINANCE (CFO) Mr. Shankar KulkarniCOMPANY SECRETARY Mr. Kumar IyerAUDITORS Messrs J. G. Verma & Co.Chartered AccountantsSOLICITORS Messrs Talwar Thakore & AssociatesMessrs Malvi Ranchoddas & Co.BANKERS Bank of BarodaBank of IndiaREGISTERED OFFICE 1009/1010, Dalamal Tower211, Nariman PointMumbai - 400 021REGISTRAR AND Datamatics Financial Services LimitedSHARE TRANSFER AGENTS Plot No. B/5, Part B Cross Lane
  3. 3. MIDC MarolAndheri (East), Mumbai - 400 093FOREIGN COLLABORATORS Wyndham Hotels, U.S.A.(Previously Ramada International, Inc., U.S.A.)LOCATION OF THE RESORT Ramada Caravela Beach ResortVarca Beach, Varca VillageSalcette, Goa - 403 7213dvani Hotels & Resorts (India) LimitedNOTICENotice is hereby given that the Twenty Third Annual General Meeting of the Members of Advani Hotels& Resorts(India) Limited will be held at ‘Rangaswar’, 4thFloor, Chavan Centre, General Jagannath Bhosale Marg, NarimanPoint, Mumbai – 400021 on Wednesday, 15thDecember, 2010 at 11.00 a.m. to transact the following business:ORDINARY BUSINESS:1. To receive, consider and adopt the audited Balance Sheet as at 31st March, 2010, Profit & Lossaccount for theyear ended on that date together with Reports of the Directors and Auditors thereon.1A. To declare dividend on Equity Shares.2. To appoint a Director in place of Mr. K. Kannan, who retires by rotation and is eligible for re-appointment.
  4. 4. 3. To appoint a Director in place of Mr. Prakash V. Mehta, who retires by rotation and is eligible for re-appointment.4. To appoint M/s. J. G. Verma & Co., Chartered Accountants, to hold the office as Auditors of theCompany from theconclusion of this Annual General Meeting until the conclusion of the next Annual General Meeting andtoauthorise the Board to fix their remuneration.SPECIAL BUSINESS:5. To consider and if thought fit, to pass with or without modification the following resolution as aSpecial Resolution:“Resolved that in accordance with and pursuant to the provisions of Section 314(1B) and otherapplicable provisions,if any, of the Companies Act, 1956 and the rules and regulations thereto, including any statutorymodification(s) orre-enactment thereof, for the time being in force and subject to the approval of the CentralGovernment, includingmodifications, if any, the consent of the Company be and is hereby accorded for Mr. Prahlad Advani, sonof Mr.Sunder G. Advani, Chairman & Managing Director and Mrs. Menaka S. Advani, Director and nephew ofMr. HareshG. Advani, Executive Director, to hold and continue to hold an office or place of profit as the VicePresident & AssetManager of the Company on the following revised remuneration with effect from 15thDecember 2010:SalarySalary of Rs. 1,30,000/- in the Company’s Special Grade of Rs. 1,30,000 – Rs. 17,500 - Rs. 2,00,000.PerquisitesIn addition to the salary, Mr. Prahlad S. Advani shall be entitled to the following perquisites:
  5. 5. Category ‘A’I. Housing:(a) Company leased unfurnished accommodation or House Rent Allowance in lieu thereof subject to amaximum of 60% of Salary.(b) In case the accommodation is owned by the Company, 10% of the salary shall be deducted by theCompany.II. Medical reimbursement:Medical expenses reimbursement for self, spouse and family members subject to a maximum of onemonth’ssalary per annum or three months’ salary over a period of three years.III. Leave Travel Allowance:Leave Travel Allowance for self, spouse and family members once in a year incurred in accordance withtheCompany’s rules subject to a maximum of one month’s salary per annum or two months’ salary over aperiodof two years.IV. Insurance:Insurance premium not exceeding 3.1% of the Salary.V. Other allowances/reimbursements(a) Reimbursement of Uniform, Books & Periodicals and Computer Allowance subject to a maximum of15%of the Salary.4dvani Hotels & Resorts (India) LimitedAnnual Report 2009 - 2010(b) Reimbursement of Club Fees / Expenses subject to a maximum of 10% of the Salary.(c) Reimbursement of Entertainment Expenses subject to a maximum of 12% of the Salary.
  6. 6. Category ‘B’I. Provident FundProvident Fund / Superannuation / Annuity Fund Contributions as per the Company’s rules.II. GratuityGratuity as per the Company’s rules.Category ‘C’I. CarProvision of a car with driver and petrol expenses for use of Company’s business. Use of car for personalpurposes shall be billed by the Company.II. TelephoneProvision of telephone at residence for Company’s business purpose. Provision of Mobile phone as perCompany’s rules.The employment can be terminated by either party by giving 90 days notice in writing.Resolved further that the Board of Directors or any of its Committee be and is hereby authorised tosanctionat its discretion annual increments within the scale as the Board / Committee may deem fit and propereffective from December every year and to do all such acts, deeds, matters and things, make andexecute allsuch applications, writings and instruments as the Board may in its absolute discretion deem necessaryordesirable and delegate the said authority to any person(s) as the Board may deem fit in its discretion forthepurpose of giving effect to this resolution.”By Order of the Board of DirectorsFor Advani Hotels & Resorts (India) LimitedPlace: Mumbai Kumar IyerDate: November 4th, 2010. Company Secretary
  7. 7. Registered Office:1009/1010, Dalamal Tower,211, Nariman Point, Mumbai - 400 021.NOTES:1. A MEMBER ENTITLED TO ATTEND AND VOTE IS ENTITLED TO APPOINT A PROXY TO ATTEND AND VOTEONA POLL INSTEAD OF HIMSELF AND THE PROXY NEED NOT BE A MEMBER.The Proxy Form duly completed and stamped, must be lodged at the Registered Office of the Companynot laterthan 48 hours before the time fixed for the meeting.2. The Register of Members and Share Transfer Books of the Company will remain closed from 11thto 15thDecember2010 (both days inclusive).3. Pursuant to Section 205A (5) of the Companies Act, 1956 all unclaimed dividends up to the financialyear ended31stMarch 2001 have been transferred to the Investor Education and Protection Fund (IEPF) of the CentralGovernment. The details of the due dates for transfer of unpaid/ unclaimed dividend to the IEPF for thesubsequentyears are as under:Year of Declaration Due Date (For transfer to the IEPF)2005-2006 25-04-20132006-2007 21-03-2014
  8. 8. 2007-2008 (Interim) 17-05-20152007-2008 (Final) 13-09-20154. Members who have not claimed dividend in respect of the financial year 2005 - 2006 and for thesubsequent yearsare requested to approach the Company/the Registrar and Share Transfer Agents of the Company forclaiming thesame.5dvani Hotels & Resorts (India) Limited5. The particulars of the Directors seeking re-appointment are furnished below as per the provisions ofClause 49 ofthe Listing Agreement:Name of Director (1) Mr. K. Kannan (2) Mr. Prakash V. MehtaDate of Appointment 28.07.2003 30.06.1989Age 71 years 68 yearsQualification FCA, ACWA LL.B. SolicitorExpertise Finance, Banking LawList of other Directorsh ips # 1. Kesar Enterprises Ltd. 1. Bharat Bijlee Limited2. Patel Engineering Ltd.. 2. Hikal Ltd.3. Consolidated Construction Consortium 3. India Safety Vaults Ltd.Ltd. 4. JBF Industries Ltd.4. Prithvi Asset Reconstruction Company 5. Mukand Ltd.Ltd. 6. Mukand Engineers Ltd.5. Heritage Foods (India) Ltd. 7. PCS Technologies Ltd.6. Kesar Terminals & Infrastructure Ltd. 8. W.H. Brady & Co., Ltd.Chairmanship/Membership of 1. Kesar Enterprises Ltd. 1. Bharat Bijlee Limitedother Committees of other – Member-Audit Committee – Member-Audit Committee
  9. 9. Companies 2. Patel Engineering Ltd. –Member-Shareholders Grievance– Chairman-Audit Committee Committee– Chairman-Shareholders 2. Mukand Engineers Ltd.Grievance Committee – Member-Audit Committee3. Consolidated Construction Consoritium 3. JBF Industries Ltd.Ltd. – Member-Shareholders Grievance– Member-Audit Committee Committee4. Prithvi Asset Recons. Co. Ltd. 4. Hikal Ltd.– Member-Audit Committee – Member-Audit Committee5. Heritage Foods (India) Ltd. – Member-Shareholders Grievance– Member-Audit Committee Committee6. Subhalakshmi Polyesters Ltd. 5. Mukand Ltd.– Member-Audit Committee – Member-Audit Committee7. Kesar Terminals & Infra Ltd.– Member-Audit Committee# Excludes Directorships in Private Limited Companies, Unlimited Companies, Foreign Companies,Section 25 Companies and Alternat e Directorships.$ Includes only membership/s of Audit Committee and Shareholders/Investors Grievance Committee ofother Public Limited Companies .6. The Registrar and Share Transfer Agents of the Company are:Datamatics Financial Services LimitedPlot No. B-5, Part B, Cross Lane, MIDC Marol, Andheri (East), Mumbai - 400 093Tel.: 91-22-6671 2237 Fax: 91-22-6671 2209Members are requested to contact them for any matter relating to Bank details, ECS Mandates,nominations, powerof attorney, change in name/address etc.
  10. 10. 7. Members are requested to quote their Folio Number or the DP & Client ID on all the correspondencewith theCompany or with the Share Transfer Agents.8. In view of the numerous advantages offered by the Depository System, members holding Shares inphysical formare requested to avail of the facility of dematerialisation of the Company’s shares.9. Members desirous of seeking clarifications / explanations are requested to forward their queries tothe Company atits Registered Office at least 7 days prior to the date of the Meeting.10. Members are requested to kindly bring their copies of the Annual Report to the Annual GeneralMeeting.By Order of the Board of DirectorsFor Advani Hotels & Resorts (India) LimitedPlace: Mumbai Kumar IyerDate: November 4, 2010. Company SecretaryRegistered Office:1009/1010, Dalamal Tower, 211, Nariman Point, Mumbai - 400 0216dvani Hotels & Resorts (India) LimitedAnnual Report 2009 - 2010EXPLANATORY STATEMENT PURSUANT TO SECTION 173(2) OF THE COMPANIES ACT, 1956:ITEM NO: 5The Special Resolution relates to the revision in the remuneration payable to Mr. Prahlad S. Advani whohas beenemployed with the Company as General Manager – Asset Management since1st May, 2000. Mr. PrahladS. Advani is theson of Mr. Sunder G. Advani, Chairman and Managing Director and Mrs. Menaka S. Advani, Director andnephew of
  11. 11. Mr. Haresh G. Advani, Executive Director.Mr. Prahlad Advani has completed his Bachelor of Science in Hotel Administration from CornellUniversity withconcentration in Financial Management. Before joining the Company in 2000 he was employed withDeutsche Bank AlexBrown in U.S.A. as a Financial Analyst in the Investment Banking Division. His annual compensation wasvalued atUS $ 75,000 excluding the benefits package of US $ 10,000. However, Mr. Prahlad Advani joined theCompany in May2000 on a monthly salary of Rs. 60,000/- plus perquisites.The members of the Company and the Central Government had consented to Mr. Prahlad S. Advani forholding of anoffice or place of profit in the Company. Accordingly, at present Mr. Prahlad S. Advani is being paid amonthly salary ofRs.1,10,000/- plus perquisites in accordance with Section 314 (1B) of the Companies Act, 1956.Taking into account the qualification, experience and performance of Mr. Prahlad S. Advani and theadditionalresponsibilities handled by him, the Remuneration Committee and the Board of Directors of theCompany have consideredand approved the promotion of Mr. Prahlad Advani as Vice President & Asset Manager on the revisedremuneration andterms and conditions w.e.f. 15thDecember 2010 as contained in the resolution. The monthly salary payable toMr. Prahlad Advani is proposed to be increased from Rs.1,10,000/- per month to Rs.1,30,000/- permonth plus perquisitesand annual increments as specified in the resolution. Payment of remuneration to a relative of directorexceedingRs.50,000/- per month attracts provisions of Section 314 (1B) of the Companies Act, 1956 and requiresprior consent of
  12. 12. the members of the Company by way of a Special Resolution and approval of the Central Government.The consent ofthe Members is therefore being sought for the Special Resolution as proposed in the Notice. Afterapproval by theMembers, an application shall be made to the Central Government.The Board feels that the increase in the remuneration is reasonable and in line with the salary offered toother seniormanagers and will be in the best interests of the Company. The Board therefore recommends theSpecial Resolution forthe approval of the Members.None of the Directors except Mr. Sunder G. Advani, Mrs. Menaka S. Advani and Mr. Haresh G. Advani isconcerned orinterested in the resolution.By Order of the Board of DirectorsFor Advani Hotels & Resorts (India) Ltd,Place: Mumbai Kumar IyerDate: 4thNovember, 2010 Company Secretary7dvani Hotels & Resorts (India) LimitedDIRECTORS’ REPORTDear Members,Your Directors are pleased to present the 23rdAnnual Report of the Company along with the audited Profit & LossAccount for the year ended 31
  13. 13. stMarch 2010 and the Balance Sheet as on that date.Financial Results:Your Company’s performance for the year ended March 31, 2010 is summarized below:(Rs. in Lakhs)Item Year ended Year endedMarch 31, 2010 March 31, 2009Operating Income ................................................................... 3164.31 3057.38Other Income ........................................................................... 75.37 309.78Total Income 3239.68 3367.16Profit before depreciation, interest, tax andexceptional items .................................................................... 371.40 587.22Less: Interest............................................................................. 123.60 165.85Profit/(Loss) before depreciation, tax and exceptional items 247.80 421.37Less: Depreciation.................................................................... 248.98 250.86Profit/(Loss) before tax and exceptional items .................... (1.18) 170.51Add/(Less): Exceptional items (net) .......................................... 147.04 (222.34)Profit/(Loss) before tax ........................................................... 145.86 (51.83)Less: Provision for:Current tax ...................................................................... 37.00 77.00Deferred tax liability/(asset) ............................................ 31.96 (145.56)Fringe Benefit tax ........................................................... — 11.58Profit after tax .......................................................................... 76.90 5.15Add: Profit brought forward from previous year ........................ 361.92 643.68Less: Adjustment on adoption of AS-11 Notification ................ — 86.91
  14. 14. Profit available for appropriation .......................................... 438.82 561.92Less: Dividend and tax thereon ................................................. 53.90 —Less: Transfer to General Reserve ........................................... — 200.00Balance Profit carried to Balance Sheet ................................... 384.92 361.92Basic and Diluted Earnings per share (in Rs.) .......................... 0.17 0.01Income:The total income for the year ended 31stMarch 2010 at Rs.3240 lakhs is lower by 3.8% as compared to Rs.3367lakhs during the previous year. However, the income from Operations for the year has gone up fromRs.3057lakhs to Rs.3164 lakhs even though income for the previous year included two months operationalincome of theAirport Plaza catering unit. The other income has gone down significantly during this financial year as nodividendincome was received from the erstwhile subsidiary (Advani Pleasure Cruise Company Private Limited[APCCPL])as compared to Rs. 166 lakhs received in the previous financial year.Interest and Depreciation:Interest costs for the year ended 31stMarch 2010 stood at Rs.124 lakhs, which represents a reduction of Rs.42lakhs or 25% over the previous year. This has been achieved by bringing down the Secured Loans fromRs.11288dvani Hotels & Resorts (India) LimitedAnnual Report 2009 - 2010
  15. 15. lakhs to only Rs.960 lakhs and the lower LIBOR rate during the year. Unsecured Loans did go up byRs.512lakhs for a short period. This amount was given by the intended acquirer of APCCPL as an interest-freeloan tofacilitate renewal of the Company’s Casino Licence used by APCCPL and has since been repaid. TheUnsecuredLoans of the Company as of date stand at Rs.125 lakhs as compared to Rs.614 lakhs as on March 31,2010.The figures for depreciation are almost the same as no additional capital expenditures were carried out.Profits:The Profit for the year before tax is Rs.146 lakhs as compared to a loss of Rs.52 lakhs. Since the sale ofourinvestment in APCCPL has been completed during the year, the provision made in previous year fordiminutionin value of investment in APCCPL has been reversed during the year. The net excess provision of Rs.147lakhshas been added to profits as exceptional item.Consolidated Financial Results:The Consolidated Results for this financial year include the standalone results as well as the operationsofAPCCPL. APCCPL, which was operated by Casinos Austria International had been making considerablelossesdue to competition from other new offshore casinos. Subsequently, the business operations weresuspendedfrom 12thJune 2009.The total income of APCCPL for the year 2009-10 declined to Rs.91 lakhs as against Rs.2320 lakhs duringthe
  16. 16. previous year. The loss after tax for the year 2009-10 was Rs.1327 lakhs as against Rs 79 lakhs last year.Asa prudent accounting policy, APCCPL has written off the assets on the leased ship M.V. Caravelaamounting toRs.339 lakhs in the year 2009-10. These assets were not removed from the Ship on expiry of the leaseand thesame is also included in the above loss. APCCPL has made cumulative loss of Rs.822 lakhs upto March31,2010 of which 51% is reflected in the consolidated accounts.Considering the above, the Board of Directors has sold the 51% investment in APCCPL to Delta Corp Ltd.for aconsideration of Rs.245 lakhs which sale was completed on 20thSeptember 2010. APCCPL has thus ceased tobe Company’s subsidiary with effect from that date.Dividend:In view of the improved results and the sale of the investment in the loss-making APCCPL, the Board hasrecommended a dividend of Rs.0.10 per Share (i.e. @ 5%) in respect of the financial year 2009-10 andthe samewill be paid to the shareholders subject to the approval at the Annual General Meeting.The tax on dividends will be borne by the Company as per the Income-tax Act provisions.Future Outlook:The business from the foreign tourists is expected to be much higher due to increased flights into GoafromRussia and its neighbouring countries whose economies have not been adversely affected. There is alsoanincrease in domestic traffic into Goa due to improvement in the disposable income available withindividuals and
  17. 17. the better performance of the corporates and the stock market. Although Indians are travelling abroadextensivelyfor holidays, there is a decline in cost of air travel within India.Your Company has maintained the sales of about Rs.1190 lakhs for the half-year despite the unexpectedheavyrainfall in Goa and other parts of India. The net loss for the half-year has been reduced by Rs.84 lakhs.YourCompany expects to do better than last year as occupancy rates are higher with the early start of theforeignseason in October. The Indian economy is going to do even better and coupled with the boom in thestockmarket, domestic travel to Goa will also increase.Renovation:The Company managed to do a limited touch up of some of the hotel guest rooms in the periodbetween May andOctober 2009. Since there have been some complaints of mustiness of a particular section of the hotel,the 20rooms in this section have been upgraded in the period between May and October 2010. A newconference9dvani Hotels & Resorts (India) Limitedfacility has also been created during the above period, which will add to the revenues for the financialyear 2010-11.Subsidiary Companies:As informed in our Director’s Report last year, APCCPL had been making losses and the operations of thecasinoon the leased ship ‘Caravela’ had been suspended from 12thJune, 2009. Your Company had a 51% stake in
  18. 18. APCCPL. The balance 49% of the equity in APCCPL was held by Casinos Austria International, who did notwishto provide any matching funds to cover the recurring losses. Your Company did not wish to borrowunilaterally tofund the negative cash flow due to competition from other Casino ships. Your Company had alreadyprovidedsubstantial amounts to APCCPL unilaterally and felt it would be prudent to sell the shareholding inAPCCPLinstead of putting more funds in APCCPL over which the Company had no operational control.On 19thJanuary 2010 your Company entered into a Share Purchase Agreement (SPA) to sell the 51% stake inAPCCPL to Delta Corp Limited whereby all the funds provided to APCCPL would be returned andliabilities as ofthat date and thereafter absorbed by Delta. Subsequently, Delta wished to renegotiate the commercialsand afterprotracted discussions a new SPA was signed on 20thSeptember 2010. Your Company has managed to recovermost of the funds provided to APCCPL and also freed itself from the Corporate Guarantee of Rs.836.40lakhsgiven exclusively by your Company to the Bankers for a loan provided to APCCPL.Pursuant to the sale of the 51% investment, APCCPL has ceased to be a subsidiary of the Company w.e.f.20thSeptember 2010.The other subsidiary Company Advani Flight Catering Services Private Limited has not yet commencedoperations.The Ministry of Corporate Affairs, New Delhi has vide its Order No. 47/373/2010-CL-III dated 17
  19. 19. thMay 2010exempted the Company from the requirement of attaching the Financial statements of its subsidiaries interms ofSection 212(1) of the Companies Act, 1956. As per the order, a gist of the financial statements of thesubsidiarycompanies has been prepared and forms part of the annual report. The accounts of the subsidiarycompaniesand other detailed information will be made available to the Shareholders on request.Directors’ Responsibility Statement:As required by Section 217 (2AA) of the Companies Act, 1956 the Directors hereby confirm that:(i) In the preparation of the annual accounts, the applicable accounting standards have been followedand thatthere are no material departures;(ii) Appropriate accounting policies have been selected and applied consistently and judgments andestimatesmade that are reasonable and prudent so as to give a true and fair view of the state of affairs of thecompany at the end of the financial year and of the profit of the Company for that period;(iii) Proper and sufficient care has been taken for the maintenance of adequate accounting records inaccordancewith the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and forpreventing fraud and other irregularities.(iv) The annual accounts have been prepared on a ‘going concern’ basis.Directors:Mr. K. Kannan and Mr. Prakash V. Mehta, Directors of the Company, retire by rotation at the ensuingAnnualGeneral Meeting and are eligible for re-appointment.Corporate Governance:
  20. 20. The Company has complied with the requirements regarding the Corporate Governance as requiredunder Clause49 of the Listing Agreement.The report on Management Discussion and Analysis, Corporate Governance as well as the Auditors’Certificateon the compliance of Corporate Governance, form part of the Annual Report.10dvani Hotels & Resorts (India) LimitedAnnual Report 2009 - 2010Additional Information:(a) Conservation of EnergyEnergy conservation continues to receive utmost priority and the Company monitors energy costs andreviews the consumption of energy on a regular basis. The Company wherever necessary also initiatesappropriate measures to reduce consumption of electricity.(b) Technology AbsorptionThe relevant particulars relating to technology absorption in terms of Rule 2 of the Companies(Disclosure ofParticulars in the Report of the Board of Directors) Rules 1988 is not applicable as the hotel forms a partofthe service industry and as such the Company does not have any significant manufacturing operations.(c) Foreign Exchange Earnings and OutgoThe Company’s foreign exchange earnings were Rs.103,564,239/- (previous year Rs.154,289,333/-)whereasthe outgo was only Rs.49,396,473/- (previous year Rs.58,404,481/-). The relevant details are given in thenotes to Accounts.Auditors:M/s. J. G. Verma & Co., Chartered Accountants, Mumbai, Auditors of the Company retire at theconclusion of
  21. 21. the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment.Particulars of Employees:The information required under Section 217 (2A) of the Companies Act, 1956 read with the Companies(Particularsof Employees) Rules, 1975 is given in the annexure.Acknowledgment:Your Directors thank the Company’s bankers, investors, the WYNDHAM Hotel Group International andclientelefor their continued support during the year. Your Directors also appreciate the hard work put in by allemployeesof the Company.For and on behalf of the Board of DirectorsPlace: Mumbai SUNDER G. ADVANIDate: November 4, 2010 Chairman & Managing Director11dvani Hotels & Resorts (India) LimitedANNEXURE TO THE DIRECTORS’ REPORTThe information required under Section 217 (2A) of the Companies Act, 1956 read with the Companies(Particularsof Employees) Rules, 1975 and forming part of the Directors’ Report for the year ended 31stMarch 2010, is asfollows:Employees Name Designation Age in Qualification Experience Date of Remuneration Last Employmentyears in years Commence- Rupees heldmentMr. Sunder G. Chairman & 71 Strategic Hospitality Management 49 01.03.88 5,300,000 Chairman &
  22. 22. Advani Managing Financial Management Courses Managing Director,Director Cornell University (USA) Hotel Airport PlazaMumbaiMasters in Business Administrationfrom The Wharton School (USA)B.S. — Business AdministrationTemple University (USA)Innkeepers DiplomaHoliday Inn University (USA)Mr. Haresh G. Executive 60 B.S. Cornell University (USA) 41 01.03.88 3,307,200 Director, HotelAdvani Director School of Hotel Administration Airport Plaza,MumbaiMr. Sanjay Vice 44 M Com. Post Graduate in 21 15.11.08 2,541,500 Managing Director,Saxena President – Marketing Management MCI ManagementSales & (India) Pvt. Ltd.MarketingNotes:1. ‘Remuneration’ includes salary, commission, allowances and taxable value of perquisites.2. The above appointments are contractual.3. Mr. Sunder G. Advani, Mr. Haresh G. Advani and Mrs. Menaka S. Advani are related to each other.4. Mr. Sunder G. Advani holds 9,376,393 equity shares (20.29%) and Mr. Haresh G. Advani holds5,709,886 equity shares (12.35%).For and on behalf of the Board of DirectorsPlace: Mumbai SUNDER G. ADVANIDate: November 4, 2010 Chairman & Managing Director12
  23. 23. dvani Hotels & Resorts (India) LimitedAnnual Report 2009 - 2010MANAGEMENT DISCUSSION AND ANALYSIS REPORT1. DEVELOPMENTS AND OUTLOOK FOR YOUR COMPANY:The Management Discussion and Analysis Report which is part of the Annual Report includes theperformance ofthe Company and developments that may affect the likely prospects for the future. The discussionrelates to theCompany’s hotel on a standalone basis.The last two years have been difficult ones for the world economy and the hospitality industry. Theperformance ofyour Company is affected by several exogenous factors such as the growth of the GDP of those countriesfromwhich Goa receives major portion of its tourists as well as the growth of the Indian economy. YourCompany’s 5-stardeluxe hotel relies principally on two diverse segments. Historically, your Company’s hotel has beendependent onthe foreign market particularly tourists from Europe, who come to Goa between November and April toescape theharsh European winters. In recent years, there has been an increase in domestic tourists, who come toGoa to holdconferences, get a short holiday break or to celebrate family events such as weddings or anniversaries.2. THE FOREIGN MARKET:Europeans still wished to take their customary winter holidays in a warm climate. However, many,particularly in theUK, could not do so as they had lost or were afraid of losing their jobs and their homes as a result of thedownturnin the UK economy. Charter flights to Goa from the UK this season were further reduced to only 6weekly flights due
  24. 24. to decrease in demand. However, tourists from the UK at our resort have increased in the 2010-2011season. TheGerman economy has not bounced back. There were 2 weekly flights from Germany, but due to poorload factors,the number of seats to Goa have been reduced in the 2010-2011 season. The only saviour last year wastherelative strength of the economy of Russia, which provided majority of the tourists who visited Goa fromabroad. Thenumber of weekly charter flights from Russia and CISR to Goa is expected to go up by 50% in the comingseason.This may not necessarily lead to a similar increase in the amount of business for the upmarket hotels, asairlineswill need to drop rates and fill seats with low-paying passengers due to increased supply. New Russiantouroperators have expressed an interest in Goa not only from Moscow but from other Russian cities andthe nearbyCISR States. There is also interest from Poland though there is concern that the Indian embassy inPoland is notissuing visas readily.Goa is perceived as good value for money as most hoteliers have not increased their rates due to thereduction offoreign tourist arrivals in the winter season of 2009-10 when rooms were available even during the NewYear. Thescheduled flights to Goa started by Qatar Airways and Air Arabia will make it easier for tourists to reachGoa.Aeroflot, the national carrier, which had discontinued its long standing Moscow to Mumbai flights hasfound itfeasible to start Moscow to Goa operations this season. More passengers are travelling by scheduledairlines toGoa, as the difference in cost between flying on a scheduled flight and a chartered flight is decreasing.The work on
  25. 25. the new terminal at Dabolim airport with several new aero bridges has begun in full swing and this willmake itpossible to accommodate more aircrafts and passengers in Goa.The advantage of having more foreign tourists is that they stay for an average of 10 days throughout thesix monthswinter season beginning in November and ending in April when rates at all Goa hotels are higher.Moreover, theycome to Goa to get away from the cold winters in Europe and not just for sightseeing. They are attractedto thebeautiful beaches of Goa and the friendliness of the people as well as the pollution-free environment.The Russiansand their neighbours from CISR countries are fond of Goa as an attractive holiday destination. Theeconomies ofthe UK and Germany are also looking brighter. Tourists from these countries plan long distance holidayseveryyear, but try to find a cheaper option in bad times. As such, it was not possible to obtain increases in theroom ratesdue to decrease in demand and increase in supply of rooms, both in the lower and higher categorysegments.Moreover the strengthening of the Rupee has made our rates more expensive as our rates are quoted inRupees.3. THE INDIAN MARKET:Domestic tourists to Goa are increasing by leaps and bounds.The continuing improved performance of the Indian economy has led to more funds available withCorporates andindividuals for travel. Traditionally, individuals and families have always been inclined to travel overseasas the airfares between Delhi and Singapore / Bangkok have been close to those prevailing between Delhi andGoa. Thenew low-cost carriers with their new planes which are not yet permitted to fly overseas have beenoffering very
  26. 26. attractive fares of-late which have contributed to the increase in domestic travel to Goa. We, in India,like to travel13dvani Hotels & Resorts (India) Limitedwith our families on a holiday and the total cost of the holiday is an important consideration. Moreover,Goa offerssomething for everyone and a choice of all classes of accommodation. More direct flights to Goa havebeen addedfrom such cities as Bangalore, Jaipur, Hyderabad and convenient connecting flights from Kolkata,Chennai etc.Goa as a wedding venue is becoming more popular as Goa offers a cheaper option with more flexibilityandavailability of rooms on auspicious dates.Corporates have always preferred to hold their sales and strategy meetings in a carefree environmentwhere thereare few distractions. Goa has been and will continue to be a favourite destination with its closeness toMumbai, thecommercial capital of India and better air connectivity to the rest of India. Goa has the potential tobecome theleading center for the Meetings Incentive Conventions and Exhibitions (MICE) market, if necessary,infrastructure isimproved.4. RELATIVE ATTRACTIVENESS OF YOUR COMPANY’S RESORT:Both the foreign and the Indian clients have appreciated the remarkable architecture of your Company’shotel. Thelarge beach frontage on the white sands of Varca, the best beach in Goa, has been sought out more bythe foreigntourists who are connoisseurs of beaches. The golf course facing the ocean is another unique attraction.The layoutof your Company’s 5 Star Deluxe Beach Resort is ideal for foreign tourists who prefer to have a largeswimming
  27. 27. pool with adequate surrounding deck area for sun bathing. The placement of a swim-up bar in thecentre of one ofthe largest swimming pools in Goa is an added unique feature. The swimming pool and separatechildren pool isalso a major attraction for corporate events and for families. The monsoon proof large Atrium lobby andtheadditional conference hall will attract more domestic business in the rainy season.The location of the resort very close to the main railway station is also a major advantage for domesticclients.5. OPPORTUNITIESYour Company’s hotel was built on one of the best beaches in Goa and close to the upmarket Leela andTajExotica hotels.The hotel is 20-years old and is well known as the first international hotel in Goa.The additional land purchased adjoining the hotel can be merged with the existing complex to createnewfacilities based on the demand.The tourists from Russia are growing and the Ramada Caravela Beach Resort is well-known in thatmarkethaving received many awards from Russian operators.The initial cost of building has been low and the hotel can effectively compete with new hotels and offervalue formoney.Ramada being a US brand and part of the WYNDHAM Group is likely to get more US visitors after theObamavisit and the improvement in US partnerships.Increase in flights from UAE is likely to benefit our hotel, as the Ramada brand is well established in UAE.Ramada is becoming more known in India with more hotels opening in other Indian cities.
  28. 28. The Government of Goa has realized the importance of the tourism industry and is successfully lobbyingforfunds from the Central Government to improve tourist infrastructure.The airport capacity being increased will lead to more flights to Goa.Hotels are now eligible for loans with a 15-year repayment facility. There will be increased opportunityto borrowfor any expansion due to the low debt to equity ratio.Leisure hotels are seeing a larger growth in the MICE market (Meeting Incentive Convention andExhibitions), asit is difficult to take large groups overseas for such event – also, applies to the wedding market.6. THREATSYour Company has reduced the currency risk caused by the appreciation of the Rupee by quoting ratesonly inIndian rupees.Sri Lanka is likely to take away both European and domestic tourists as the civil war has ended.There is always some possibility of law and order problems in some part of India, which may affecttourist flowto Goa.Goa is the only area where the Company has its business. Any adverse publicity for Goa can affect theCompany’sfortunes.The price of aviation fuel may make air travel too expensive.Any outbreak of an infectious disease in India may impact flow of tourists.14dvani Hotels & Resorts (India) LimitedAnnual Report 2009 - 20107. FINANCIAL RESULTS/OPERATIONAL PERFORMANCE
  29. 29. The financial results of your Company, on a standalone basis and on a consolidated basis are containedin theAnnual Report.The operating revenues of the hotel unit increased by 8% from Rs.2,932 lakhs in F.Y. 2008-09 to Rs.3,173lakhs forthe F.Y. 2009-10. The room revenue for the year has increased from Rs.1909 lakhs to Rs.2004 lakhs. Theaverageoccupancy has increased from 53% to 67% while the average rate has decreased from Rs.5028 toRs.4094. Thefood and beverage income of hotel unit has increased by about 23%.The Company had sold its flight catering unit in June 2008, which had made a turnover of Rs.136 lakhs inF.Y.2008-09 till the date of its sale. The staff cost has gone up by 6.5% as retention of experienced staff isrequired inthe competitive environment. The EBITDA decreased by 37% from Rs.587 lakhs to Rs.371 lakhs mainlydue to nonreceipt of any dividend from the erstwhile casino subsidiary as against Rs.166 lakhs received during thepreviousyear.The interest cost declined by almost 25% from Rs.166 to Rs.124 lakhs due to repayments of securedloans andlower LIBOR during the year. Depreciation has remained almost same during the year in comparisonwith last year.The profit from Ordinary Activities before Tax has remained almost the same except that there was nodividend fromthe erstwhile subsidiary during the year as against a dividend of Rs.166 lakhs in the previous year.The profit after tax increased mainly due to reversal of the provision made for diminution in the value ofinvestmentas the sale of the said investment in the erstwhile subsidiary has been completed after the close of thefinancialyear.
  30. 30. 8. INTERNAL CONTROL SYSTEM AND ADEQUACY:The internal control systems set up in terms of financial reporting, efficiency of operations andcompliance withvarious rules; regulations, etc. are adequate and effective. In order to enhance the control processfurther, eachdepartment is asked by the Management to justify variances and discrepancies pointed out by theInternalAuditors.The review of the adequacy of the internal control procedures and their implementation is closelymonitored bythe Audit Committee of the Board of Directors.9. HUMAN RESOURCES:The Company has streamlined its recruitment and selection policies while giving emphasis on retainingthetrained staff. Continuous training is conducted during the off season period. Opportunities are given tothose withpotential to move upwards in the organization.Accordingly, the Company has formulated various programmes like the employees reward recognitionprogrammeto encourage improved performance that results in greater guest satisfaction. This programme alsohelpsemployees to contribute towards cost saving, productivity, efficiency and better customer service. Therelationswith the employees during the year were very cordial.10. CAUTIONARY STATEMENTComments made in this analysis describing the Company’s objectives, estimates may be “forwardlookingstatements” within the meaning of applicable securities law. These are based on assumptions overwhich the
  31. 31. Company exercises no controls. The Company cannot guarantee the accuracy nor can it be sure that theresultswill occur. Significant factors that can affect the Company’s operations include domestic andinternational economicconditions affecting supply and demand, law and order problems in India, change in tax and otherGovernmentregulations, etc.For and on behalf of the Board of DirectorsPlace: Mumbai SUNDER G. ADVANIDate: November 4, 2010 Chairman & Managing Director15dvani Hotels & Resorts (India) LimitedREPORT ON CORPORATE GOVERNANCECORPORATE PHILOSOPHY:The Company subscribes fully to the basic principles of good corporate governance, the objective ofwhich is toincrease productivity and competitiveness, thus maximize shareholder value. The Company continues toadhereto the philosophy of good Corporate Governance and believes in values of transparency,professionalism,accountability and is also committed to continually evolving and adopting appropriate CorporateGovernance bestpractices.BOARD OF DIRECTORS:Composition of the BoardThe Board of Directors of the Company consists of Executive and Non-Executive Directors, of whomthree areIndependent Directors who are experts in diverse fields. The Independent Directors comprise of 50% ofthe total
  32. 32. strength of the Board of Directors of the Company. The details are as follows:Sr. Name of the Directors CategoryNo.1. Mr. Sunder G. Advani, Chairman & Managing Director Promoter Executive Director2. Mr. Haresh G. Advani, Executive Director Promoter Executive Director3. Mr. K. Kannan Independent Non-Executive Director4. Mr. Prakash V. Mehta Independent Non-Executive Director5. Mr. Anil Harish Independent Non-Executive Director6. Mrs. Menaka S. Advani Non-Executive DirectorDirectors’ AttendanceDuring the year 2009-10, 10 (Ten) Board Meetings were held on 25.04.2009, 12.06.2009, 10.07.2009,30.07.2009,13.08.2009, 25.09.2009, 30.10.2009, 25.11.2009, 19.01.2010 and 29.01.2010. Majority of the Directorsattendedthe Meetings. Leave of absence was granted to the Directors who expressed their inability to attend theMeetings.The details of attendance of Directors at the Board Meetings and at the 22ndAnnual General Meeting as well asthe details of their other Directorships / Committee Chairmanships or Memberships are as follows:Sr. Name of Directors Designation No. of Attendance No. of No. of other CommitteeNo. Board at the last Outside Chairmanships/MembershipsMeetings AGM held on Directorships (excluding the Company)attended 25.09. 2009 # $Chairmanship Membership1. Mr. Sunder G. Advani Chairman &
  33. 33. Managing Direcor 10 Present None None None2. Mr. Haresh G. Advani ExecutiveDirector 10 Present None None None3. Mr. K. Kannan Director 10 Present 7 2 64. Mr. Prakash V. Mehta Director 10 Present 8 None 75. Mr. Anil Harish Director 9 Present 13 5 76. Mrs. Menaka S. Advani Director 10 Present None None None# Excludes Directorships contemplated under Section 278 of the Companies Act, 1956.$ Includes only membership/s of Audit Committee and Shareholders/Investors Grievance Committee ofother Public Limited Companies .16dvani Hotels & Resorts (India) LimitedAnnual Report 2009 - 2010AUDIT COMMITTEE:The composition of the Committee and particulars of meetings attended by the Members of the AuditCommitteeare as under. During the year under review, 5 meetings of the Audit Committee were held on25.04.2009,30.07.2009, 13.08.2009, 30.10.2009 and 29.01.2010.Sr. Name of the Member Designation No. of Committee Meetings attendedNo. in the year under review1. Mr. K. Kannan Chairman 52. Mr. Prakash V. Mehta Member 53. Mrs. Menaka S. Advani Member 5The Audit Committee comprises of only Non-Executive Directors of which two-thirds are IndependentDirectors.
  34. 34. The constitution of the Audit Committee also meets the requirements of the provisions of Section 292Aof theCompanies Act, 1956.The Scope and broad terms of reference of the Audit Committee are as follows:— To oversee the Company’s financial reporting process and disclosure of its financial information.— To recommend the appointment of Statutory Auditors and fixation of remuneration.— To review and discuss with the Auditors about internal control systems, the scope of audit includingtheobservations of the Auditors, adequacy of internal audit functions, major accounting policies, practicesandentries, compliance with accounting standards and with the Stock Exchanges and legal requirementsconcerning financial statements and related party transactions, if any.— To review the Company’s financial and risk management policies and discuss with the internalauditors.— To follow-up significant findings thereon.— To review the quarterly, half yearly and annual financial statements before submission to the BoardofDirectors.— To investigate into any matter relating to the items specified in Section 292A of the Companies Act,1956, oras may be referred to by the Board and for this purpose to seek any relevant information contained intherecords of the Company and also to seek professional advice, if necessary.— To obtain external advice, legal or other professional advice.— To secure attendance of outside parties with relevant expertise, if it considers necessary.— To seek information from any employeeREMUNERATION COMMITTEE:The composition of the Remuneration Committee and particulars of meetings attended by the Membersof the
  35. 35. Remuneration Committee are as under. The Committee approves the annual salaries, performancecommission,service agreements and other employment conditions of the Executive Directors and relatives of theDirectors.During the year under review one Meeting of the Remuneration Committee was held on 12.06.2009.Sr. Name of the Member Designation No. of Committee Meetings attendedNo. in the year under review1. Mr. K. Kannan Chairman 12. Mr. Anil Harish Member 13. Mrs. Menaka S. Advani* Member 04. Mr. Prakash V. Mehta Member 1* Resigned w.e.f. 4/11/201017dvani Hotels & Resorts (India) LimitedThe scope and broad terms of reference of the Remuneration Committee are as follows:— To review, assess and recommend the appointment of Executive and Non-Executive Directors andrelativeof Directors from time to time;— To periodically review the remuneration package of the Executive Directors, relative of Director andrecommendsuitable revision;— To recommend compensation to the Non-Executive Directors in accordance with the Companies Act,1956.DETAILS OF REMUNERATION PAID TO THE EXECUTIVE DIRECTORS DURING THE YEAR ENDEDMARCH 31, 2010.Sr. Name of the Director Salary Perquisites Commission Service NoticeNo. (Basic + HRA) Tenure Period
  36. 36. Rs. Rs. Rs.1. Mr. Sunder G. Advani 48,00,000 5,00,000 0 5 years 3 monthsChairman & Managing Director2. Mr. Haresh G. Advani 29,95,200 3,12,000 0 5 years 3 monthsExecutive DirectorDETAILS OF SITTING FEES PAID TO NON-EXECUTIVE DIRECTORS DURING THE YEAR ENDEDMARCH 31, 2010.Name of the Director Mr. K. Kannan Mr. Prakash V. Mehta Mr. Anil Harish Mrs. Menaka S. AdvaniSitting Fees Paid (Rs.) 3,20,000 3,20,000 2,00,000 3,00,000SHAREHOLDERS/INVESTORS GRIEVANCE COMMITTEE:The Committee comprises of the following two Non-Executive Directors and two Executive Directors:Sr. Name of the Member DesignationNo.1. Mrs. Menaka S. Advani Chairperson & Non-Executive Director2. Mr. Sunder G. Advani Member & Managing Director3. Mr. Haresh G. Advani Member & Executive Director4. Mr. K. Kannan Member & Non-Executive Independent DirectorThe Company has constituted a Shareholders/Investors Grievance Committee to look into the Redressalofcomplaints of shareholders and investors relating to transfer of shares, non-receipt of Annual report,dividendsetc. The Chairperson of the Committee is a Non-Executive Director.The Board has designated Mr. Kumar Iyer, Company Secretary as the Compliance Officer.The Company Secretary acts as the Compliance Officer and regularly interacts with the Registrar & ShareTransfer Agents (RTA) to ensure that the complaints/ grievances of the shareholders/investors areattended to
  37. 37. without delay and where deemed expedient, the complaints are referred to the Chairperson of theCommittee ordiscussed at its meetings.During the year under review one meeting of the Shareholders/Investors Grievance Committee was heldon 30thOctober, 2009.During the year under review, the Company received 27 shareholder complaints, which were promptlyrespondedto and resolved to the satisfaction of the respective shareholders and as on 31.03.2010 there were nopendingcomplaints.18dvani Hotels & Resorts (India) LimitedAnnual Report 2009 - 2010SHARE TRANSFER COMMITTEE:The Committee comprises of the following two Executive Directors:Sr. No. Name of the Member Designation1. Mr. Sunder G. Advani Member & Managing Director2. Mr. Haresh G. Advani Member & Executive DirectorThe Share Transfer Committee looks into the approval of share transfers, transmissions, issue ofduplicate sharecertificates etc.GENERAL BODY MEETINGS AND POSTAL BALLOT:Annual General Meetings held during the last 3 yearsParticulars FY 2008-09 FY 2007-08 FY 2006-07Date 25.09.2009 28.08.2008 26.09.2007
  38. 38. Location ‘Rangaswar’, 4th Floor, Kamalnayan Bajaj Hall, Seminar Hall of K.C. CollegeChavan Centre, Ground Floor, Bajaj Bhavan, Dinshaw Wachha Road,Gen. Jagannath Bhosale Marg, Jamnalal Bajaj Marg, Churchgate,Nariman Point, Nariman Point, Mumbai-400 020Mumbai-400 021 Mumbai-400 021Time 11.00 a.m. 11.00 a.m. 3.00 p.m.All the Resolutions as set out in the respective notices were passed unanimously by a show of hands bytheMembers of the Company present at the said Annual General Meetings.The Company has not conducted any business through postal ballot during the year under review.DISCLOSURES:➢ During the year, the Company has not entered into any material significant related party transactionswithits Directors/Promoters that may have potential conflict with the interest of the Company at large. Asrequired by the Accounting Standard AS-18, the details of Related Party Transactions are given in theNotes to the Accounts.➢ There was no instance of non-compliance on any matter relating to the capital markets during thepast threeyears.➢ The Company has complied with all the mandatory requirements of Clause 49 relating to CorporateGovernance except Clause 49 (III) (i) due to the resignation of the Company’s Independent Director fromthe board of it’s subsidiary Advani Pleasure Cruise Company Private Limited (APCCPL) w.e.f.12thJune2009. The said APCCPL has ceased to be the Company’s subsidiary w.e.f. 20thSeptember 2010.
  39. 39. ➢ Pursuant to the provisions of Sub-Clause V of Clause 49 of the Listing Agreement with the StockExchanges, the Chairman & Managing Director (CMD) and the General Manager Finance (CFO) haveissued a Certificate to the Board, for the financial year ended March 31, 2010.MEANS OF COMMUNICATION:➢ The Company communicates with the shareholders at large through its Annual Report, publication offinancial results, press releases and by submission and filing of reports and returns with the stockexchanges and all statutory bodies.➢ The Financial results are usually published in the ‘Business Standard’ and/or ‘The Free Press Journal’(in English) and ‘Navshakti’ or ‘Sakal’ (in Marathi).➢ Management Discussion and Analysis Report forms part of this Annual Report.19dvani Hotels & Resorts (India) LimitedSTATUS OF COMPLIANCE WITH NON-MANDATORY REQUIREMENTS:(a) Remuneration Committee:The Company has a Remuneration Committee, the details whereof are furnished above in this Report.(b) Tenure of Independent Directors:The Board has not laid down any specific maximum tenure for the Independent Directors.(c) Training of Board Members:The Directors of the Company are senior professionals of high standing and experience in corporatesectorand the industry in which the Company operates. They are being kept informed of the business model,growth factors and the risk profile of the Company. Hence, the Company has not laid down any formaltraining mechanism for its Directors.(d) Whistle Blower Policy:Though the Company does not have a formal Whistle Blower Policy, the Company takes cognizance ofcomplaints made and suggestion given by the employees and others. Even anonymous complaints are
  40. 40. looked into and whenever necessary, suitable corrective steps are taken. The Company promotes ethicalbehaviour in all its business activities. All employees are free to approach the Audit Committee to raisetheirconcern relating to fraud, malpractice or any other activity or event which is against the Company’sinterest.GENERAL SHAREHOLDERS INFORMATION:➢ 23rd Annual General MeetingDate & Time : Wednesday, December 15, 2010 at 11.00 a.m.Venue : Rangaswar, 4th Floor, Chavan Centre, General Jagannath Bhosale Marg,Nariman Point, Mumbai - 400 021➢ Financial CalendarResults for the Quarter ended June 30, 2010 August 12, 2010Results for the Quarter ending Sept. 30, 2010 November 4, 2010Annual General Meeting December 15, 2010Results for the Quarter ending Dec. 31, 2010 Second week of February, 2011Results for the Quarter ending March 31, 2011 Second week of May, 2011➢ Date of Book ClosureFrom December 11, 2010 to December 15, 2010 (both days inclusive) for the purpose of payment ofDividend for the year 2009-10 and Annual General Meeting for the financial year ended March 31, 2010.➢ Listing on Stock ExchangeBombay Stock Exchange Limited (Stock Code – 523269)National Stock Exchange of India Limited (Stock Symbol – ADVANIHOTR)Delhi Stock Exchange Association Limited (Stock Code – 5924)➢ Market Price DataThe high and low Market Price of the Company’s shares traded on the Bombay Stock Exchange Limited,during each month in the financial year ended March 31, 2010 are given below.
  41. 41. Month High Low Close Price Month High Low Close PriceRs. Rs. Rs. Rs. Rs. Rs.April’ 09 31.85 26.35 27.55 October’09 61.15 54.55 56.50May’ 09 39.45 27.35 39.45 November’09 59.55 49.20 50.10June’ 09 50.00 37.10 40.85 December’09 57.00 49.25 55.10July’ 09 41.85 36.00 38.25 January’10 64.90 50.00 53.10August’ 09 44.10 32.00 44.10 February’10 56.45 47.00 49.80September’ 09 71.65 46.30 59.25 March’10 50.00 38.50 40.1020dvani Hotels & Resorts (India) LimitedAnnual Report 2009 - 2010➢ Performance of Company’s share price in comparison to BSE SensexAHRIL Share Price / BSE Sensex From April 2009 to March 201017528164301635817465169261589617 12 7156671567014625114 0 314494
  42. 42. 40.1049.8053.1055.1050.1056.5059.2544.1038.2540.8539.4527.5505,00010,00015,00020,000Apr09 May09 June09 July09 Aug09 Sept09 Oct09 Nov09 Dec09 Jan10 Feb10 Mar10BSE Sensex1060110AHRIL Closing Price at the end of month (Rs.)BSE Sensex AHRIL Share Prices➢ Registrar and Share Transfer Agent
  43. 43. Datamatics Financial Services Limited(Unit: Advani Hotels & Resorts (India) Limited)Plot No. B5, Part B, Cross Lane,MIDC Marol, Andheri (East), Mumbai - 400 093.Telephone No: (022) 66712237 Fax No: (022) 66712209Contact Person: Mr. Salim Shaikh➢ Share Transfer SystemThe Share Transfer Committee constituted by the Board considers and approves all shares related issueslike transfer, transmission, issue of duplicate shares, dematerialization, etc. The transfer formalities areattended to on fortnightly basis by Datamatics Financial Services Ltd. All the share certificates arereturnedwithin 21 days from the date of lodgment provided the transfer instruments are valid and complete inallrespects.➢ Distribution of Shareholding as on March 31, 2010Range No. of % of No. of % of(No. of Shares) Shareholders Total Shares Total1-500 3,630 66.85 13,13,722 2.84501-1000 926 17.05 8,66,822 1.881001-2000 396 7.29 6,31,995 1.372001-3000 217 4.00 5,57,051 1.203001-4000 46 0.85 1,69,447 0.374001-5000 90 1.66 4,41,538 0.965001-10000 55 1.01 4,25,977 0.9210001 and above 70 1.29 4,18,12,698 90.46Total 5,430 100.00 4,62,19,250 100.00
  44. 44. 21dvani Hotels & Resorts (India) Limited➢ Category of Shareholding as on March 31, 2010Category No. of Shares % of TotalPromoters & Promoter Group 2.29,91,579 49.74Mutual Funds 58,500 0.13Bank/FIs/Insurance Companies 2,500 0.01Foreign Institutional Investors 1,36,982 0.29Corporate Bodies Corporate 1,75,29,788 37.93NRIs/OCBs 7,50,542 1.62General Public 47,49,359 10.28Total 4,62,19,250 100.00➢ Shares held by Non-Executive DirectorsSr. No. Non-Executive Directors No. of Shares held as on 31-03-2010 1. M. K. Kannan NIL2. Mr. Prakash V. Mehta 5003. Mr. Anil Harish NIL4. Mrs. Menaka S. Advani 13,05,630➢ Demat of shares and liquidityThe Company’s shares are held in the dematerialized form by National Securities Depository Limited andthe Central Depository Services (India) Limited under the ISIN No. INE199C01026. Out of the total EquityShare Capital, 93.50% is held in dematerialised form as on March 31, 2010. Trading in Equity Shares oftheCompany is permitted only in dematerialised form w.e.f. 28.05.2001 as per the Notification issued bytheSEBI.
  45. 45. ➢ As on date the Company has not issued GDRs/ADRs/Warrants or any other convertible instruments.➢ LocationHotelRamada Caravela Beach ResortVarca Beach, Varca Village, Salcette, Goa – 403 721Telephone No: (0832) 6695000➢ Address for CorrespondenceAdvani Hotels & Resorts (India) Limited1009/1010, Dalamal Tower,211, Nariman Point, Mumbai – 400 021Telephone No: (022) 2285 0101 Fax No: (022) 2204 0744Email ID: cs.ho@advanihotels.comCODE OF CONDUCT:The Board of Directors of the Company has laid a code of conduct for the Directors and seniormanagement. Thecode of conduct is posted on the Company’s website. All Directors and designated personnel in theseniormanagement have affirmed compliance with the code for the year under review.For and on behalf of the Board of DirectorsPlace: Mumbai SUNDER G. ADVANIDate: November 4, 2010. Chairman & Managing Director22dvani Hotels & Resorts (India) LimitedAnnual Report 2009 - 2010AUDITORS’ CERTIFICATE ON CORPORATE GOVERNANCETo the Members of
  46. 46. Advani Hotels & Resorts India LimitedWe have examined the compliance of Corporate Governance of ADVANI HOTELS & RESORTS (INDIA)LIMITED for the year ended 31stMarch 2010 as stipulated in Clause 49 of the Listing Agreement of the saidCompany with stock exchanges.The compliance of conditions of Corporate Governance is the responsibility of the management. Ourexaminationwas limited to procedures and implementation thereof, adopted by the Company for ensuring thecompliance ofthe conditions of Corporate Governance. It is neither an audit nor an expression of opinion on thefinancialstatements of the Company.In our opinion and to the best of our information and according to the explanations given to us and therepresentations made by the Directors and the Management, we certify that the Company has compliedwith theconditions of Corporate Governance as stipulated in the above mentioned Listing Agreement exceptClause 49(III) (i) due to the resignation of the Company’s independent director from the board of it’s subsidiaryAdvaniPleasure Cruise Company Private Limited (APCCPL) w.e.f. 12thJune 2009. The said APCCPL has ceased to bethe Company’s subsidiary w.e.f. 20thSeptember 2010 .We state that no investor grievances are pending for a period exceeding one month against theCompany as per
  47. 47. the records maintained by the Share Transfer and Shareholders / Investors Grievance Committee.We further state that such compliance is neither an assurance as to the future viability of the Companynor theefficiency or effectiveness with which the Management has conducted the affairs of the Company.For J.G. VERMA & CO.Chartered AccountantsRegistration No. 111381WJ.G. VERMAPlace: Mumbai PartnerDate: November 4, 2010 Membership No. 500523dvani Hotels & Resorts (India) LimitedAUDITORS’ REPORT TO THE MEMBERSWe have audited the attached Balance Sheet of ADVANI HOTELS & RESORTS (INDIA) LIMITED, as at31stMarch, 2010 and also the Profit and Loss Account and the Cash Flow Statement of the Company forthe year ended on that date annexed thereto. These financial statements are the responsibility of theCompany’s management. Our responsibility is to express an opinion on these financial statements basedonour audit.We conducted our audit in accordance with auditing standards generally accepted in India. Thosestandardsrequire that we plan and perform the audit to obtain reasonable assurance about whether the financialstatementsare free of material misstatement. An audit includes examining, on a test basis, evidence supporting the
  48. 48. amounts and disclosures in the financial statements. An audit also includes assessing the accountingprinciplesused and significant estimates made by management, as well as evaluating the overall financialstatementpresentation. We believe that our audit provides a reasonable basis for our opinion.As required by the Companies (Auditor’s Report) Order, 2003, issued by the Central Government of Indiain termsof sub-section (4A) of Section 227 of the Companies Act, 1956, and on the basis of such checks as weconsidered appropriate, we enclose in the Annexure a statement on the matters specified in paragraphs4 and 5of the said Order.Further to our comments in the Annexure referred to above, we report that:1. We have obtained all the information and explanations, which to the best of our knowledge andbelief werenecessary for the purpose of our audit.2. In our opinion, proper books of account as required by law have been kept by the Company so far asappears from our examination of those books.3. The Balance Sheet, Profit and Loss Account and Cash Flow Statement, dealt with by this Report, are inagreement with the books of account.4. In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement comply with theapplicable Accounting Standards referred to in sub-section (3-C) of Section 211 of the Companies Act,1956.5. On the basis of written representations received from the Directors of the Company and taken onrecord bythe Board of Directors, we report that none of the directors of the Company is disqualified as on 31stMarch,2010 from being appointed as a director under clause (g) of sub-section (1) of Section 274 of the
  49. 49. Companies Act, 1956.6. In our opinion and to the best of our information and according to the explanations given to us, thesaidaccounts, read together with the significant accounting policies stated in Schedule “K” and the othernotes appearing thereon, give the information required by the Companies Act, 1956, in the manner sorequired and give a true and fair view in conformity with the accounting principles generally accepted inIndia:(i) in the case of the Balance Sheet, of the state of the affairs of the Company as at 31st March, 2010;(ii) in the case of Profit and Loss Account, of the profit of the Company for the year ended on that date;and(iii) in the case of Cash Flow Statement, of the cash flows of the Company for the year ended on thatdate.For J.G. VERMA & CO.Chartered AccountantsRegistration No. 111381WJ.G. VERMAPlace: Mumbai PartnerDate: November 4, 2010 Membership No. 500524dvani Hotels & Resorts (India) LimitedAnnual Report 2009 - 2010ANNEXURE REFERRED TO IN OUR REPORT OF EVEN DATE1. (a) The Company has maintained proper records showing full particulars including quantitative detailsand situationof its fixed assets.(b) The fixed assets were physically verified during the year and after the close of the year by themanagement. No
  50. 50. material discrepancies were noticed by the Management on such physical verification as compared tobookrecords.(c) In our opinion, the Company has not disposed off a substantial part of its fixed assets during the yearand thegoing concern status of the Company is not affected.2. (a) The inventories have been physically verified during the year by the management. In our opinion,the frequencyof verification is reasonable;(b) The procedures of physical verification of inventories followed by the management are reasonableand adequatein relation to the size of the Company and the nature of its business.(c) On the basis of our examination of the inventory records of the Company, we are of the opinion thattheCompany is maintaining proper records of inventory. Discrepancies, which were noticed on physicalverificationof inventory as compared to book records, were not material and have been properly dealt with in thebooks ofaccount.3. (a) The Company has not granted any loan or advance to companies, firms or other parties covered inthe Registermaintained under section 301 of the Companies Act, 1956 except an interest free advance of Rs.90,908,724/-(maximum balance Rs. 119,416,887/-) being amount due on current account from one ofits subsidiaries, out ofwhich Rs. 25,315,947/- is considered doubtful of recovery and provided for.(b) The terms and conditions of above interest free advance given are prima facie not prejudicial to theinterest ofthe Company except to the extent indicated in 3(a) above.(c) According to the information and explanations given to us, there is no stipulation for repayment ofthe above
  51. 51. advance given by the Company to its subsidiary. However, the entire amount except Rs. 25,315,947/-which isconsidered doubtful by the Management has since been recovered after the close of the year.(d) In view of our comment in paragraph 3 (c) above, clause III (d) of paragraph of the aforesaid Order isnotapplicable to the Company.(e) The Company has not taken any loan, secured or unsecured, during the year from companies, firmsand otherparties covered in the Register maintained under Section 301 of the Companies Act, 1956. In view of thesame,our comments on clauses III (f) and (g) of paragraph (4) of the aforesaid Order are not applicable to theCompany.4. In our opinion, and according to the information and explanations given to us, there is an adequateinternal controlsystem commensurate with the size of the Company and the nature of its business for the purchase ofinventory andfixed assets and for the sale of goods and services. During the course of our audit, no major weaknesseshavebeen noticed in the internal control system.5. To the best of our knowledge and belief and according to the information and explanations given tous, (a) theparticulars of contracts or arrangements referred to in Section 301 of the Companies Act, 1956 havebeen enteredin the register required to be maintained under that section; and (b) such transactions exceeding thevalue ofRupees five lacs in respect of any party during the year have been made at prices, which are reasonablehavingregard to prevailing market prices at the relevant time.6. The Company has not accepted any deposits from the public within the meaning of Section 58A 58AAand other
  52. 52. provisions of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975. Hencetheclause (vi) of the Order is not applicable to the Company.7. In our opinion, the internal audit functions carried out during the year by a firm of CharteredAccountants appointedby the Management have been commensurate with the size of the Company and nature of its business.8. The maintenance of cost records has not been prescribed by the Central Government under Section209(1)(d) ofthe Companies Act, 1956 for any of the products of the Company.9. (a) According to the records of the Company and the information and explanations given to us, theCompany hasbeen generally regular in depositing undisputed statutory dues, including provident fund, investoreducation &protection fund, employees’ state insurance, income-tax, sales-tax, wealth-tax, service tax, customsduty, exciseduty, cess and other applicable statutory dues with the appropriate authorities during the year . TheCompany’soperations do not give rise to any excise duty liability.25dvani Hotels & Resorts (India) Limited(b) According to the information and explanations given to us, there are no undisputed amounts payablein respectof undisputed statutory dues as at 31stMarch, 2010 which were outstanding for a period of more than six monthsfrom the date they became payable.(c) According to the information and explanations given to us and on the basis of our examination of thedocuments
  53. 53. and records, there are no cases of non-deposit with appropriate authorities of disputed dues of income-tax,sales-tax, wealth tax, service tax, customs duty, excise duty, cess except the following:Name of the Nature of dues Amount Period to which Forum where thestatute (Rs. in lakhs) the amount dispute isrelates pendingCentral Sales Tax Act, Central Sales tax 12.16 Asst. Years Asst. Commissioner1956 2005-06 to of Commercial Tax2006-07 (Value Added Tax)Income-tax Act, 1961 Income-tax on 10.66 Asst. Years Income-Taxcompletion of 2005-06 Appellate Tribunalregular assessment10. The Company neither had accumulated losses at the end of the financial year nor incurred any cashlosses eitherduring the financial year or preceding financial year.11. According to the records of the Company examined by us and the information and explanationsgiven to us, theCompany has not defaulted in repayment of dues to banks as per loan agreements or extended duedates Therewere no borrowings from any financial institutions or by way of debentures.12. According to the information and explanations given to us, the Company has not granted loans andadvances onthe basis of security by way of pledge of shares, debentures and other securities.13. The provisions of any special statute applicable to chit fund/nidhi/mutual benefit fund / societies arenot applicableto the Company.14. The Company is not a dealer or trader in shares, securities, debentures, and other investments.
  54. 54. 15. According to the information and explanations given to us, the Company has given guarantee forloan taken by itsone of the subsidiaries from a bank, the terms and conditions whereof, in our opinion, are not primafacie prejudicialto the interest of the Company. The said guarantee has since been extinguished after the close of theyear.16. In our opinion on an overall basis, and according to the information and explanations given to us, theterm loanstaken during the year were applied for the purpose for which the loans were obtained.17. According to the information and explanations given to us and on an overall examination of theBalance sheet ofthe Company, we report that funds raised on short term basis have prima facie, not been used duringthe year forlong term investment.18. The Company has not made any preferential allotment of shares to parties and companies coveredin the Registermaintained under section 301 of the Companies Act, 1956.19. The Company has not issued any debentures during the year under audit. Accordingly, the provisionsof clause(XIX) of paragraph 4 of the aforesaid Order are not applicable to the Company.20. The Company has not raised money by public issue during the year. Accordingly, the provisions ofclause (XX) ofparagraph 4 of the aforesaid Order are not applicable to the Company.21. To the best of our knowledge and belief, and according to the information given to us, no fraud onor by theCompany was noticed or reported during the year.For J.G.VERMA & CO.Chartered AccountantsRegistration No. 111381W
  55. 55. J.G.VERMAPartnerMumbai, November 4, 2010 Membership No. 500526dvani Hotels & Resorts (India) LimitedAnnual Report 2009 - 2010BALANCE SHEET AS AT 31ST MARCH, 2010Previous YearSOURCES OF FUNDS: Schedule Rupees Rupees RupeesSHAREHOLDERS’ FUNDS:Share Capital.................................................................... ‘A’ 92,438,500 92,438,500Reserves and Surplus ...................................................... ‘B’ 200,437,464 198,137,495292,875,964 290,575,995LOAN FUNDS:Secured Loans ................................................................. ‘C’ 95,952,256 112,836,915Unsecured Loans............................................................. ‘D’ 61,452,388 12,580,644157,404,644 125,417,559DEFERRED TAX LIABILITY (Net) ...................................... 53,561,105 50,364,744TOTAL................ 503,841,713 466,358,298APPLICATION OF FUNDS:FIXED ASSETS: ‘E’Gross Block (At cost) ............................................................. 666,129,004 669,775,597Less: Depreciation ............................................................ 244,862,538 225,149,888Net Block ........................................................................... 421,266,466 444,625,709Capital Work in Progress ................................................. 363,682 1,785,841
  56. 56. 421,630,148 446,411,550INVESTMENTS ..................................................................... ‘F’ 22,285,000 100,000FOREIGN CURRENCY MONETARY ITEMS TRANSLATIONDIFFERENCE: ....................................................................... 126,174 1,802,657CURRENT ASSETS, LOANS AND ADVANCES: ‘G’Interest accrued ................................................................ 14,755 —Stock .................................................................................. 13,598,464 15,916,533Sundry Debtors ................................................................. 21,364,352 17,497,077Cash and Bank Balances ................................................ 8,840,212 14,408,888Loans and Advances ....................................................... 92,688,368 38,679,658136,506,151 86,502,156LESS: CURRENT LIABILITIES AND PROVISIONS: ‘H’Current Liabilities............................................................. 65,537,428 63,045,329Provisions .......................................................................... 11,168,332 5,412,73676,705,760 68,458,065NET CURRENT ASSETS ..................................................... 59,800,391 18,044,091TOTAL................ 503,841,713 466,358,298SIGNIFICANT ACCOUNTING POLICIES ANDNOTES ON ACCOUNTS...................................................... ‘K’As per our report of even date Signature on the above Balance Sheet and Schedules “A” to “H” and “K”For and on behalf of the BoardFOR J. G. VERMA & CO. SUNDER G. ADVANI HARESH G. ADVANIChartered Accountants Chairman & Managing Director Executive DirectorJ. G. VERMA KUMAR IYER SHANKAR KULKARNIPartner Company Secretary General Manager – Finance (CFO)
  57. 57. Mumbai, November 4, 201027dvani Hotels & Resorts (India) LimitedPROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2010Previous YearSchedule Rupees Rupees RupeesINCOME:Rooms, Restaurant, Bar, Banquets, Flight Cateringand Other Services..................................................................... ‘I’ 316,431,527 305,738,143Other Income.............................................................................. ‘I’ 7,536,532 30,978,274Total................................................................................... 323,968,059 336,716,417EXPENDITURE:Operating and General Expenses ............................................. ‘J’ 278,220,801 269,440,925Managerial Remuneration (Refer Note 15(i)(a) of Part B of Shedule ‘K’) 8,607,200 8,553,738Depreciation ................................................................................. 24,898,280 25,086,088Interest:(a) On Fixed Loans ............................................................... 9,944,553 14,354,585(b) On Other Loans ............................................................... 2,415,611 2,230,32812,360,164 16,584,913Total Expenditure ............................................................ 324,086,445 319,665,664PROFIT/(LOSS) BEFORE EXCEPTIONAL ITEMS .................... (118,386) 17,050,753Less: Exceptional Items (Net) ......................................................... ‘J-1’ 14,704,285 (22,234,243)PROFIT/(LOSS) BEFORE TAXATION......................................... 14,585,899 (5,183,490)Less: Provision for taxationCurrent tax.................................................................................. 3,700,000 7,700,000
  58. 58. Fringe Benefits tax ...................................................................... — 1,158,000Deferred tax Liability/(Asset) ...................................................... 3,196,361 (14,556,203)6,896,361 (5,698,203)7,689,538 514,713PROFIT FOR THE YEAR AFTER TAXProfit brought forward ................................................................. 36,192,312 64,368,446Less: Adjustment on adoption of AS-11 Notification ...................... — 8,690,84736,192,312 55,677,59943,881,850 56,192,312PROFIT AVAILABLE FOR APPROPRIATION:Less: Appropriations made:Proposed Dividend ................................................................ 4,621,925 —Tax on Dividend ..................................................................... 767,644 —5,389,569 —Transfer to General Reserve — 20,000,0005,389,569 20,000,000Balance Profit carried to Balance Sheet ......................................... 38,492,281 36,192,312Basic and Diluted Earnings Per Share (In Rs.) ........................ 0.17 0.01Face value Rs. 2/- per share (Refer note 13 of Part B of Schedule “K”)SIGNIFICANT ACCOUNTING POLICIES ANDNOTES ON ACCOUNTS .......................................................... ‘K’As per our report of even date Signature on the above Profit and Loss Account and Schedules “I” to “K”For and on behalf of the BoardFOR J. G. VERMA & CO. SUNDER G. ADVANI HARESH G. ADVANIChartered Accountants Chairman & Managing Director Executive Director
  59. 59. J. G. VERMA KUMAR IYER SHANKAR KULKARNIPartner Company Secretary General Manager – Finance (CFO)Mumbai, November 4, 201028dvani Hotels & Resorts (India) LimitedAnnual Report 2009 - 2010CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 201031st March, 2010 31st March, 2009Rupees RupeesA. CASH FLOW FROM OPERATING ACTIVITIES:Net Profit/(Loss) before tax and adjustments .................................................................... 14,585,899(5,183,490)Adjustments for:Depreciation .......................................................................................................................... 24,898,28025,086,088Loss on sale of assets........................................................................................................ 1,286,6522,187,818Profit on sale of Flight kitchen ............................................................................................. — (37,544,603)Duty Free Entitlement .......................................................................................................... — (1,310,285)Provision for doubtful debts ................................................................................................. 166,9771,945,163Provision for incomplete Jaipur Project .............................................................................. — 11, 958,615Provision for diminution in value of investment/(written back) .......................................... (22,185,000)22,185,000Provision for doubtful Loans & Advances/(written back) .................................................. (319,285)25,635,231Provision for liability for refund of Jetty Deposit................................................................ 7,800,000 —
  60. 60. Provision for retirement benefits/(written back) ................................................................. 366,027(1,440,805)Interest and Dividend Income ............................................................................................ (165,552)(17,925,978)Interest ............................................................................................................................... ... 12,360,16416,584,913Amortisation of Foreign Exchange Difference.................................................................... 126,174901,328Operating profit before working capital changes: .................................................... 38,920,33643,078,995Adjustments for:Trade and other receivables............................................................................................... (4,034,252)25,072,586Inventories ............................................................................................................................ 2,318,0692,517,631Trade payable ....................................................................................................................... 2,727,531(12,719,754)Cash generated from operations: ................................................................................. 39,931,68457,949,458Direct Taxes paid (Net of refund received) ....................................................................... (9,215,598)(48,294,910)Cash Flow before Extraordinary Items: ....................................................................... 30,716,0869,654,548Extraordinary Items.............................................................................................................. — —Net cash from Operating Activities: ............................................................................. 30,716,0869,654,548B. CASH FLOW FROM INVESTMENT ACTIVITIES:Purchase of Fixed Assets (including Capital Work-in-progress): .................................... (10,617,455)(17,011,269)Increase in Loans, Advances and deposits ....................................................................... (55,944,304)(40,619,232)
  61. 61. Disposal of Investment ........................................................................................................ — 100,500Net sale consideration of Flight Kitchen Unit ..................................................................... — 197,785,026Sale of Fixed Assets ............................................................................................................ 427,443133,266Interest and Dividend Received .......................................................................................... 165,55217,942,888Net Cash (used in)/ from Investing Activities ............................................................ (65,968,764)158,331,179C. CASH FLOW FROM FINANCING ACTIVITIES:Proceeds from Borrowings:Term Loans .......................................................................................................................... 11,344,0853,593,946Unsecured Loans................................................................................................................. 51,250,0007,912,451Cash Credits ......... ................................................................................................................ 16,155,572 —Repayment of :Term Loans .......................................................................................................................... (34,214,464)(104,334,592)Cash Credit ........................................................................................................................... — (18,875,702)Unsecured Loans................................................................................................................. (2,378,256)(2,642,402)Interest Paid .................................................................................................................. ........ (12,449,920)(17,441,520)Dividend paid for earlier years including Dividend Tax ..................................................... (23,015)(29,258,614)Net Cash (used in)/from Financing Activities ............................................................ 29,684,002(161,046,433)NET INCREASE/(DECREASE) IN CASH & CASH EQUIVALENTS (A+B+C) ................... (5,568,676) 6,939,294CASH & CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR (Opening Balance) .. 14,408,888 7,469,594
  62. 62. CASH & CASH EQUIVALENTS AT THE CLOSING OF THE YEAR (Closing Balance) ... 8,840,212 14,408,888As per our report of even date Signature on the above Cash Flow StatementFor and on behalf of the BoardFOR J. G. VERMA & CO. SUNDER G. ADVANI HARESH G. ADVANIChartered Accountants Chairman & Managing Director Executive DirectorJ. G. VERMA KUMAR IYER SHANKAR KULKARNIPartner Company Secretary General Manager – Finance (CFO)Mumbai, November 4, 201029dvani Hotels & Resorts (India) LimitedSCHEDULES FORMING PART OF THE BALANCE SHEET AS AT 31ST MARCH, 2010Previous YearRupees Rupees RupeesSCHEDULE “A” : SHARE CAPITALAUTHORISED:99,750,000 Equity Shares of Rs. 2/- each ...................................... 199,500,000 199,500,0005,050,000 Preference Shares of Rs. 10/- each .............................. 50,500,000 50,500,000TOTAL 250,000,000 250,000,000ISSUED, SUBSCRIBED AND PAID UP:46,219,250 Equity Shares of Rs. 2/- each, fully paid up .................. 92,438,500 92,438,500TOTAL 92,438,500 92,438,500SCHEDULE “B” : RESERVES AND SURPLUSCAPITAL RESERVE:As per last accounts:Subsidy received under the Central Investment subsidy scheme
  63. 63. of the Government of Goa ............................................................... 2,500,000 2,500,000Share Premium Account .................................................................. 47,089,900 47,089,900Profit on re-issue of forfeited shares ............................................... 14,000 14,000Surplus being capital gain on sale of flight catering unit ............ 82,341,283 82,341,283131,945,183 131,945,183CAPITAL REDEMPTION RESERVEAs per last accounts ......................................................................... 10,000,000 10,000,000GENERAL RESERVEAs per last accounts:........................................................................ 20,000,000 6,390,000Less: Adjustment on adoption of AS-11 Notification .................... — 6,390,00020,000,000 —Add: Set aside this year ................................................................... — 20,000,00020,000,000 20,000,000SURPLUS IN PROFIT AND LOSS ACCOUNT 38,492,281 36,192,312TOTAL 200,437,464 198,137,495SCHEDULE “C” : SECURED LOANSFROM BANKS:1. Term Loan (By way of ECB) (Note 1) ....................................... 24,601,300 40,760,0002. New Foreign Currency Term Loan for renovation (Note 1) .... 23,821,562 41,776,8673. Medium Term Loans (Note 2) .................................................... 3 2014. Term Loan from Bank (Note 2) .................................................. 10,594,085 —5. Foreign Currency Term Loan ( Note 2) ..................................... 7,083,138 16,725,9126. Cash Credits (Note 3) ................................................................. 29,729,507 13,573,9357. Interest accrued and due ............................................................ 122,661 —TOTAL 95,952,256 112,836,915
  64. 64. NOTES:1. Loans under items No. (1) and (2) from Bank of Baroda are secured by (i) a mortgage executed infavour of Bank of Baroda bydeposit of title deeds of all the immovable properties of the Company situated at Village Varca, Salcette,Goa, both present an d30dvani Hotels & Resorts (India) LimitedAnnual Report 2009 - 2010future, and (ii) a first charge by way of hypothecation of all the movables (except book debts) includingmachinery, spares, to olsand accessories, present and future (subject to the charges created in favour of the Company’s Bankerson its stocks of rawmaterial, consumable stores, etc. for working capital borrowings) and (iii) personal guarantees of theManaging Director andExecutive Director. The balance in Loan Account under item No. (1) and (2) is after adjustment of foreignexchange gain of Rs.8,786,483/- (Prev. year Rs. 20,245,354/-) arose during the year.2. Loans under item No. (3) to (5) from Bank of India is secured by way of first charge on (i) immovableproperties of the Companysituated at Village Varca, Salcette, Goa, both present and future and (ii) all the movable assets of theCompany includingmachinery, spares, tools and accessories, present and future and by way of personal guarantees of theManaging Director andExecutive Director. The balance in Loan under item No. (3) is after adjustment of foreign exchange gainof Rs. 1,506,030/- (Prev.year Rs. 4,804,786/-) arose during the year.3. Cash Credits from Bank of Baroda and Bank of India under item No. (6) are secured by hypothecationof Company’s inventoriesof stocks, stores and provisions, goods in transit and other moveable items and book debts, bothpresent and future.
  65. 65. 4. Amount payable within one year Rs. 58,505,000/- (Prev. Year Rs. 43,247,000/-).Previous YearRupees RupeesSCHEDULE “D” : UNSECURED LOANSVehicle Loans .................................................................................. 7,426,548 9,729,804From erstwhile Collaborators .......................................................... 14,840 14,840Security Deposits from a Subsidiary Company ............................ 1,186,000 1,186,000Security Deposits from Shops and Others .................................... 1,575,000 1,650,000Short term loan from Delta Corps Ltd. (since repaid) .................. 51,250,000 —TOTAL 61,452,388 12,580,644SCHEDULES FORMING PART OF THE BALANCE SHEET AS AT 31ST MARCH, 2010NOTES:1. Capital Work in Progress includes:(a) Advances of Rs. Nil (Prev. Year Rs. 7,253,400/-) and Pre-Operative Expenses of Rs Nil (Prev. Year Rs.4,705,215/-) paid andincurred on proposed Jaipur Hotel Project, which is considered doubtful. These amounts are net ofProvision of Rs. Nil (Prev. Y earRs. 11,98,615/-) made for such doubtful project. (Refer Schedule J-1) .(b) Pre-Operative Expenses include : Payment of Legal and Consultants Fees- Rs. Nil (Prev. Year Rs.1,667,135/-); Travelling andConveyance of Rs. Nil (Prev. Year 986,271) and Security and other Expenses of Rs. Nil (Prev. Year2,051,809/-).(c) Expenses and advances of Rs. 363,682/- (Prev. year Rs. 1,785,840/-) incurred onrenovation/refurbishing of the hotel, pendin gcompletion of the work, (pending allocation).2. Additions to Fixed Assets include Rs. NIL (Prev. Year Rs.7,265,307/-) being loss due to fluctuation inforeign currency rates capitalisedin accordance with AS-11 Notification.
  66. 66. 3. Deductions from Fixed Assets include foreign exchange gain of Rs 8,786,483/- (Previous year Rs Nil)due to fluctuation of for eign currencyrates in accordance with AS-11 Notification.4. Includes Rs. 23,757/- (Previous Years Rs. Nil) relating to earlier years.SCHEDULE “E” : FIXED ASSETS (Amount in Rupees)1 Land (Free hold) 23,626,546 — — 23,626,546 ————23,626,546 23,626,546(Includinglandscaping)2 Buildings 379,974,250 322,285 4,638,755 375,657,780 98,529,912 9,455,412 (24,575) 108,009,899267,647,881 281,444,3383 Plant and Machinery 126,336,532 10,164,765 8,590,875 127.910,422 52,195,397 6,773,807 4,481,98654,487,218 73,423,204 74,141,1354 Furniture, Fixtures 118,468,743 1,530,564 1,655,612 118,343,695 69,931,559 6,544,625 251,84176,224,343 42,119,352 48,537,184and Office Equipment5 Vehicles and Motor 19,036,589 22,000 449,852 18,608,737 3,734,675 1,803,968 257,908 5,280,73513,328,002 15,301,914Boats (Ref. Note 4)6. Intangible Asset- 2,332,937 — 351,113 1,981,824 758,345 320,468 218,470 860,343 1,121,4811,574,592Computer SoftwareTOTAL 669,775,597 12,039,614 15,686,207 666,129,004 225,149,888 24,898,280 5,185,630 244,862,538421,266,466 444,625,709Previous Year Total 758,148,517 40,420,409 128,793,329 669,775,597 262,954,011 25,086,08862,890,211 225,149,888 444,625,7097 Capital Work in Progress [See Note (1) below] 363,682 1,785,841GROSS BLOCK (AT COST) DEPRECIATION NET BLOCKAs at Additions Deductions As at Upto For the Less: Sales/ As at As at As at1.4.2009 (Note 2) (Note 3) 31.3.2010 31.3.2009 year (Adjustments) 31.3.2010 31.3.2010 31.3.2009
  67. 67. 31dvani Hotels & Resorts (India) LimitedSCHEDULES FORMING PART OF THE BALANCE SHEET AS AT 31ST MARCH, 2010Previous YearRupees Rupees RupeesSCHEDULE  

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