ADVANI HOTELS & RESORTS (INDIA) LTD....Resorts (India) Limited will be held at ‘Rangaswar’, 4th...
Transcript of ADVANI HOTELS & RESORTS (INDIA) LTD....Resorts (India) Limited will be held at ‘Rangaswar’, 4th...
ANNUAL REPORT2008 - 2009
ADVANI HOTELS & RESORTS (INDIA) LTD.
Dear Shareholder,
Economic Scenario
The world economy has witnessed one of the largest setbacks since the Great Depression of the 1930’s. The Indian economy was relatively insulated, though the growth rate dropped to 6.7%. GDP growth would have been higher, but for the unfortunate terrorist attacks in Mumbai and other parts of India.
At the time of my Chairman’s speech last year one major concern was the price of oil, which was about $115 a barrel. As a result of the global meltdown, the price of oil has reduced significantly to under U.S.$.73 a barrel. This will ease the burden on India’s economy, which relies on imported oil.
Foreign direct investment has slowed down, the stock market and real estate prices have dropped substantially. The value of Indian Rupee which had strengthened to Rs.41 has now depreciated to almost Rs.49 to a U.S.$, despite the serious problems faced by the U.S. economy. With the reduction in exports and a drop in inward remittances, the trade deficit has increased. Fortunately, we have a stable Government in place and with the conservative policies followed, India will continue to be one of the fastest growing economies in the world with growth rates comparable to China.
The Tourism Industry
This industry has the potential for earning huge foreign exchange and reducing the trade deficit. Unfortunately, only 5 million foreign tourists came to India, as compared to the larger number of we Indians who travel overseas, as airfares within India have always been relatively high. Thankfully, with the attractive airfares of low cost carriers we Indians are preferring to travel within India. This will have a positive impact on the fortunes of leisure destinations such as Goa. The number of foreign tourists visiting Goa declined substantially as the terrorist attacks on Mumbai happened in November 2008, at the height of the tourist season.
The Government of India has taken steps to revive foreign tourism but basic infrastructure needs to be improved.
Casino Industry
The Government of Goa has issued full fledged casino licenses for 5 other ships ending the 8 year monopoly enjoyed by your Company. With the increased capacity coupled with a drop in disposable income due to the slow down, the fortunes of your Company’s subsidiary have been adversely affected.
Your Company’s Past and Future
The vision for your Company has always been to be the first to bring new ideas to Goa and execute them in a way that everyone would be proud of. We were the first to engage Hawaiian architects to create an international resort that is not only an architectural masterpiece, but which blends in completely with the Goan environment.
Those who are concerned about Goa should be proud that someone from outside Goa believed in the tourism potential of Goa long before it became a hot destination. We also succeeded in getting equity investment from an international
hotel chain under a franchise arrangement and went on to be rated, in the late 90’s, as the best hotel in Goa.
To promote tourism to Goa in the off-season months, we convinced the Government of Goa to allow the first Slot machine casino in our 5 Star Hotel to attract group movement. Later on, the Company was able to establish India’s first offshore casino
almost ten years ago.
Unfortunately, due to the world economic conditions and our dependence on charter tourism we have had to adopt a cautious approach and scale back what had been planned for this off-season’s renovation.
Our future vision involves expanding the 9 hole golf course into a full fledged one; building a jetty on the beach in front of the resort to create a synergy between the newly acquired Casino Ship and the hotel and thus have Goa’s only full fledged land based casino.
We have purchased additional land to be able to build a larger conference centre or 50 additional rooms. A roof top Yoga centre with a panoramic view of the ocean is also planned for the next season.
Your Company’s Performance
The total income of Ramada Caravela Beach Resort, Goa combined with two months of operational income of the airline catering unit (which was sold before the airline industry ran into problems) declined 29% to Rs.3367 lakhs. The income of the hotel itself declined by only 15%. This is probably one of the best performances of any hotel in a disastrous year for our industry.
The operating profit for the year is substantially lower at Rs.587 lakhs, but part of this reduction is due to the non-existence and related profits from the airline catering unit. In addition, the profits for the previous year would need to be adjusted downwards by Rs. 150 lakhs to adjust for the change in treatment of foreign exchange gains to make the figures comparable.
The Company’s Casino subsidiary has made a loss of Rs.79 lakhs and operations have been temporarily suspended. As the managing partners in this venture have decided to exit the business, your Company has decided to make a provision of Rs.478 lakhs in case we are not able to find an alternate solution. These factors have led to a net loss of Rs.52 lakhs for the year.
Your Company has done exceedingly well in the first quarter. An independent study undertaken by the “Capital Market” magazine dated 10th August, 2009 ranked your Company first out of 57 Companies in the Hotel Industry.
We hope to do well for the entire year, unless there are major cancellations due to the hype on Swine Flu.
I thank you for all your continued faith in the Company.
Sunder G. AdvaniChairman and Managing Director
Chairman’s StatementChairman’s Statement
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Page
Notice ...................................................................................................................... 3
Directors’ Report ..................................................................................................... 6
Management Discussion and Analysis ................................................................... 11
Corporate Governance Report ............................................................................... 16
Auditors’ Certificate on Corporate Governance ...................................................... 23
Auditors’ Report ....................................................................................................... 24
Balance Sheet ......................................................................................................... 28
Profit and Loss Account .......................................................................................... 29
Cash Flow Statement .............................................................................................. 30
Schedules to Balance Sheet ................................................................................... 31
Schedules to Profit and Loss Account ................................................................... 35
Significant Accounting Policies and Notes on Accounts ........................................ 37
Statement under section 212 of the Companies Act ............................................. 48
Auditors’ Report on Consolidated Financial Statement .......................................... 49
Consolidated Balance Sheet ................................................................................... 50
Consolidated Profit and Loss Account.................................................................... 51
Consolidated Cash Flow Statement ....................................................................... 52
Schedules to Consolidated Balance Sheet ............................................................ 53
Schedules to Consolidated Profit and Loss Account ............................................. 57
Significant Accounting Policies and Notes on Consolidated Accounts .................. 59
CONTENTS
dvani Hotels & Resorts (India) LimitedAnnual Report 2008 - 2009
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BOARD OF DIRECTORS Mr. Sunder G. Advani Chairman & Managing Director
Mr. K. Kannan
Mr. Prakash V. Mehta
Mr. Anil Harish
Mr. Haresh G. Advani Executive Director
Mrs. Menaka S. Advani
GENERAL MANAGER – FINANCE (CFO) Mr. Shankar G. Kulkarni
COMPANY SECRETARY Mr. Kumar Iyer
AUDITORS Messrs J. G. Verma & Co. Chartered Accountants
SOLICITORS Messrs Talwar Thakore & Associates Messrs Malvi Ranchoddas & Co.
BANKERS Bank of Baroda Bank of India
REGISTERED OFFICE 1009/1010, Dalamal Tower 211, Nariman Point Mumbai – 400 021
REGISTRAR AND Datamatics Financial Services Limited SHARE TRANSFER AGENTS Plot No. A/16 & 17 Part B Cross Lane, MIDC Marol Andheri (East), Mumbai – 400 093
FOREIGN COLLABORATORS Wyndham Hotels, U.S.A. (Previously Ramada International, Inc., U.S.A.)
LOCATION OF THE RESORT Ramada Caravela Beach Resort Varca Beach, Varca Village Salcette, Goa – 403 721
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NOTICE
Notice is hereby given that the Twenty Second Annual General Meeting of the Members of Advani Hotels & Resorts (India) Limited will be held at ‘Rangaswar’, 4th Floor, Chavan Centre, General Jagannath Bhosale Marg, Nariman Point, Mumbai – 400021 on Friday, 25th September, 2009 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, 2009, Profit and Loss account for the year ended on that date together with Reports of the Directors and Auditors thereon.
2. To appoint a Director in place of Mr. Anil Harish, who retires by rotation and is eligible for re-appointment.
3. To appoint a Director in place of Mrs. Menaka S. Advani, 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 the Company from the conclusion of this Annual General Meeting until the conclusion of the next Annual General Meeting and to authorise the Board to fix their remuneration.
By Order of the Board of DirectorsFor Advani Hotels & Resorts (India) Limited
Place : Mumbai Kumar IyerDate : August 13, 2009 Company Secretary
Registered Offi ce:1009/1010, Dalamal Tower,211, Nariman Point, Mumbai – 400021
NOTES:
1. A MEMBER ENTITLED TO ATTEND AND VOTE IS ENTITLED TO APPOINT A PROXY TO ATTEND AND VOTE ON A 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 Company not later than 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 Saturday, 19th September to Friday, 25th September 2009 (both days inclusive) for the purpose of the Annual General Meeting of the Company.
3. Pursuant to Section 205A (5) of the Companies Act, 1956 all unclaimed dividends up to the financial year ended 31st March 2000 have been transferred to the Investor Education and Protection Fund (IEPF) of the Central Government. The details of the due dates for transfer of unpaid/ unclaimed dividend to the
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IEPF for the subsequent years are as under:
Year of Declaration Due Date (For transfer to the Fund)
2005 – 2006 25-04-2013
2006 – 2007 21-03-2014
2007 – 2008 (Interim) 17-05-2015
2007 – 2008 (Final) 13-09-2015
4. Members who have not claimed dividend in respect of the financial year 2005 – 2006 and for the subsequent years are requested to approach the Company / the Registrar and Share Transfer Agents of the Company for claiming the same.
5. The particulars of the Directors seeking re–appointment are furnished below as per the provisions of Clause 49 of the Listing Agreement
Name of Director (1) Mr. Anil Harish (2) Mrs. Menaka S. Advani
Date of appointment
23.02.1998 30.09.1989
Age 55 years 63 years
Qualification B.A. LL.B. LL.M. (USA) M.A. (Economics)Innkeepers DiplomaHoliday Inn University (USA)
Expertise Taxation Law Administration & Human Resource Development
List of otherDirectorships #
1. Hotel Leelaventure Ltd.2. Pantaloon Retail (India) Ltd.3. Unitech Ltd.4. Hinduja Ventures Ltd.5. Mahindra Lifespace Developers Ltd.6. Ador Welding Ltd.7. Valecha Engineering Ltd.8. Mukta Arts Ltd.9. Galaxy Entertainment Corp. Ltd.10. Mantri Chandak Constructions Ltd.11. Hinduja Global Solutions Ltd.12. K.C. Maritime (India) Ltd.13. Pride Hotels Ltd.14. Future Ventures India Ltd.
None
List ofChairmanship/MembershipOf other Committees $
Chairman of Audit Committees:1. Hinduja Ventures Ltd.2. Hinduja Global Solutions Ltd.3. Ador Welding Ltd.
Member of Audit Committees:1. Hotel Leelaventure Ltd.2. Mukta Arts Ltd.3. Unitech Ltd.4. Valecha Engineering Ltd.5. Mahindra Lifespace Developers Ltd.
Chairman of Investors’ Grievance Committee:1. Hinduja Global Solutions Ltd.
# Excludes Directorships in Private Limited Companies, Unlimited Companies, Foreign Companies, Section 25 Companies and alternate Directorships.
$ Includes only membership/s of Audit Committee and Shareholders/Investors Grievance Committee of other Public Limited Companies.
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6. The Registrar and Share Transfer Agents of the Company are: Datamatics Financial Services Limited, Plot No. A–16 & 17, Part B Cross Lane, MIDC Marol, Andheri (East), Mumbai – 400093.
Tel.: 91–22–66712237 Fax: 91–22–66712230
Members are requested to contact them for any matter relating to Bank details, ECS Mandates, nominations, power of attorney, change in name / address etc.
7. Members are requested to quote their Folio Number or the DP & Client ID on all the correspondence with the Company or with the Share Transfer Agents.
8. In view of the numerous advantages offered by the Depository System, members holding Shares in physical form are 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 to the Company at its 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 General Meeting.
By Order of the Board of DirectorsFor Advani Hotels & Resorts (India) Limited
Place : Mumbai Kumar IyerDate : August 13, 2009 Company Secretary
Registered Offi ce:1009/1010, Dalamal Tower,
211, Nariman Point, Mumbai – 400021
dvani Hotels & Resorts (India) LimitedAnnual Report 2008 - 2009
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DIRECTORS’ REPORT
Dear Members,
Your Directors are pleased to present the Twenty Second Annual Report and the Audited Statement of Accounts of your Company for the year ended 31st March, 2009.
(Rs. in lakhs)
Financial Results: Year EndedMarch 31, 2009
Year EndedMarch 31, 2008
Total Income ................................................................................... 3367.16 4754.48
Profi t before interest, depreciation, tax and exceptional items 587.22 1574.15
Less: Interest ................................................................................... 165.85 279.78
Profi t before depreciation, tax and exceptional items ............. 421.37 1294.37
Less: Depreciation .......................................................................... 250.86 260.65
Profi t / (Loss) before tax and exceptional items ....................... 170.51 1033.72
Less: Exceptional items (net) .......................................................... 222.34 —
Profi t / (Loss) before tax .............................................................. (51.83) 1033.72
Less: Provision for Taxation
Current tax ..................................................................................... 77.00 325.00
Deferred tax liability / (assets) ....................................................... (145.56) 52.99
Fringe Benefit tax .......................................................................... 11.58 11.00
Profi t after tax ............................................................................... 5.15 644.73
Less: Prior period adjustments ....................................................... — 6.66
Add: Profit brought forward from previous year ............................. 643.68 365.68
Less: Adjustment on adoption of AS–11 Notification ..................... 86.91 —
Profi t available for appropriation ................................................ 561.92 1003.75
Less: Dividend and tax thereon ...................................................... — 296.17
Less: Transfer to General Reserve ................................................. 200.00 63.90
Balance Profit carried to Balance Sheet ........................................ 361.92 643.68
Basic and Diluted Earnings per share ............................................ 0.01 1.38
Financial Performance:
The year 2008–09 was a difficult year for the world economy and for India. The Travel and Tourism industry was adversely affected by these developments. For the first time in six years, there was a decline in the number of foreign tourists visiting India. Both foreign and domestic tourists curtailed their travel plans due to the terrorist attacks, especially in Mumbai in November 2008 at the beginning of the tourist season for Goa. As there were rumours that terrorists would attack Goa during the Christmas holidays, the business during the high peak season also suffered. Considering the above facts, the performance of your Company is satisfactory, as there were many cancellations at your Company’s resort for the entire November to March tourist season.
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The operational income for the year 2008–09 of the Ramada Caravela Beach Resort, Goa, combined with two months operational income of the Airport Plaza catering unit, declined from Rs.4754 lakhs to Rs.3367 lakhs or 29.2%. The hotel alone did quite well as the income declined by only 15.7% from Rs.3820 lakhs to Rs.3220 lakhs.
The total operating profit for the financial year is Rs.587 lakhs as compared to Rs.1574 lakhs in the previous year. These figures are not comparable because the airline catering revenues have been included for only two months in this financial year, as this unit was sold in June and also due to a change in the accounting treatment for notional foreign exchange gain / loss as per Government notification dated 31st March, 2009. The total income for the previous financial year included an amount of Rs.150 lakhs as notional gain in foreign exchange. In this financial year, the Company has opted to include the notional foreign exchange gain / loss as additions to the assets for which the foreign exchange loan was taken. As such, the comparable operational profit figures for the previous financial year should be reduced by Rs. 150 lakhs.
The profit before exceptional items of Rs.171 lakhs for this financial year is also not strictly comparable with the previous years figure of Rs.1034 lakhs for the above reasons. There was a drop in average occupancy from 70% to 53%. However, the average room rate has increased from Rs.4,464 to Rs.4,979 as there were more domestic tourists during the season.
The sale of the Flight Catering Unit resulted in a revenue profit of Rs.375 lakhs in addition to a capital profit of Rs.959 lakhs. From the sale proceeds the Company pre–paid part of its secured loans and brought interest costs down from Rs.280 lakhs to Rs. 166 lakhs.
The Government of Rajasthan has, under the provisions of the Land Acquisition Act, 1894, dispossessed us and taken possession of the property in Amer, Jaipur. The Company has filed an appeal against the same in the Rajasthan High Court. Accordingly, the Company has made a provision of Rs. 120 lakhs, being the total amount incurred on the Jaipur property, which form part of the exceptional items of expenses in the profit and loss account.
The Company’s subsidiary Advani Pleasure Cruise Company Private Limited (APCCPL) has incurred operational losses during the year ended 31st March 2009 and for the quarter ended 30th June 2009. This has been partly due to the economic slowdown and partly due to the almost ten–fold increase in the capacities of the offshore casinos in Goa. APCCPL has therefore temporarily suspended its operations w.e.f. 12th June 2009. The Company has in view of this uncertainty made a provision of Rs. 222 lakhs for diminution in the value of investment in the subsidiary and Rs. 256 lakhs towards doubtful loans and advances made to the subsidiary company, which form part of the exceptional items of expenses in the profit and loss account.
After considering these exceptional items, the net loss of Company is Rs. 52 lakhs.
Dividend:
Taking into account the above results, your Directors do not recommend any dividend for the financial year 2008–09.
Future Outlook:
The flow of tourists from foreign countries may continue to be adversely affected due to the poor performance of the economies of the countries from which Goa receives its major portion of business. The only saving grace is that business to Goa from other parts of India is starting to increase, but at reduced rates.
However, your Company has begun the current year on a very optimistic note by registering an increase of 8.5% in the net sales (Rs. 648.30 lakhs) for the first quarter ended June 2009 as compared to the previous corresponding quarter (Rs. 597.30 lakhs) resulting in a net profit before tax of Rs. 62.72 lakhs as compared to a loss of Rs. 29.40 lakhs for the previous corresponding quarter.
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Your Company expects to continue to do well during the year 2009–10 with an expected recovery in the Indian and global economy in the coming years.
Renovation:
In view of the global meltdown, foreign tourists are reluctant to pay higher room rates and are asking for reduction in current rates. As such, the Company has decided not to go in for any major renovation in this year. The Company has however refurbished 3 adjoining villas and converted them into two Presidential villas.
Subsidiary Company:
The business of your Company’s 51% subsidiary Advani Pleasure Cruise Company Private Limited (APCCPL), which operated the only full fledged casino ship in Goa under a management contract with Casinos Austria International (CAI), who own the balance 49% in APCCPL, was affected during the year due to the advent of competition as a result of the Government of Goa issuing five other casino licenses in the same river. The business of APCCPL, which was highly profitable, has now made a net loss of Rs. 79 lakhs during the year 2008–09 as compared to a net profit of Rs. 678 lakhs during the previous year. CAI have accordingly decided to suspend operations of APCCPL from 12th June 2009 and also expressed their desire to exit from APCCPL. Your Company is trying to find a suitable solution to this problem caused by the sudden increase in capacity at a time when tourists are short of disposable funds. Your Company is also exploring the option of disposal of its investment in APCCPL.
The other subsidiary company Advani Flight Catering Services Private Limited, has not yet commenced operations.
The Ministry of Corporate Affairs, New Delhi has vide its order no. 47/205/2009–CL–III dated 16th March 2009 has exempted the Company from the requirement of attaching the Financial statements of its subsidiaries in terms of Section 212(1) of the Companies Act, 1956. As per the order a gist of the financial statements of the subsidiary Companies has been prepared and forms part of the annual report. The accounts of the subsidiary Companies and 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 followed and that there are no material departures;
(ii) Appropriate accounting policies have been selected and applied consistently and judgments and estimates made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company 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 in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing fraud and other irregularities.
(iv) The annual accounts have been prepared on a going concern basis.
Directors:
Mr. Anil Harish and Mrs. Menaka S. Advani, Directors of the Company, retire by rotation at the ensuing Annual General Meeting and being eligible have offered themselves for re-appointment.
Corporate Governance:
The Company has complied with the requirements regarding the Corporate Governance as required under Clause 49 of the Listing Agreement.
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Mr. K. Kannan, who was appointed as an Independent Director on the Board of the Company’s subsidiary Advani Pleasure Cruise Company Private Limited (APCCPL) in terms of clause 49 III (i) of the Listing agreement with the Stock Exchange/s has resigned from APCCPL w.e.f. 12th June, 2009. The Company is in the process of finding a suitable replacement.
The report on Management Discussion and Analysis, Corporate Governance as well as the Auditors’ Certificate on the compliance of Corporate Governance, form part of the Annual Report.
Additional Information:
a. Conservation of Energy
Energy conservation continues to receive utmost priority and the Company monitors energy costs and reviews the consumption of energy on a regular basis. The Company wherever necessary also initiates appropriate measures to reduce consumption of electricity.
b. Technology Absorption
The relevant particulars relating to technology absorption in terms of Rule 2 of the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 is not applicable as the hotel forms a part of the service industry and as such the Company does not have any significant manufacturing operations.
c. Foreign Exchange Earnings and Outgo
The Company’s foreign exchange earnings were Rs.154,289,333/- (previous year Rs.325,519,950/-) whereas the outgo was Rs.58,404,481/- (previous year Rs.92,673,814/-). The relevant details are given in the notes to Accounts.
Auditors:
M/s. J. G. Verma & Co., Chartered Accountants, Mumbai, Auditors of the Company retire at the conclusion of 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 (Particulars of Employees) Rules, 1975 is given in the annexure.
The Board desires to place on record its appreciation to all employees of the Company, for the sincere and dedicated services rendered and look forward to their continued support in future as well.
Acknowledgment:
Your Directors thank the Company’s bankers, investors, collaborators and clientele for their continued support during the year.
For and on behalf of the Board of Directors
Place: Mumbai SUNDER G. ADVANI Date: August 13, 2009 Chairman & Managing Director
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ANNEXURE TO THE DIRECTORS’ REPORT
The information required under Section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 and forming part of the Directors’ Report for the year ended 31st March, 2009, is as follows:
Employees Name
Designation Age in years
Qualification Experience in years
Date of Commence-ment
Remuneration Rupees
Last employment held
Mr. Sunder G. Advani
Chairman & Managing Director
70 Strategic Hospitality Management Financial Management CourseCornell University (USA)
Masters in Business Administration from The Wharton School (USA)
B.S. – Business AdministrationTemple University (USA)
Innkeepers DiplomaHoliday Inn University (USA)
48 01.03.88 5,245,754 Chairman & Managing Director,Hotel Airport Plaza, Mumbai
Mr. Haresh G. Advani
Executive Director
59 B.S. Cornell University (USA) School of Hotel Administration
40 01.03.88 3,307,984 Director, Hotel Airport Plaza, Mumbai
* Mr. Joao Aguiar
Director Operations – Airport Plaza
57 Hotel & Catering Management Studies in Hotel & Catering Management School, Estori, Lisbon, Portugal
17 15.02.05 578,757 Production Manager, Supervisor Foods (Southall), London
*Mr. Sanjay Saxena
Vice President – Sales & Marketing
43 M Com. Post Graduate in Marketing Management
20 15.11.08 977,161 Managing Director, MCI Management (India) Pvt. Ltd.
Notes:
1. *Employed for part of the year.
2. ‘Remuneration’ includes salary, commission, allowances and taxable value of perquisites.
3. The above appointments are contractual.
4. Mr. Sunder G. Advani, Mr. Haresh G. Advani and Mrs. Menaka S. Advani are related to each other.
5. Mr. Sunder G. Advani holds 9,376,393 equity shares (20.28%) and Mr. Haresh G. Advani holds 5,708,936 equity shares (12.32%).
For and on behalf of the Board of Directors
Place: Mumbai SUNDER G. ADVANIDate: August 13, 2009 Chairman & Managing Director
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MANAGEMENT DISCUSSION AND ANALYSIS REPORT
1. OVERVIEW OF INDIAN ECONOMY
The Indian economy is among the four emerging markets along with China, Brazil and Russia and is predicted to have one of the fastest growth rates in the world. GDP grew by 6.7% in 2008–09 which was lower than the previous year but still substantially higher than the growth achieved by the economies of the developed world. The Indian economy is projected to grow by 7.1% in 2009–10. Services account for about 58% of India’s GDP.
The world economies are not recovering as quickly as hoped and India’s exports are affected by the poor performance of the countries from which India receives its demand for goods and services.
2. INDIAN HOSPITALITY INDUSTRY
The demand for services for the hospitality industry is created by clients both from out of India and within India. The major portion of the demand for upmarket hotels has always been derived from businessmen traveling to India or from Indians traveling on business within India. Leisure traffic has always been a small component of total demand except for hotels in tourist centres such as Goa, Agra, Andamans etc., Over 5 million foreign visitors came to India last year, but the number has declined for the first time in many years. USA, UK and other European countries provide the bulk of the visitors to India. After the November’08 terrorist attacks many of these countries have issued travel warnings to their citizens to be vigilant if they plan to visit India. These terrorist attacks coupled with a slowdown in most economies worldwide have had a disastrous impact on the fortunes of the Indian hospitality industry. The timing could not have been worse as many visitors come to India in the winter months. Many of the hotel Companies had embarked on major expansion programs which have added more hotel rooms in the major metros as well as Class I cities of India. With the reduced clientele and a larger inventory of rooms, occupancy and room rates in most cities have declined substantially. The increased competition coupled with a decline in the willingness of bankers to finance hotel projects has led to the curtailment of expansion plans by many promoters. The stock market is also not receptive to hotel issues after the November terrorist attacks in Mumbai.
There is hope that the Indian economy will start to grow at a faster pace which will lead to greater demand for hotel rooms and related services. Though foreign visitors may not pick up in the near future, the increased availability of funds with the local population will lead to a significant growth in domestic tourism. This year, Indians were hesitant to travel overseas as they were afraid of catching Swine flu. They stayed within India especially when the Indian rupee started to turn weak which made foreign holidays too expensive. Both foreign and domestic clients are now trying to move to more affordable accommodations so that they can still afford a holiday. There is now a fear that, with the media over-reacting on the incidence of Swine flu in India, both foreign tourists and local tourists may prefer to stay at home. This will cause a huge damage to the hotel and the troubled airline industry. If airlines within India start increasing fares to cope with mounting losses, there will be a reduction in passengers and a consequent adverse impact on leisure travel. Low cost carriers have helped to keep fares reasonable and are increasing their market share. Due to the huge domestic population, there is a great advantage for hotels in the right cities that were built at reasonable costs. The long term prospects for the industry are bright.
The tourism industry is now being recognised as an important independent industry and concessions / incentives are being given for its growth.
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3. GOA’S TOURISM POTENTIAL
Your Company’s business is located in Goa and it was selected because it has several basic advantages, especially for stand–alone hotels, which are not available in any other part of India. The foreign tourists make repeated visits to Goa not only because of the availability of long stretches of beautiful beaches, but also because of Goa’s accessibility by direct charter flights from most of Europe. The friendliness of the people from Goa is another major factor which has led to Goa’s spectacular success in tourism. The scenic beauty, the lack of pollution, pleasant climate and low density of population are other factors that have contributed to an inflow of about 300,000 foreign tourists to Goa annually. They stay for an average of 10 days and come to Goa during the peak winter months when hotel rates are the highest. These British / Russians have provided the backbone for most leisure hotels. Since these visits are made to avoid cold European winters, these should continue unless economic conditions in these countries deteriorate or other alternates offering better value for money become available.
Domestic tourism to Goa has also grown recently largely due to the availability of cheap and frequent flights to Goa from other parts of India. The friendly people, the party like atmosphere, the pollution free environment, fewer crowded places ensure repeat clients to Goa. Families, singles, honeymooners, leisure groups, are attracted to Goa for what it offers. This market will continue to grow rapidly year round since there are very few other places in India which can offer this exotic combination. This will make Goa less reliant on the seasonality factor and the fortunes of foreign economies.
The other major market for Goa is from meetings, incentives, conferences and exhibitions popularly known as MICE. Goa has attracted much business from this market, but there is a huge untapped potential which could be realized if there was a proper convention center with enough hotel rooms nearby. Availability of full 18–hole golf courses nearby would be an added plus. Long distances and narrow roads are part of Goan life. The Government is trying to make investments in infrastructure, but without a well researched professionally prepared “Tourism Master Plan”, the investment decisions will not yield full results. Goa has more to offer than other successful destinations such as Bali, Phuket, Mauritius etc.
4. UNIQUE ADVANTAGES OF YOUR COMPANY
Your Company owns a 202–room 5–star deluxe hotel in Goa sandwiched between the smaller 140–room Taj Exotica and the recently expanded 187–room Leela property located on the same beautiful beach. Due to its well planned integrated architectural design conceptualized by leading Hawaiian architects, it is more convenient for handling large conferences / meetings / weddings etc. The 23–metre high Atrium lobby resembling a Goan cathedral is an impressive focal meeting point. This height is not permitted with the new building rules. All the facilities are connected making the resort “monsoon proof”, which is a big advantage as most groups / conferences come to Goa during the monsoon months of June to September. Most of the rooms have an ocean–view with large private balconies.
The 1000 feet beach frontage with a 9–hole golf course straggling the beach are important assets for a destination resort. Two luxurious modern Presidential villas have been created this season after the complete restructuring of 3 older villas to attract those who want the ultimate in luxury.
The hotel has been built in 1990 at a reasonable cost and can compete effectively with any new property, though very few new hotel projects have come up or are expected shortly. Goa has in–built barriers to entry as the Regional Plan has been scrapped and finalization of the new plan is being delayed. The name “Ramada” is well known throughout the world and also in Mumbai, Delhi and other Indian cities.
dvani Hotels & Resorts (India) Limited
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5. OPPORTUNITIES
• Your Company can add more rooms in the newly purchased adjoining vacant plot if demand increases.
• Your Company can alternatively build a full–fledged Conference Centre with additional parking on this newly acquired land.
• Your Company has a long standing reputation of being one of the best hotels in Goa.
• The starting of direct flights to Goa from Dubai and Middle East will help as the Ramada brand is very strong in the Middle East.
• It has been announced that Dabolim Airport will continue to be Goa’s international airport with substantially improved facilities.
• The occupancy of our resort during the off–season months of May, June and July have gone up phenomenally, which will reflect in the next year’s performance.
• Efforts are being made to improve the resort’s Goa Nugget casino by increasing the casino area with additional facilities.
• The resort’s spa has been refurbished with more sophisticated equipment to attract airline crew and younger high spending adults.
• The back of the house equipment is being replaced to achieve cost cutting.
6. THREATS AND RISKS
• The casino subsidiary has suspended operations and the Company may not find a suitable investor to fund the offshore casino and restart the business.
• The climatic changes in the weather pattern may make Europe not as cold during winter months.
• There is always a risk of a terrorist attack, which may affect flow of visitors.
• Goa continues to be the only area of the Company’s business. Any adverse publicity regarding Goa can affect the Company’s fortunes.
• Outbreak of any epidemic or disease will definitely lead to a decline in the business.
• Prices of Aviation Turbine Fuel may go up substantially making air travel too expensive.
• Your Company may be impacted by fluctuations in the value of the Indian Rupee against other foreign currencies. To mitigate this risk, the Company has decided to quote all its rates in Indian Rupees.
In order to mitigate the impact of some of these risks, the Company is placing more emphasis on attracting domestic clients. Sales offices within India are being strengthened so as to reduce the dependence on foreign visitors who may be concerned about terrorism, disease, local agitations etc.
7. SEGMENT WISE PERFORMANCE
Your Company’s business comprises of one segment only i.e. hospitality.
8. FINANCIAL RESULTS / OPERATIONAL PERFORMANCE
The financial results of your Company, on a standalone basis and on a consolidated basis are contained in the Annual Report. The analysis of the Financial results is discussed below:
dvani Hotels & Resorts (India) LimitedAnnual Report 2008 - 2009
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Operating Results for the year ended 31st March 2009
Standalone Financial ResultsRs. in lakhs
ParticularsYear ended
March 31, 2009Year ended
March 31, 2008Sales and Other Income from Operations 3059.38 4315.64Other Income 309.78 438.84Total Income 3367.16 4754.48Expenditure Consumption of raw materials 261.58 512.36 Staff Cost 717.68 870.01 Power & Fuel 305.17 350.60 Other expenditure 1495.51 1447.36Total Expenditure 2779.94 3180.33Profi t before Interest, Depreciation and Tax 587.22 1574.15Interest 165.85 279.78Depreciation 250.86 260.65Profi t from ordinary activities before tax and exceptional items 170.51 1033.72Less: Exceptional items/ prior period items 222.34 6.66Profi t / (Loss) before taxation (51.83) 1027.06Tax expense (56.98) 388.99Net Profi t 5.15 638.07
PROFIT AND LOSS ACCOUNT(1) Revenues
The total revenues of the Company including the flight catering unit for two months on a standalone basis decreased by 29.18% from Rs.4,754.48 lakhs in F.Y. 2007–08 to Rs.3,367.16 lakhs for the F.Y. 2008–09.
The hotel’s room revenues decreased from Rs.2,201.42 lakhs to Rs.1909.79 lakhs due to a drop in clients after the November 2008 terrorist attacks. The average occupancy was 53%.
(2) Operating Expenditures
The total operating expenditure decreased by 12.59% from Rs.3,180.33 lakhs to Rs.2,779.95 lakhs. The consumption of raw materials decreased by 49% since the flight kitchen was operational for only 2 months during the year and sold thereafter. The Staff Costs also have come down by 17.51% from Rs.870.01 lakhs in F.Y. 2007–08 to Rs.717.68 lakhs in F.Y. 2008-09.
(3) Earning before Interest, Depreciation and Tax
The EBITDA decreased 62.70% from Rs.1,574.15 lakhs to Rs.587.21 lakhs.
(4) Interest and Depreciation
Whereas the interest costs declined by 40.72% to Rs.165.85 lakhs from Rs.279.78 lakhs, depreciation decreased by 3.76% to Rs.250.86 lakhs from Rs.260.65 lakhs.
(5) Profi t from Ordinary Activities before Tax and exceptional items
The profit before tax and exceptional items decreased 83.50% from Rs.1033.06 lakhs to Rs.170.50 lakhs.
dvani Hotels & Resorts (India) Limited
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(6) Exceptional items Out of the sale of the Flight Catering Unit the Company made a revenue profit of Rs.375.45 lakhs. However,
certain other provisions have been made as a matter of abundant caution in respect of the Company’s Jaipur Project (Rs.119.59 lakhs) and the investments (Rs.221.85 lakhs) and doubtful loans / advances (Rs.256.35 lakhs) made to the Company’s Casino Subsidiary. The net effect of these is a negative of Rs.222.34 lakhs.
(7) Profi t / Loss before Tax The loss before tax during the year is Rs.51.83 lakhs as against a profit before tax of Rs.1027.06 lakhs
during the previous year.
BALANCE SHEET
(1) Secured Loans The total loans availed by the Company declined from Rs.2,074.03 lakhs in F.Y. 2007–08 lakhs to
Rs.1,128.37 lakhs in F.Y. 2008–09. This decline is due to prepayment of certain Rupee Term Loans out of sale proceeds of flight catering unit.
(2) Unsecured Loans Unsecured loans increased from Rs.73.11 lakhs to Rs.125.81 lakhs.
(3) Fixed Assets The gross fixed assets decreased from Rs.7,581.49 lakhs to Rs.6,697.76 lakhs due to sale of the flight
catering unit during the year.
7. INTERNAL CONTROL SYSTEM AND ADEQUACY: • The internal control systems set up in terms of financial reporting, efficiency of operations and
compliance with various rules, regulations, etc. are adequate and effective. In order to further the control process, each department is asked by the Management to justify variances and discrepancies pointed out by the Internal Auditors.
• The review of the adequacy of the internal control procedures and their implementation is closely monitored by the Audit Committee of the Board of Directors.
8. HUMAN RESOURCES: • The Company has streamlined its recruitment and selection policies while giving emphasis on retaining
the trained staff. Continuous training is conducted during the off season. Opportunities are given to those with potential to move upwards in the organization.
• Accordingly, the Company has formulated various programmes like the employees reward recognition programme to encourage improved performance that results in greater guest satisfaction. This programme also helps employees to contribute towards cost saving, productivity, efficiency and better customer service. The relations with the employees during the year were very cordial.
9. CAUTIONARY STATEMENT: Comments made in this analysis describing the Company’s objectives, estimates may be “forward looking
statements” within the meaning of applicable securities law. These are based on assumptions over which the Company exercises no controls. The Company cannot guarantee the accuracy nor can it be sure that the results will occur. Significant factors that can affect the Company’s operations include domestic and international economic conditions affecting supply and demand, price of oil, change in tax and other Government regulations, etc.
For and on behalf of the Board of Directors
Place: Mumbai SUNDER G. ADVANI Date: August 13, 2009 Chairman & Managing Director
dvani Hotels & Resorts (India) LimitedAnnual Report 2008 - 2009
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CORPORATE GOVERNANCE REPORT
CORPORATE PHILOSOPHY:
The Company continues to adhere to the philosophy of good Corporate Governance and believes in values of transparency, professionalism and accountability. The Company has complied with all the mandatory requirements stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges.
BOARD OF DIRECTORS:
Composition of the Board
The Board of Directors of the Company consists of Executive and Non–Executive Directors, of whom three are Independent Directors who are experts in diverse fields. The Non–Executive Directors comprise of 50% of the total strength of the Board of Directors of the Company. The details are as follows:
Sr. No. Name of the Directors Category
1. Mr. Sunder G. Advani, Chairman & Managing Director Promoter Executive Director
2. Mr. Haresh G. Advani, Executive Director Promoter Executive Director
3. Mr. K. Kannan Independent Non–Executive Director
4. Mr. Prakash V. Mehta Independent Non–Executive Director
5. Mr. Anil Harish Independent Non–Executive Director
6. Mrs. Menaka S. Advani Non–Executive Director
Directors’ Attendance
During the year 2008–09, 8 (Eight) Board Meetings were held on 23.04.2008, 18.07.2008, 28.08.2008, 22.10.2008, 05.11.2008, 15.12.2008, 31.01.2009 and 02.03.2009. Majority of the Directors attended the Meetings. Leave of absence was granted to the Directors who expressed their inability to attend the Meetings.
The details of attendance of Directors at the Board Meetings and at the 21st Annual General Meeting as well as the details of their other Directorships / Committee Chairmanships or Memberships are as follows:
Sr. No.
Name of Directors Designation No. of Board
Meetings attended
Attendance at the last
AGM held on 28.08.2008
No. of Outside
Directorships #
No. of other Committee Chairmanships / Memberships
$
Chairmanship Membership
1. Mr. Sunder G. Advani Chairman & Managing Director
8 Present None None None
2. Mr. Haresh G. Advani Executive Director
8 Present None None None
3. Mr. K. Kannan Director 7 Absent 6 3 2
4. Mr. Prakash V. Mehta Director 7 Present 10 None 9
5. Mr. Anil Harish Director 8 Present 14 4 5
6. Mrs. Menaka S. Advani Director 7 Present None None None
# Excludes Directorships in Private Limited Companies, Unlimited Companies, Foreign Companies, Section 25 Companies and alternate Directorships.
$ Includes only membership/s of Audit Committee and Shareholders/Investors Grievance Committee of other Public Limited Companies.
dvani Hotels & Resorts (India) Limited
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AUDIT COMMITTEE:
The composition of the Committee and particulars of meetings attended by the Members of the Audit Committee are as under. During the year under review, 5 meetings of the Audit Committee were held on 23.04.2008, 16.06.2008, 18.07.2008, 22.10.2008 and 30.01.2009.
Sr. No.
Name of the Member Designation No. of Committee Meetings attended in the year under review
1. Mr. K. Kannan Chairman 5
2. Mr. Prakash V. Mehta Member 4
3. Mrs. Menaka S. Advani Member 5
All the members of the Audit Committee are non–executive Directors and two–thirds are independent Directors. The constitution of the Audit Committee also meets the requirements of the provisions of Section 292A of the Companies 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 including the observations of the Auditors, adequacy of internal audit functions, major accounting policies, practices and entries, compliance with accounting standards and with the Stock Exchanges and legal requirements concerning financial statements and related party transactions, if any.
– To review the Company’s financial and risk management policies and discuss with the internal auditors.
– To follow–up significant findings thereon.
– To review the quarterly, half yearly and annual financial statements before submission to the Board of Directors.
– To investigate into any matter in relation to the items specified in Section 292A of the Companies Act, 1956, or as may be referred to by the Board and for this purpose to seek any relevant information contained in the records 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 employee.
REMUNERATION COMMITTEE:
The composition of the Remuneration Committee and particulars of meetings attended by the Members of the Remuneration Committee are as under. The Committee approves the annual salaries, performance commission, service agreements and other employment conditions of the Executive Directors. During the year under review two Meetings of the Remuneration Committee was held on 21.08.2008 & 15.12.2008.
Sr. No.
Name of the Member Designation No. of Committee Meetings attended in the year under review
1. Mr. K. Kannan Chairman 2
2. Mr. Anil Harish Member 2
3. Mrs. Menaka S. Advani Member 2
4. Mr. Prakash V. Mehta (w.e.f.15.12.2008) Member 1
dvani Hotels & Resorts (India) LimitedAnnual Report 2008 - 2009
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The 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 from time to time;
– To periodically review the remuneration package of the Executive Directors and recommend suitable 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 ENDED MARCH 31, 2009
Sr. No.
Name of the Director Salary (Basic + HRA) Rs.
Perquisites (Incl. PF) Rs.
CommissionRs.
Service Tenure
Notice Period
1. Mr. Sunder G. Advani,Chairman & Managing Director
4,800,000 445,754 0 5 years 3 months
2. Mr. Haresh G. Advani, Executive Director
2,995,200 312,784 0 5 years 3 months
DETAILS OF SITTING FEES PAID TO NON–EXECUTIVE DIRECTORS DURING THE YEAR ENDED MARCH 31, 2009
Name of the Director Mr. K. Kannan Mr. Prakash V. Mehta Mr. Anil Harish Mrs. Menaka S. Advani
Sitting Fees Paid (Rs.) 280,000 240,000 200,000 280,000
SHAREHOLDERS/INVESTORS GRIEVANCE COMMITTEE:
The composition of the Committee is as follows:
Sr. No. Name of the Member Designation
1. Mrs. Menaka S. Advani Chairperson
2. Mr. Sunder G. Advani Member
3. Mr. Haresh G. Advani Member
4. Mr. K. Kannan Member
The Company has constituted a Shareholders/Investors Grievance Committee to look into the Redressal of complaints of shareholders and investors relating to transfer of shares, non–receipt of Annual report, dividends etc. The Chairperson of the Committee is a non–executive Director.
A meeting of the Shareholders’/Investors Grievance Committee was held on 31st January 2009.
During the year under review, the Company received 67 Shareholders’ Complaints, which were promptly responded to and resolved to the satisfaction of the respective shareholders and as on 31.03.2009 there were no pending complaints/ service requests, share transfers with the Company.
The Board has designated Mr. Kumar Iyer, Company Secretary as the Compliance Officer.
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GENERAL BODY MEETINGS:
Annual General Meetings held during the last 3 years
Particulars FY 2007–08 FY 2006–07 FY 2005–06
Date 28.08.2008 26.09.2007 26.09.2006
Location Kamalnayan Bajaj Hall, Ground Floor, Bajaj Bhavan, Jamnalal Bajaj Marg, Nariman Point, Mumbai – 400021
Seminar Hall of K. C. College, Dinshaw Wachha Road, Churchgate, Mumbai – 400020
4th Floor, Chavan Centre, General Jagannath Bhosale Marg, Nariman Point, Mumbai – 400021
Time 11.00 a.m. 3.00 p.m. 3.30 p.m.
All the Resolutions including the 3 Special Resolutions passed at the previous Annual General Meetings of the Company were unanimously passed by show of hands by the Members of the Company present and voted at the said meetings.
DISCLOSURES:
During the year, the Company has not entered into any material significant related party transactions with its Directors / Promoters that may have potential conflict with the interest of the Company at large. As required by the Accounting Standard AS–18, the details of Related Party Transaction are given in the Notes to the Accounts.
During the last three years, there were no penalties or strictures imposed on the Company either by the Stock Exchanges or SEBI for non–compliance of any matter related to capital market.
The Company has complied with all the mandatory requirements of Clause 49 relating to Corporate Governance. As per the non–mandatory requirements of Clause 49, the Company has formed the Remuneration Committee to determine the remuneration packages for the Executive Directors.
Pursuant to the provisions of Sub–Clause V of Clause 49 of the Listing Agreement with the Stock Exchanges, the Chairman & Managing Director (CMD) and the General Manager – Finance (CFO) have issued a Certificate to the Board, for the financial year ended March 31, 2009.
MEANS OF COMMUNICATION:
The Company communicates with the shareholders at large through its Annual Report, publication of financial results, press releases and by submission and filing of reports and returns with all statutory bodies.
The quarterly and yearly unaudited financial results are generally published in the ‘‘The Free Press Journal’ (in English) and ‘Navshakti’ / ‘Sakal’ (in Marathi). The financial results are also being posted on the Company’s Website–www.caravelabeachresort.com
Management Discussion and Analysis Report forms part of this Annual Report.
GENERAL SHAREHOLDERS INFORMATION:
22nd Annual General Meeting
Date & Time : Friday, 25th September, 2009 at 11.00 a.m. Venue : Rangaswar, 4th Floor, Chavan Centre, General Jagannath Bhosale Marg, Nariman Point, Mumbai – 400021
dvani Hotels & Resorts (India) LimitedAnnual Report 2008 - 2009
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Financial Calendar Results for the Quarter ended June 30, 2009 July 30, 2009 Annual General Meeting September 25, 2009 Results for the Quarter ending Sept. 30, 2009 Last week of Oct. 2009 Results for the Quarter ending Dec. 31, 2009 Last week of Jan. 2010 Results for the Quarter ending March 31, 2010 Last week of Apr. 2010
Date of Book Closure From Saturday, 19th September, 2009 to Friday, 25th September, 2009 (both days inclusive) for the purpose
of Annual General Meeting for the financial year ended March 31, 2009.
Listing on Stock Exchanges Bombay 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 Data
The 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, 2009 is given below.
Month High (Rs.)
Low (Rs.)
ClosePrice (Rs.)
Month High (Rs.)
Low (Rs.)
ClosePrice (Rs.)
April’08 96.00 87.00 92.40 October’08 50.00 30.00 32.90
May’08 102.00 91.00 99.50 November’08 41.00 26.35 26.70
June’08 103.95 66.00 70.35 December’08 36.75 25.80 35.70
July’08 67.50 52.90 63.75 January’09 38.70 23.00 27.80
August’08 64.90 55.25 58.05 February’09 29.00 23.15 24.70
September’08 61.75 43.50 45.70 March’09 30.60 22.00 29.25
Performance of Company’s share price in comparison to BSE Sensex.
AHRIL Share Price / BSE Sensex From April 2008 to March 2009
9709
8892
9424
96479093
9788
12860
1456514356
1641617287
13462
29.25
24.70
27.8035.70
26.70
32.90
45.70
58.05
63.75
70.35
99.5092.40
0
5,000
10,000
15,000
20,000
Apr'08 May'08 June'08 July'08 Aug'08 Sept'08 Oct'08 Nov'08 Dec'08 Jan'09 Feb'09 Mar'09
10
60
110
BSE Sensex AHRIL Share Prices
BS
E S
en
se
x
AH
RIL
Clo
sin
g P
ric
e a
t th
e e
nd
of
mo
nth
(R
s.)
dvani Hotels & Resorts (India) Limited
21
Registrar and Share Transfer Agent
Datamatics Financial Services Limited [Unit: Advani Hotels & Resorts (India) Limited] Plot No. A/16 & 17, Part B, Cross Lane, MIDC Marol, Andheri (East), Mumbai – 400093 Telephone No: (022) 66712237 Fax No: (022) 66712230 Contact Persons: Mr. Prashant Vaidya / Mr. Salim Shaikh
Share Transfer System The Share Transfer Committee constituted by the Board considers and approves all share related issues
like transfer, transmission, issue of duplicate shares, dematerialization, etc. The transfer formalities are attended to on fortnightly basis by Datamatics Financial Services Ltd. All the share certificates are returned within 21 days from the date of lodgment provided the transfer instruments are valid and complete in all respects.
Distribution of Shareholding as on March 31, 2009
Range(No. of Shares)
No. of Shareholders
% of Total No. of Shares % of Total
1 – 500 3640 66.05 1,365,855 2.96
501 – 1000 973 17.66 914,406 1.98
1001 – 2000 403 7.31 644,131 1.39
2001 – 3000 227 4.12 579,300 1.25
3001 – 4000 48 0.87 177,415 0.38
4001 – 5000 84 1.52 414,400 0.90
5001 – 10000 59 1.07 464,580 1.01
10001 and above 77 1.40 41,659,163 90.14Total 5511 100.00 46,219,250 100.00
Category of Shareholding as on March 31, 2009
Category No. of Shares % of Total
Promoters & Promoter Group 22,990,629 49.74
Mutual Funds 61,000 0.13
Bank / FIs / Insurance Companies 2,500 0.01
Foreign Institutional Investors Nil 0.00
Corporate Bodies 17,661,280 38.21
NRIs / OCBs 421,522 0.91
General Public 5,082,319 11.00
Total 46,219,250 100.00
Shares held by Non Executive Directors
Sr. No. Non Executive Directors No. of Shares held as on 31.03.2009
1. Mr. K. Kannan Nil
2. Mr. Prakash V. Mehta 500
3. Mr. Anil Harish Nil
4. Mrs. Menaka S. Advani 1,305,630
dvani Hotels & Resorts (India) LimitedAnnual Report 2008 - 2009
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Demat of shares and liquidity The Company’s shares are held in the dematerialized form by National Securities Depository Limited and
the Central Depository Services (India) Limited under the ISIN No. INE199C01026. Out of the total Equity Share Capital, 75.92% is held in dematerialised form as on March 31, 2009. Trading in Equity Shares of the Company is permitted only in dematerialised form w.e.f. 28.05.2001 as per the Notification issued by the SEBI.
As on date the Company has not issued GDRs/ADRs/Warrants or any other convertible instruments.
Location
Hotel Ramada Caravela Beach Resort Varca Beach, Varca Village, Salcette, Goa – 403721 Telephone No: (0832) 6695000
Address of correspondence Advani Hotels & Resorts (India) Limited 1009/1010, Dalamal Tower, 211, Nariman Point, Mumbai – 400021 Telephone No: (022) 2285 0101 Fax No: (022) 2204 0744 Email ID: [email protected]
CODE OF CONDUCT: The Board of Directors of the Company has laid a code of conduct for the Directors and senior management.
The code of conduct is posted on the Company’s website. All Directors and designated personnel in the senior management have affirmed compliance with the code for the year under review.
For and on behalf of the Board of Directors
Place: Mumbai SUNDER G. ADVANI Date: August 13, 2009 Chairman & Managing Director
dvani Hotels & Resorts (India) Limited
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AUDITORS’ CERTIFICATE ON CORPORATE GOVERNANCE
To the Members ofAdvani Hotels & Resorts India Limited
We have examined the compliance of Corporate Governance of ADVANI HOTELS & RESORTS (INDIA) LIMITED, for the year ended 31st March, 2009 as stipulated in Clause 49 of the Listing Agreement of the said Company with stock exchanges.
The compliance of conditions of Corporate Governance is the responsibility of the management. Our examination was limited to procedures and implementation thereof, adopted by the Company for ensuring the compliance of the conditions of Corporate Governance. It is neither an audit nor an expression of opinion on the financial statements of the Company.
In our opinion and to the best of our information and according to the explanations given to us and the representations made by the Directors and the Management, we certify that the Company has complied with the conditions of Corporate Governance as stipulated in the above mentioned Listing Agreement.
We state that no investor grievances are pending for a period exceeding one month against the Company as per 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 Company nor the efficiency or effectiveness with which the Management has conducted the affairs of the Company.
For J.G. VERMA & CO.Chartered Accountants
J.G. VERMAPartner
Mumbai, August 13, 2009 Membership No. 5005
dvani Hotels & Resorts (India) LimitedAnnual Report 2008 - 2009
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AUDITORS’ REPORT TO THE MEMBERSWe have audited the attached Balance Sheet of ADVANI HOTELS & RESORTS (INDIA) LIMITED, as at 31st March, 2009 and also the Profit and Loss Account and the Cash Flow Statement of the Company for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. 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 India in terms of sub–section (4A) of Section 227 of the Companies Act, 1956, and on the basis of such checks as we considered appropriate, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.
Further to our comments in the Annexure referred to above:
1. We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary 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 as appears from our examination of those books.
3. The Balance Sheet and Profit and Loss Account, dealt with by the Report, are in agreement with the books of account.
4. In our opinion, the Balance Sheet, Profit and Loss Account and the Cash Flow Statement comply with the applicable 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 on record by the Board of Directors, we report that none of the directors of the Company is disqualified as on 31st March, 2009 from being appointed as a director under clause (g) of sub–section (1) of Section 274 of the Companies Act, 1956.
6. In our opinion and to the best of our information and according to the explanations given to us, the said accounts, read together with the significant accounting policies stated in Schedule “K” and the other notes appearing thereon, give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:
(i) in the case of the Balance Sheet, of the state of the affairs of the Company as at 31st March, 2009;
(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 that date.
For J.G. VERMA & CO.Chartered Accountants
J.G. VERMAPartner
Mumbai, August 13, 2009 Membership No. 5005
dvani Hotels & Resorts (India) Limited
25
ANNEXURE REFERRED TO IN OUR REPORT OF EVEN DATE
1. (a) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.
(b) The fixed assets were physically verified during the year and after the close of the year by the management. On the basis of such verification, discrepancies were noticed in respect of some fixed assets, which have been determined by the management and the net value of such fixed assets amounting to Rs.1,542,697/- has been written off in the accounts.
(c) During the year, the Company has divested its flight catering unit, Airport Plaza, on a going concern basis. Although the fixed assets of the above unit disposed of were substantial, the same has not affected the going concern.
2. (a) In our opinion, physical verification of inventories has been conducted by the management at reasonable intervals;
(b) The procedures of physical verification of inventories followed by the management are reasonable and adequate in 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 that the company is maintaining proper records of inventory. Discrepancies, which were noticed on physical verification of inventory as compared to book records, were not material and have been properly dealt with in the books of account.
3. (a) The Company has not granted any loan or advance to companies, firms or other parties covered in the Register maintained under section 301 of the Companies Act, 1956 except an interest free advance of Rs. 635,231/- (maximum balance Rs. 13,890,034/-) being amount due on current account from one of its subsidiaries.
(b) The terms and conditions of above interest free advance given are prima facie not prejudicial to the interest of the Company.
(c) According to the information and explanations given to us, there is no stipulation for repayment of the above advance given by the Company to its subsidiary.
(d) In view of our comment in paragraph 3 (c) above, clause III (d) of paragraph of the aforesaid Order is not applicable to the Company.
(e) The Company has not taken any loan, secured or unsecured, during the year from companies, firms and other parties covered in the Register maintained under Section 301 of the Companies Act, 1956. In view of the same, our comments on clauses III (f) and (g) of paragraph (4) of the aforesaid Order are not applicable to the Company.
4. In our opinion, and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business for the purchase of inventory and fixed assets and for the sale of goods and services. During the course of our audit, no continuing failure to correct major weaknesses has been noticed in the internal controls.
5. To the best of our knowledge and belief and according to the information and explanations given to us, (a) the particulars of contracts or arrangements referred to in Section 301 of the Companies Act, 1956 have been entered in the register required to be maintained under that section; and (b) such transactions exceeding the value of Rupees five lacs in respect of any party during the year have been made at prices, which are reasonable having regard to prevailing market prices at the relevant time.
dvani Hotels & Resorts (India) LimitedAnnual Report 2008 - 2009
26
6. The Company has not accepted any deposits from the public within the meaning of Section 58A 58AA and other provisions of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975. Hence the clause (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 Chartered Accountants appointed by 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 Section 209(1)(d) of the 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, the Company has been generally regular in depositing undisputed statutory dues, including provident fund, investor education & protection fund, employees’ state insurance, income–tax, sales–tax, wealth–tax, service tax, customs duty, excise duty, cess and other applicable statutory dues with the appropriate authorities during the year. The Company’s operations do not give rise to any excise duty liability.
(b) According to the information and explanations given to us, there are no undisputed amounts payable in respect of undisputed statutory dues as at 31st March, 2009 which were outstanding for a period of more than six months from the date they became payable.
(b) According to the information and explanations given to us and on the basis of our examination of the documents 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 statute
Nature of dues Amount (Rs. in lakhs)
Period to which the amount
relates
Forum where the dispute is pending
Goa, Daman and Diu (Sales Tax) Act, 1964
Sales tax 18.01 Asst. Years 1995–96 to
1997–98
Asst. Commissioner of Commercial Tax
(Sales–Tax)
Goa, Daman and Diu (Sales Tax) Act, 1964
Sales tax 3.61 Asst. Year 2003–04
Asst. Commissioner of Commercial Tax
(Sales–Tax)
Central Sales Tax Act, 1956
Central Sales tax 12.16 Asst. Year 2005–06 & 2006–07
Asst. Commissioner of Commercial Tax (Value
Added Tax)
Goa Tax on Luxaries (Hotels and Lodging Houses) Act, 1988
Luxury Tax 25.03 Asst. Years 1995–96 to
1997–98
Asst. Commissioner of Luxury Tax
Income– tax Act, 1961
Income–tax on completion of
regular assessment
10.66 Asst Year 2005–06
Income–Tax Appellate Tribunal
10. The Company neither had accumulated losses at the end of the financial year nor incurred any cash losses either during the current financial year or immediately preceding financial year.
dvani Hotels & Resorts (India) Limited
27
11. According to the records of the Company examined by us and the information and explanations given to us, the Company had not defaulted in repayment of dues to banks as per loan agreements or extended due dates. There were 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 and advances on the 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 are not applicable to the Company.
14. The Company is not a dealer or trader in shares, securities, debentures, and other investments.
15. According to the information and explanations given to us, the Company has given guarantee for loan taken by its one of the subsidiaries from a bank, the terms and conditions whereof, in our opinion, are prima facie not prejudicial to the interest of the Company.
16. In our opinion on an overall basis, and according to the information and explanations given to us, the term loans taken 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 the Balance sheet of the Company, we report that funds raised on short term basis have prima facie, not been used during the year for long term investment.
18. The Company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under section 301 of the Companies Act, 1956.
19. The Company has not issued any debentures during the year under audit. Accordingly, the provisions of 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 of clause (XX) of paragraph 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 on or by the Company was noticed or reported during the year.
For J.G.VERMA & CO.Chartered Accountants
J.G.VERMAPartner
Mumbai, August 13, 2009 Membership No. 5005
dvani Hotels & Resorts (India) LimitedAnnual Report 2008 - 2009
28
BALANCE SHEET AS AT 31ST MARCH, 2009
Schedule Rupees Rupees Previous Year
Rupees SOURCES OF FUNDS:SHAREHOLDERS’ FUNDS:
Share Capital ........................................................ `A’ 92,438,500 92,438,500 Reserves and Surplus .......................................... `B’ 198,137,495 130,362,346
290,575,995 222,800,846 LOAN FUNDS:
Secured Loans ...................................................... `C’ 112,836,915 207,403,124 Unsecured Loans ................................................... `D’ 12,580,644 7,310,595
125,417,559 214,713,719 DEFERRED TAX LIABILITY (Net) ..................... 50,364,744 64,920,947
TOTAL ................................................................... 466,358,298 502,435,512 APPLICATION OF FUNDS: FIXED ASSETS: .................................................. `E’
Gross Block (At cost) ............................................ 669,775,597 758,148,517 Less: Depreciation ................................................ 225,149,888 262,954,011 Net Block ............................................................... 444,625,709 495,194,506 Capital Work in Progress ...................................... 1,785,841 29,295,110
446,411,550 524,489,616 INVESTMENTS: ......................................................... `F’ 100,000 22,385,500 (Refer Note 17 of Part B of Schedule “K”)
FOREIGN CURRENCY MONETARY ITEMSTRANSLATION DIFFERENCE: .................................(Refer Note 1 of Part B of Schedule “K”)
1,802,657 —
CURRENT ASSETS, LOANS AND ADVANCES: `G’ Interest accrued — 16,910 Stock ...................................................................... 15,916,533 18,434,164 Sundry Debtors ...................................................... 17,497,077 44,514,826 Cash and Bank Balances ...................................... 14,408,888 7,469,594 Loans and Advances ............................................. 120,726,735 57,447,824
168,549,233 127,883,318 LESS: CURRENT LIABILITIES AND PROVISIONS: `H’
Current Liabilities ................................................... 63,045,329 96,008,044 Provisions ............................................................... 87,459,813 76,314,878
150,505,142 172,322,922 NET CURRENT ASSETS: 18,044,091 (44,439,604)
TOTAL ................................................................... 466,358,298 502,435,512 SIGNIFICANT ACCOUNTING POLICIES & NOTES ON ACCOUNTS ......................................................... ‘K’
As per our report of even date FOR J.G.VERMA & CO. Chartered Accountants
Signature on the above Balance Sheet and Schedules “A” to “H” and “K”. For and on behalf of the Board
SUNDER G. ADVANI Chairman & Managing Director
HARESH G. ADVANI Executive Director
J. G. VERMAPartner
Mumbai: August 13, 2009KUMAR IYER
Company Secretary SHANKAR G. KULKARNI
General Manager – Finance (CFO)
dvani Hotels & Resorts (India) Limited
29
PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2009
Schedule Rupees Rupees Previous Year
Rupees INCOME:
Rooms, Restaurant, Bar, Banquets, Flight Cateringand Other Income ........................................................... `I’ 336,716,417 475,448,164
EXPENDITURE:Operating and General Expenses .................................. `J’ 269,440,925 307,806,533 Managerial Remunerwation ............................................ 8,553,738 10,226,400 Depreciation .................................................................... 25,086,088 26,065,313 Interest: (a) On Fixed Loans ......................................................... 14,354,585 22,354,785 (b) On Other Loans ......................................................... 2,230,328 5,623,073
16,584,913 27,977,858 319,665,664 372,076,104
PROFIT BEFORE EXCEPTIONAL ITEMS: ........................ 17,050,753 103,372,060 Less: Exceptional items (net) ........................................... `J-1' 22,234,243 —PROFIT / (LOSS) BEFORE TAXATION: ........................... (5,183,490) 103,372,060Add: (Less): Provision for taxation Current tax .......................................................................... (7,700,000) (32,500,000) Fringe Benefits tax .............................................................. (1,158,000) (1,100,000) Deferred tax ........................................................................ 14,556,203 (5,298,726)
5,698,203 (38,898,726)PROFIT FOR THE YEAR BEFORE ADJUSTMENTS: ....... 514,713 64,473,334Less : Prior Periods adjustments (net) (Incl Rs. Nil for taxes (Prev. Year Rs. 449,830/-) .................................................... — (665,957)PROFIT AFTER TAX AND ADJUSTMENTS: .................... 514,713 63,807,377Add: Profit brought forward ................................................... 64,368,446 36,567,843 Less: Adjustment on adoption of AS–11 Notification .......... (8,690,847) — (Refer Note 1 of Part B of Schedule "K") ............................ 55,677,599 36,567,843 PROFIT AVAILABLE FOR APPROPRIATION: ................. 56,192,312 100,375,220 Less: Appropriations made:Interim Dividend .................................................................... — (18,487,700)Dividend Distribution Tax on Interim Dividend ...................... — (1,256,814)Proposed Dividend ................................................................ — (9,243,850)Dividend Distribution Tax on Proposed Dividend ................. — (628,410)Transfer to General Reserve ................................................. (20,000,000) (6,390,000)
(20,000,000) (36,006,774)Balance Profit carried to Balance Sheet ............................. 36,192,312 64,368,446 Basic and Diluted Earnings Per Share (In Rs.) .................. 0.01 1.38 Face value Rs. 2/- per share (Refer Note 13 Part B of Schedule "K") SIGNIFICANT ACCOUNTING POLICIES & NOTES ON ACCOUNTS `K'
As per our report of even date FOR J.G.VERMA & CO. Chartered Accountants
Signature on the above Balance Sheet and Schedules “I” to “J-1” and “K”. For and on behalf of the Board
SUNDER G. ADVANI Chairman & Managing Director
HARESH G. ADVANI Executive Director
J. G. VERMAPartner
Mumbai: August 13, 2009KUMAR IYER
Company Secretary SHANKAR G. KULKARNI
General Manager – Finance (CFO)
dvani Hotels & Resorts (India) LimitedAnnual Report 2008 - 2009
30
CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2009CASH FLOW STATEMENT FOR THE YEAR ENDED 31st March, 2009
Rupees31st March, 2008
RupeesA. CASH FLOW FROM OPERATING ACTIVITIES:
Net Profit / (Loss) before tax and adjustments .............................................................. (5,183,490) 103,372,060Adjustments for:–Depreciation .................................................................................................................... 25,086,088 21,798,875(Profit)/Loss on sale of assets ........................................................................................ 2,187,818 8,340,436Profit on sale of Flight kitchen ........................................................................................ (37,544,603) —Notional Foreign Exchange Rate Difference .................................................................. — (15,080,846)Duty Free Entitlement ..................................................................................................... (1,310,285) (9,921,913)Provision for doubtful debts ............................................................................................ 1,945,163 —Provision for incomplete Jaipur Project .......................................................................... 11,958,615 —Provision for diminution in value of Investment .............................................................. 22,185,000 —Provision for doubtful Loans & Advances ....................................................................... 25,635,231 —Provision for retirement benefits ..................................................................................... (1,440,805) 1,471,435Interest and Dividend Income ......................................................................................... (17,925,978) (132,592)Interest Expenses ........................................................................................................... 16,584,913 27,977,858Amortisation of Foreign Exchange Difference ................................................................ 901,328 —
Operating profi t before working capital changes: ........................................................... 43,078,995 137,825,313Adjustments for:–
Trade & other receivable ................................................................................................. 25,072,586 (3,669,298)Inventories ....................................................................................................................... 2,517,631 1,237,099Trade payable .................................................................................................................. (12,719,754) 15,786,904
Cash generated from operations: ...................................................................................... 57,949,458 151,180,018Direct Taxes paid (Net of refund received) ..................................................................... (48,294,910) (16,688,037)
Cash Flow before Extraordinary Items:............................................................................. 9,654,548 134,491,981Extraordinary Items of expenses .................................................................................... — (196,127)
Net cash from Operating Activities: ................................................................................ 9,654,548 134,295,854B. CASH FLOW FROM INVESTMENT ACTIVITIES:
Purchase of Fixed Assets: .............................................................................................. (17,011,269) (91,965,974)(including Capital Work–in–progress)Decrease/ (increase) in Loans, Advances and deposits ................................................ (40,619,232) 45,340Disposal of Investment .................................................................................................... 100,500 —Net Sale consideration of Flight Kitchen unit ................................................................. 197,785,026 —Sale of Fixed Assets ....................................................................................................... 133,266 1,420,667Interest and Dividend Received ...................................................................................... 17,942,888 132,592
Net Cash from Investing Activities .................................................................................... 158,331,179 (90,367,375)C. CASH FLOW FROM FINANCING ACTIVITIES:
Proceeds from Borrowings:Term Loans ..................................................................................................................... 3,593,946 63,674,332Unsecured Loans ............................................................................................................ 7,912,451 4,648,106Cash Credits ................................................................................................................... — 1,724,915Repayment of : Term Loans ..................................................................................................................... (104,334,592) (80,758,121)Cash Credits ................................................................................................................... (18,875,702) —Unsecured Loans ............................................................................................................ (2,642,402) (5,307,529)Interest paid .................................................................................................................... (17,441,520) (27,977,858)Dividend for earlier years including dividend tax ............................................................ (29,258,614) (4,696,374)
Net Cash used in Financing Activities .............................................................................. (161,046,433) (48,692,529)NET INCREASE/(DECREASE) IN CASH & CASH EQUIVALENTS (A+B+C) ................... 6,939,294 (4,764,050)CASH & CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR (Opening Balance) 7,469,594 12,233,644CASH & CASH EQUIVALENTS AT THE CLOSING OF THE YEAR (Closing Balance) 14,408,888 7,469,594
As per our report of even date FOR J.G.VERMA & CO. Chartered Accountants
Signature on the above Cash Flow StatementFor and on behalf of the Board
SUNDER G. ADVANI Chairman & Managing Director
HARESH G. ADVANI Executive Director
J. G. VERMAPartner
Mumbai: August 13, 2009KUMAR IYER
Company Secretary SHANKAR G. KULKARNI
General Manager – Finance (CFO)
dvani Hotels & Resorts (India) Limited
31
SCHEDULES FORMING PART OF THE BALANCE SHEET AS AT 31ST MARCH, 2009
SCHEDULE “A” : SHARE CAPITALRupees Rupees
Previous YearRupees
AUTHORISED: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 50,500,000
TOTAL 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 92,438,500
TOTAL 92,438,500 92,438,500
SCHEDULE “B” : RESERVES AND SURPLUSCAPITAL RESERVE
As per last accounts: Subsidy received under the Central InvestmentSubsidy Scheme 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 14,000
49,603,900 49,603,900Surplus being capital gain on sale of flight catering unit during the year (net of income tax of Rs. 13,600,000/-{Prev. Year Nil}) 82,341,283 —(Refer Note 16 of Part B of Schedule “K”) 131,945,183 49,603,900
CAPITAL REDEMPTION RESERVEAs per last accounts: ..................................................................... 10,000,000 10,000,000
GENERAL RESERVE:As per last accounts: ..................................................................... 6,390,000 —Less: Adjustment on adoption of AS–11 Notification .................... 6,390,000 —(Refer Note 1 of Part B of Schedule “K”) — —Add: Set aside this year ................................................................ 20,000,000 6,390,000
20,000,000 6,390,000SURPLUS IN PROFIT AND LOSS ACCOUNT ................................ 36,192,312 64,368,446
TOTAL 198,137,495 130,362,346
SCHEDULE “C” : SECURED LOANSFROM BANKS:
1. Term Loan (By way of ECB) (Note 1) ...................................... 40,760,000 40,377,000 2. Additional Term Loan (Note 1 and 5)) ..................................... — 5,154,006 3. New Term Loan for renovation (Note 1 and 5) ........................ — 24,607,740 4. New Foreign Currency Term Loan for renovation (Note 1) ..... 41,776,867 42,641,650 5. Rupee Term Loan for renovation ( Note 2 and 5) ................... — 39,654,453 6. Medium Term Loans (Note 2) .................................................. 201 153 7. Foreign Currency Term Loan ( Note 3) .................................... 16,725,912 22,518,485 8. Cash Credits (Note 4) .............................................................. 13,573,935 32,449,637
TOTAL 112,836,915 207,403,124 NOTES:1. Loans under items No. (1) to (4) from Bank of Baroda are secured by (i) a mortgage executed in favour of Bank of Baroda by deposit
of title deeds of all the immovable properties of the Company situated at Village Varca, Salcette, Goa, both present and future, (ii) a pari passu charge by way of hypothecation of all the movables (except book debts) including machinery, spares, tools and accessories, present and future (subject to the charges created in favour of the Company’s Bankers on its stocks of raw material, consumable stores, etc. for working capital borrowings) and (iii) personal guarantees of the Managing Director and Executive Director. The balance in Loan Account under item No. (1) and (4) is after adjustment of foreign exchange loss of Rs.20,245,354/- (Prev. year gain of Rs. 12,980,046/-) arose during the year.
dvani Hotels & Resorts (India) LimitedAnnual Report 2008 - 2009
32
SCHEDULES FORMING PART OF THE BALANCE SHEET AS AT 31ST MARCH, 20092. Loans under item No. (5) and (6) from Bank of India is secured by way of second charge on immovable properties of the Company
situated at Village Varca, Salcette, Goa, both present and future and a second charge on all the movable assets of the Company including machinery, spares, tools and accessories, present and future and by way of personal guarantees of the Managing Director and Executive Director.
3. Loan under item No. (7) from Bank of India is secured by first charge on the moveable and immovable properties of the Company referred to in (1) above on a pari passu basis along with with Bank of Baroda. The balance in above Loan Account is after adjustment of foreign exchange loss of Rs. 4,804,786/- (Prev. year gain of Rs. 2,100,800/-) arose during the year.
4. Cash Credits from Bank of Baroda an Bank of India under item No. (8) are secured by hypothecation of Company’s inventories of stocks, stores and provisions, goods in transit and other moveable items and book debts, both present and future.
5. Loans under items No. (2), (3), and (5) have been repaid during the year.
6. Amount payable within one year Rs. 43,247,000/- (Prev. Year Rs. 93,616,000/-).
SCHEDULE “D” : UNSECURED LOANS Rupees Previous YearRupees
Vehicle Loans ................................................................................................................. 9,729,804 4,409,755
From erstwhile Collaborators ......................................................................................... 14,840 14,840
Security Deposit from Subsidiary Company .................................................................. 1,186,000 1,186,000Security Deposits from Shops and Others .................................................................... 1,650,000 1,700,000
TOTAL 12,580,644 7,310,595
SCHEDULE “E” FIXED ASSETS
Description GROSS BLOCK (AT COST) DEPRECIATION NET BLOCK
As at1.4.2008
Additions(Note 2)
Deductions As at31.3.2009
Upto31.3.2008
For theyear
Less: Sales/Adjustments(Note 3)
As at31.3.2009
As at31.3.2009
As at31.3.2008
1 Land (Free hold) 31,826,823 55,696 8,255,973 23,626,546 — — — — 23,626,546 31,826,823
(Including landscaping)
2 Buildings 419,149,747 8,575,646 47,751,143 379,974,250 99,853,706 9,861,019 11,184,813 98,529,912 281,444,338 319,296,041
3 Plant & Machinery 157,649,145 10,672,185 41,984,798 126,336,532 70,006,337 6,912,334 24,723,274 52,195,397 74,141,135 87,642,808
4 Furniture, Fixtures & Office Equipment
122,195,658 10,021,961 13,748,876 118,468,743 76,520,549 6,269,511 12,858,501 69,931,559 48,537,184 45,675,109
5 Vehicles & Motor Boats 24,862,231 10,738,962 16,564,604 19,036,589 16,099,765 1,665,569 14,030,659 3,734,675 15,301,914 8,762,466
6 Intangible Asset – Computer Software
2,464,913 355,959 487,935 2,332,937 473,654 377,655 92,964 758,345 1,574,592 1,991,259
TOTAL 758,148,517 40,420,409 128,793,329 669,775,597 262,954,011 25,086,088 62,890,211 225,149,888 444,625,709 495,194,506
PREVIOUS YEAR TOTAL 710,603,561 97,896,424 50,351,468 758,148,517 281,745,501 26,065,313 44,856,803 262,954,011 495,194,506
7 Capital Work in Progress [See note (1) below] 1,785,841 29,295,110
NOTES:
1 Capital Work in Progress includes:
(a) Advances of Rs. 7,253,400/- (Prev. Year Rs. 7,253,400) and Pre–Operative Expenses of Rs. 4,705,215/- (Prev. Year Rs. 4,817,715/- paid and incurred on proposed Jaipur Hotel Project, which is considered doubtful. These amounts are net of Provision of Rs. 11,958,615/- made for such doubtful project.
(b) Pre–Operative Expenses include : Payments of Legal and Consultants’ Fees – Rs. 1,667,135/- (Prev. Year Rs. 2,336,760); Travelling & Conveyance of Rs. 986,271/- (Prev. Year Rs. 986,271) and Security and other Expenses of Rs. 2,051,809/- (Prev. Year Rs. 1,469,877).
(c) Expenses and advances of Rs. 1,785,841/- (Prev. year Rs. 16,936,116/-) incurred on renovation/refurbishing of the hotel, pending completion of the work, (pending allocation).
2 Additions to Fixed Assets include Rs. 7,265,307/- (Prev. Year Rs. Nil) being loss due to fluctuation in foreign currency rates capitalised in accordance with AS–11 Notification. Refer Note 1 of Part B of Schedule “K”.
3 Adjustment from Depreciation include excess provision made in earlier years of Rs. Nil (Prev. Year 4,266,439/-), which has been written back during the year.
dvani Hotels & Resorts (India) Limited
33
SCHEDULES FORMING PART OF THE BALANCE SHEET AS AT 31ST MARCH, 2009
SCHEDULE “F” INVESTMENTS (Long Term) Rupees Rupees Previous Year Rupees
Trade : (At cost) Investment in Shares of Subsidiary Companies: (Unquoted) (Fully paid up) Advani Pleasure Cruise Co. Private Limited 2,218,500 Equity Shares of Rs. 10 each .............................................. 22,185,000 22,185,000 Less: Provision for diminution in value of Investment ........................... 22,185,000 —(Refer Note 17 of Part B of Schedule “K”) — 22,185,000Advani Flight Catering Services Private Limited 10,000 Equity Shares of Rs. 10 each ................................................... 100,000 100,000 Other : (At cost) Priyadarshini Mahila Co–Op Bank Ltd. 10,050 Shares of Rs. 10 each (Unquoted) ........................................... — 100,500
TOTAL 100,000 22,385,500 Note: Aggregate of unquoted investments – Cost .................................. 100,000 22,385,500
SCHEDULE “G” CURRENT ASSETS, LOANS AND ADVANCES:CURRENT ASSETS:Interest accrued .................................................................................... — 16,910
Stock: (Valued and certified by the Management) Stores and Operating Supplies .............................................................. 14,126,434 15,850,011 Food and Beverage ................................................................................ 1,790,099 2,584,153
15,916,533 18,434,164 Sundry Debtors: (Unsecured, good unless otherwise stated) Over six months (Rs.3,059,160/- Considered doubtful (Prev. Year Rs. 1,113,997/-) (Refer Note 7 (a) of Part B of Schedule “K”) .............. 3,951,601 2,968,495 Others .................................................................................................... 16,604,636 42,660,328
20,556,237 45,628,823 Less: Provision for doubtful debts ......................................................... 3,059,160 1,113,997
17,497,077 44,514,826 Cash & Bank Balances: Cash on Hand ........................................................................................ 1,449,786 956,107 Balance with Scheduled Banks on: Current Accounts ........................................................................... 10,623,288 4,674,955 Margin / Deposit Account .............................................................. 2,206,692 1,709,410 Balance with Other Banks on: Current Account (Refer Note 7 (c) of Part B of Schedule “K”) ..... 129,122 129,122
14,408,888 7,469,594 LOANS AND ADVANCES: (Unsecured, good unless otherwise stated) Advances recoverable in cash or in kind or for value to be received ... 41,645,349 14,917,225 Rs. 25,635,231/- considered doubtful (Prev. Year Nil) (Refer Note 7 (a) of Part B of Schedule “K”) Less: Provision for doubtful loans and advances ................................. 25,635,231 —
16,010,118 14,917,225 Deposits ................................................................................................ 17,801,989 3,910,881 Payments of taxes ................................................................................. 86,914,628 38,619,718
120,726,735 57,447,824 TOTAL 168,549,233 127,883,318
dvani Hotels & Resorts (India) LimitedAnnual Report 2008 - 2009
34
SCHEDULES FORMING PART OF THE BALANCE SHEET AS AT 31ST MARCH, 2009
SCHEDULE “H” Rupees RupeesPrevious Year
Rupees
CURRENT LIABILITIES AND PROVISIONS:
CURRENT LIABILITIES:
Sundry Creditors ............................................................................... 37,716,114 37,484,261
[Include Rs. Nil due to directors (Prev. Year Rs. 4,974,290/- and Rs. Nil) (Prev. Year Nil) due to Micro and Small Enterprises]
Interest accrued but not due on loans .............................................. 212,417 1,069,024
Interim Dividend payable ................................................................... — 18,487,700
Dividend Distribution Tax payable ..................................................... — 1,256,814
Dividend Warrants issued but not encashed .................................... 678,755 320,595
Other Liabilities ................................................................................. 24,438,043 37,389,650
63,045,329 96,008,044
PROVISIONS:
Provision for taxation
As per last accounts: ......................................................................... 59,589,077 25,519,247
Add: Addition during the year ........................................................... 22,458,000 34,069,830
82,047,077 59,589,077
Less: Deduction during the year ....................................................... — —
82,047,077 59,589,077
Provision for retirement benefits
As per last accounts: ......................................................................... 6,853,541 5,382,106
Add: Addition during the year ........................................................... 177,371 1,471,435
7,030,912 6,853,541
Less: Deduction during the year ....................................................... 1,618,176 —
5,412,736 6,853,541
Proposed Dividend ............................................................................ — 9,243,850
Dividend Distribution Tax ................................................................... — 628,410
— 9,872,260
87,459,813 76,314,878
TOTAL 150,505,142 172,322,922
dvani Hotels & Resorts (India) Limited
35
SCHEDULES FORMING PART OF THE PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2009
SCHEDULE “I”Rupees Rupees
Previous YearRupees
ROOMS, RESTAURANTS, BAR, BANQUETS,FLIGHT CATERING AND OTHER INCOME:1. (a) Rooms, Restaurants, Banquets, Flight Catering and Other Services
(Gross) ......................................................................................................... 290,660,680 407,236,822[Include sale of food, beverages, etc. Rs. 72,146,383/-)(Prev. Year Rs. 151,611,695)][Refer Note 16 of Part B of Schedule “K”](Tax deducted at source Rs. 1,033,232/-) (Prev.Year Rs. 2,058,787)(b) Wines and liquor .................................................................................... 14,832,012 23,939,782(c) Telephone ............................................................................................... 245,451 387,839
305,738,143 431,564,4432. Other Income:
Exchange Gain (net) ................................................................................... 7,045,275 23,890,792[Incl. Gain of Rs. Nil for Foreign Currency Loans(Prev. Year Rs. 15,080,846)][Refer Note 1 of Part B of Schedule “K”]Interest (Gross) ........................................................................................... 1,287,228 132,592(Tax deducted at source Rs. 139,344/-) (Prev. Year Rs. 23,416/-)Dividend from Subsidiary on Long Term Investments ................................ 16,638,750 —Excess provisions/credits written back ....................................................... 1,010,747 5,642,551(Including liabilities not payable written back)Miscellaneous Income ................................................................................. 4,996,274 14,217,786[Refer Note 7 (d) of Part B of Schedule “K”]
30,978,274 43,883,721TOTAL 336,716,417 475,448,164
SCHEDULE “J”OPERATING AND GENERAL EXPENSES:1 Operating Expenses(A) CONSUMPTION OF PROVISIONS, WINES AND SMOKES:
i) Provisions, Beverages (excluding Wines and Liquor) and smokes:Opening Stock .................................................................................... 1,606,299 1,578,013Add: Purchases .................................................................................. 22,432,040 47,627,264
24,038,339 49,205,277Less: Closing Stock ............................................................................ 714,296 1,606,299
23,324,043 47,598,978ii) Wine and Liquor:
Opening Stock .................................................................................... 977,854 1,028,525Add: Purchases .................................................................................. 2,932,251 3,586,698
3,910,105 4,615,223Less: Closing Stock ............................................................................ 1,075,803 977,854
2,834,302 3,637,36926,158,345 51,236,347
(B) PAYMENTS TO AND PROVISIONS FOR EMPLOYEES:Salaries, Wages and Bonus ............................................................... 59,996,534 72,130,337Contributions to Provident and Other Funds ..................................... 4,030,929 4,404,649Provision for retirement benefits (Gratuity and Leave Encashment benefits) .............................................................................................. 844,181 1,658,572Workmen and Staff Welfare Expenses 6,896,746 8,807,749
71,768,390 87,001,307Carried Forward 97,926,735 138,237,654
dvani Hotels & Resorts (India) LimitedAnnual Report 2008 - 2009
36
SCHEDULES FORMING PART OF THE PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2009
SCHEDULE “I”Rupees Rupees
Previous YearRupees
Brought Forward 97,926,735 138,237,654(C) OTHER OPERATING EXPENSES:
Power and Fuel .................................................................................. 30,517,219 35,059,790Licences, Rent, Rates and Taxes ...................................................... 8,088,676 6,273,672Repairs to Building ............................................................................. 29,539,093 11,451,635Repairs to Plant and Machinery ........................................................ 8,982,161 8,236,441Repairs – Others ................................................................................ 3,683,973 3,666,303Replacements..................................................................................... 3,393,846 2,453,688Expenses on Apartments and Board ................................................. 9,947,126 14,461,670Water Charges ................................................................................... 4,070,319 4,115,282
98,222,413 85,718,481(D) General Expenses:
Printing and Stationery ...................................................................... 1,615,542 1,894,501Expenses on communication ............................................................. 3,208,104 2,842,959Travelling and Conveyance ................................................................ 14,215,655 14,773,330Insurance ............................................................................................ 1,921,849 3,361,372Advertisement and Publicity ............................................................... 6,930,403 5,572,549Royalty ................................................................................................ 5,704,227 6,604,272Service Charges – Marketing and collections ................................... 9,845,773 13,671,538Band and Music ................................................................................. 5,475,428 6,700,300Directors’ Fees ................................................................................... 1,000,000 840,000Legal and Professional Fees ............................................................. 13,423,555 10,294,457Donations ........................................................................................... 855,675 667,325(Includes Rs. 500,000/- (Prev.Year 100,000/-) paid to Goa Pradesh Congress Committee)Bad debts and irrecoverable advances written off ............................ 121,938 1,346,532Provision for Doubtful debts ............................................................... 1,945,163 —Loss on sale/discard of fixed assets, etc. (Net) ................................. 2,187,818 8,340,436Service tax and other Taxes .............................................................. 250,472 1,009,521(Incl Rs. Nil for earlier years (Prev. Year Rs. 1,009,521)Amortisation of Foreign Exchange Monetary Item Translation Difference (Refer Note 1 of Part B of Schedule “K”) ......................... 901,328 —Miscellaneous Expenses .................................................................... 3,688,847 5,931,306
73,291,777 83,850,398TOTAL 269,440,925 307,806,533
SCHEDULE “J–1”: EXCEPTIONAL ITEMS:Exceptional items of Expenses:Provision for incomplete Hotel Project, considered doubtful ............. 11,958,615 —(Refer Note 1 (a) of Schedule “E”)Provision for diminution in value of Investment in Subsidiary ........... 22,185,000 —(Refer Note 17 of Part B of Schedule “K”)Provision for doubtful loans and advances ........................................ 25,635,231 —(Refer Note 17 of Part B of Schedule “K”)
59,778,846 —Less: Exceptional item of Income:Profit on sale of Flight Catering Unit ................................................. 37,544,603 —[Refer Note 16 of Part B of Schedule “K”]
TOTAL 22,234,243 —
dvani Hotels & Resorts (India) Limited
37
SCHEDULES FORMING PART OF THE PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2009
SCHEDULE “K” SIGNIFICANT ACCOUNTING POLICIES AND NOTES ON ACCOUNTS:
A. SIGNIFICANT ACCOUNTING POLICIES:
1. Basis for preparation of fi nancial statements:
The financial statements are prepared and presented under the historical cost convention on the accrual basis of accounting in accordance with accounting principles accepted in India (“Indian GAAP”) and are in compliance with Accounting Standards as notified by the Companies (Accounting Standards) Rules, 2006.
2. Use of Estimates:
The preparation of the financial statements in conformity with the Indian GAAP requires Company management to make estimates and assumptions that affect the reported amount of assets and liabilities and the disclosure of contingent liabilities as of the date of the financial statements. Actual results could differ from these estimates and assumptions. Any revision to accounting estimates is recognized prospectively in the current and future periods.
3. Revenue Recognition:
The Company derives revenues primarily from hospitality services. Revenue on time and material contracts are recognized as the related services are performed. Revenue yet to be billed is recognized as unbilled revenue. Sales and services are stated exclusive of taxes.
Export Benefit in the nature of Duty Credit Scrips on capital account is recognised in the Profit and Loss Account upon the actual utilization of Duty Credit Scrips.
4. Fixed Assets:
Fixed Assets are stated at cost less depreciation. In the case of new projects successfully implemented, substantial expansion of existing units and expenditure resulting into enduring benefit, all pre–operative expenses including interest on borrowings for the project, incurred up to the date of installation are capitalised and added pro–rata to the cost of fixed assets.
5. Depreciation:
(i) Depreciation is provided in the accounts on straight–line method at the rates prescribed in Schedule XIV to the Companies Act, 1956.
(ii) Where the historical cost of a depreciable asset undergoes a change due to increase or decrease on account of price adjustments, changes in duties or similar factors, depreciation on the revised amount is provided prospectively over the residual useful life of the asset.
6. Impairment:
In accordance with Accounting Standard 28 – Impairment of Assets, the carrying amount of the Company’s assets including intangible assets are reviewed at each balance sheet date to determine whether there is any indication of impairment. If any such indication exists, the asset’s recoverable amount is estimated, as the higher of the net selling price and the value in use. Any impairment loss is recognized whenever the carrying amount of an asset or its cash generating unit exceeds its recoverable amount.
7. Investments:
Long Term Investments are valued at cost. Provision for diminution in value is made, if in the opinion of the management, such a decline is considered permanent. Other Investments are valued at cost or market value whichever is lower.
8. Inventories:
Stock of food, beverages and operating supplies are carried at cost (computed on weighted average basis) or net realizable value, whichever is lower.
9. Employee Benefi ts:
Company’s contributions to Provident Fund are charged to Profit and Loss Account. Gratuity payable at the time of retirement are charged to Profit and Loss Account on the basis of independent external actuarial valuation determined on the basis of the projected unit credit method carried out annually Actuarial gains and losses are immediately recognized in the Profit and Loss Account. Gratuity in certain applicable cases is provided for in accordance with the provisions of the Goa Shops & Establishment Act, 1973. Provision for leave encashment is made on the basis of independent external actuarial valuation carried out at the end of the year.
dvani Hotels & Resorts (India) LimitedAnnual Report 2008 - 2009
38
SCHEDULES FORMING PART OF THE PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2009
SCHEDULE “K” SIGNIFICANT ACCOUNTING POLICIES AND NOTES ON ACCOUNTS- (Contd.)
10. Foreign Currency Transactions:
(i) Sales made in foreign currency are converted at the prevailing applicable exchange rate. Gain/Loss arising out of fluctuation in exchange rate is accounted for on realization.
(ii) Payment made in foreign currency including for acquiring fixed assets are converted at the applicable rate prevailing on the date of remittance. Liability on account of foreign currency is converted at the exchange rate prevailing at the end of the year except in cases of subsequent payments where liability is provided at actual. Foreign currency in hand is translated at the year–end exchange rate.
(iii) Monetary assets and liabilities denominated in foreign currency at the balance sheet date other than long term foreign currency items of assets and liabilities having a term of twelve months or more as discussed herein below, are translated at the year end exchange rate and the resultant exchange differences are recognised in the Profit and Loss Account. Exchange differences relating to long term foreign currency items of assets and liabilities having a term of twelve months or more as covered in the Companies (Accounting Standards) Amendment Rules 2009 on Accounting Standard 11 (AS–11) notified by Government of India on 31st March 2009 in so far as they relate to the acquisition of a depreciable capital asset, are added to or deducted from the cost of the assets and depreciated over the balance useful life of the asset, and in other cases are accumulated in a “Foreign Currency Monetary Item Translation Difference Account” and amortized over the balance period of such long term monetary item in accordance with the aforesaid Notification (Refer Note 1 of Part B ofSchedule “K”).
11. Prior period adjustments, Extra Ordinary items and Changes in accounting policies:
Prior period adjustments, extraordinary items and changes in accounting policies having material impact on the financial affairs of the Company are disclosed.
12. Leases:
Lease payment under an operating lease is recognized as an expense in the Profit and Loss account on a straight line basis over the lease period.
Assets taken on finance lease are capitalized and finance charges are charged to Profit and Loss account on accrual basis.
13. Borrowing costs:
Borrowing costs that are directly attributable to and incurred on acquiring qualifying assets (assets that necessarily takes a substantial period of time for its intended use) are capitalized. Other borrowing costs are recognized as expenses in the period in which same are incurred.
14. Segment Accounting:
Reportable Segments are identified having regard to the dominant source of revenue and nature of risks and returns.
15. Taxes on Income:
Tax on income for the current period is determined on the basis of taxable income and tax credits computed in accordance with the provisions of the Income Tax Act, 1961. Deferred tax is recognized on timing differences between the accounting income and the taxable income for the year, and quantified using the tax rates and laws enacted as on the Balance Sheet date. Deferred tax assets are recognized and carried forward to the extent that there is a reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized.
16. Accounting Provisions, Contingent Liabilities and Contingent Assets:
Provisions are recognized in terms of Accounting Standards 29 – “Provisions, Contingent Liabilities and Contingent Assets” as notified by the Companies (Accounting Standards) Rules, 2006, when there is a present legal or statutory obligation as a result of past events where it is probable that there will be outflow of resources to settle the obligation and when a reliable estimate of the amount of the obligation can be made.
Contingent Liabilities are recognized only when there is a possible obligation arising from past events due to occurrence of one or more uncertain future events not wholly within the control of the Company or where any present obligation cannot be measured in terms of future outflow or resources or where a reliable estimate of the obligation cannot be made. Obligations are assessed on an ongoing basis and only those having a largely probable outflow of resources are provided for.
dvani Hotels & Resorts (India) Limited
39
SCHEDULES FORMING PART OF THE PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2009
SCHEDULE “K” SIGNIFICANT ACCOUNTING POLICIES AND NOTES ON ACCOUNTS- (Contd.)
B. NOTES ON ACCOUNTS:
1. Hitherto the Company was accounting all the exchange differences resulting from translation of monetary assets and liabilities at the year end rates in the Profit and Loss Account. This year the Company has opted for accounting such exchange differences arising on reporting of long term foreign currency monetary items in line with Companies (Accounting Standards) Amendment Rules 2009 on Accounting Standard 11 (AS–11) notified by Government of India on 31st March, 2009. Accordingly such exchange difference on foreign currency loans is accounted by addition to or deduction from the cost of the related assets so far it relates to depreciable capital assets and in other cases by transfer to “Foreign Currency Monetary Item Translation Difference Account” {“FCMITD Account”} to be amortized in accordance with the aforesaid Notification. Exchange difference gain of Rs. 15,080,847/- recognised in the Profit and Loss Account in the previous year ended 31st March, 2008 relating to said long term liabilities in foreign currency has been reversed and deducted from the concerned depreciable assets amounting to Rs.12,980,047/- and/or credited to “FCMITD Account” amounting to Rs. 2,100,800/- by a corresponding debit to the to the extent of Rs. 6,390,000/- being balance available in opening General Reserve as provided in the aforesaid Notification and balance of Rs. 8,690,847/- by debit to the Profit and Loss Account in the absence of sufficient balance in the opening General Reserve. The Company has reversed foreign exchange revaluation loss amounting to Rs.18,759,731/- on translation of foreign currency loans, which was charged to Profit and Loss Account during the first three quarters of financial year 2008–09 as an exceptional item and debited to concerned depreciable assets and / or to “FCMITD Account”.
As a result of this change, profit for the year ended 31st March, 2009 is higher by Rs. 25,050,140/- with corresponding increase of Rs. 20,245,354/- in carrying cost of fixed assets and Rs. 4,804,786/- in “FCMITD Account” respectively. The Company has amortized Rs. 901,328/- in the Profit and Loss Account for the year ended 31st March, 2009 and balance unamortized amount of Rs. 1,802,657/- in the “FCMITD Account” has been carried forward to subsequent years for being amortised in accordance with the aforesaid Notification.
2. Estimated amount of contracts remaining to be executed on capital account and not provided for Rs. 15,763,930/- (Prev. year Rs. 10,742,400/-) net of advances.
3. Contingent liabilities not provided for in respect of:
(a) Claims against the Company not acknowledged as debts Rs. 8,785,164/- (Prev. year, net of counter claims, Rs. 3,485,112/-)
(b) Pending Bank Guarantees:
Particulars Current yearRupees
Previous yearRupees
Bank Guarantee 7,885,484 6,275,484
(c) The Company has given Corporate Guarantee of Rs. 84,000,000/- on behalf of its subsidiary Company M/s. Advani Pleasure Cruise Company Private Limited to Bank of Baroda, Mumbai. The Corporate Guarantee is 51% of the sanctioned loan amount of Rs. 164,000,000/-. As on year ending March 31, 2009, the guarantee stands at Rs. 63,805,332/- being 51% of Rs. 125,108,495/- i.e. the loan availed by subsidiary Company.
(d) Demand raised by Income Tax authorities disputed by the Company in appeal and rectification proceedings, which are pending – Rs. 1,065,815/- (Prev. year Rs. 1,065,815/-).
(e) Demand raised by Sales tax and luxury tax authorities, disputed by the Company in appeal, which are pending amounting to Rs. 5,881,182/- (Prev. year Rs. 4,665,536/-).
(f) Certain employees of the Company’s flight catering unit i.e. Airport Plaza, which is sold during the year have demanded higher wages with effect from August 01, 2006. The matter is pending in the Labour Court. Pending disposal of the matter, no provision has been made for the additional wages, as the amount is indeterminate.
4. There are no Micro and Small Enterprises, to whom the Company owes dues, which are outstanding for more than 45 days as at March 31, 2009. This is information as required to be disclosed under “The Micro, Small and Medium Enterprises Development Act, 2006” (the Act) has been determined to the extent such parties have been identified on the basis of information available with the Company.
dvani Hotels & Resorts (India) LimitedAnnual Report 2008 - 2009
40
SCHEDULES FORMING PART OF THE PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2009
SCHEDULE “K” SIGNIFICANT ACCOUNTING POLICIES AND NOTES ON ACCOUNTS- (Contd.)
5. Details of Auditors’ Remuneration:
ParticularsCurrent Year
RupeesPrevious Year
RupeesAudit FeesTax Audit FeesFor Tax mattersFor Certification, opinion etc.For Limited Review CertificationFor ExpensesService Tax
160,00055,00055,00040,00035,00087,16737,080
160,00055,00015,00037,50015,00058,50437,386
6. The Company has deposited unclaimed dividend of Rs. Nil (Previous year Rs. 97,380/- for the year ended March 31, 2000) in the ‘Investor Education and Protection Fund’. The balance unclaimed dividend for subsequent years amounting to Rs. 678,755/- (Previous Year Rs. 320,595/-) will be deposited at the appropriate time as and when applicable.
7. a) Current Assets, Loans and Advances (Schedule “G”) include Rs 635,231/- (Previous year Rs.3,572,056/-) due from the Subsidiary Company, viz. Advani Pleasure Cruise Company Private Limited, which has been considered doubtful and fully provided for.
b) Movement in Provision for Doubtful Debts / Loans & Advances:
Particulars Current YearRupees
Previous YearRupees
Opening balance 1,113,997 1,113,997Addition during the year 27,580,394 NilDeduction during the year Nil NilClosing balance 28,694,391 1,113,997
c) Cash and Bank balances (Schedule “G”) includes Rs. 129,122/- ( Previous year Rs. 129,122/-) with Priyadarshini Mahila Co–op Bank Limited on Current Account. Maximum balance Rs.129,122/- (Previous Year Rs.129,122/-).
d) Miscellaneous Income includes Duty Credit Scrips benefits of Rs.1,310,285/- (Previous year Rs. 9,921,913/-) being on capital account.
8. Since it is not practicable to give quantity wise details in respect of purchase, consumption, turnover, stock, etc., the Department of Company Affairs through its Order No. 46/183/2008–CL–III dated 17th October, 2008 has exempted the Company from giving such details for the year ended March 31, 2008, March 31, 2009 and March 31, 2010 subject to certain disclosures. The required disclosures have been made in Schedules “I” and “J”.
9. Segment Reporting under Accounting Standard 17:
Hotel business is the Company’s only business segment and hence disclosure of segment–wise information is not applicable under Accounting Standard 17 – “Segment Information”.
10. The disclosures required under Accounting Standard 15 “Employee Benefits” notified in the Companies (Accounting Standards) Rules 2006, are given below:
Defi ned Contribution Plan
Contribution to Defined Contribution Plan, recognized are charged off for the year are as under:
Particulars Current YearRupees
Previous YearRupees
Employer’s Contribution to Provident Fund 1,653,805 1,824,756Employer’s Contribution to Pension Scheme 1,400,205 1,366,478
Defi ned Benefi t Plan
In respect of Employees’ Retiring Gratuity, the present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognises each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation. The obligation for leave encashment is recognized on actuarial valuation basis.
dvani Hotels & Resorts (India) Limited
41
SCHEDULES FORMING PART OF THE PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2009
SCHEDULE “K” SIGNIFICANT ACCOUNTING POLICIES AND NOTES ON ACCOUNTS- (Contd.)
S. No. Retiring Gratuity LiabilityCurrent Year
Rupees(Unfunded)
Previous YearRupees
(Unfunded)
I Assumptions:
Discount rate – previous 8.00% 8.00%
Salary Escalation – previous 4.00% 4.00%
Discount rate – Current 8.00% 8.00%
Salary Escalation – Current 4.00% 4.00%
II Change in Benefi t Obligation:
Liability at the beginning of the year 5,411,388 4,616,073
Interest cost 480,168 402,921
Current Service Cost 792,815 663,113
Past Service Cost (Non Vested benefit) — —
Past Service Cost (Vested benefit) — —
Liability Transfer in — —
Liability Transfer out — —
Benefit Paid (404,199) (485,356)
Actuarial (Gain) / Loss on obligations (2,001,115) 214,537
Liability at the end of the year 4,279,057 5,411,288
III Recognition of Transitional Liability: N. A. N. A.
IV Amount recognized in the Balance Sheet:
Liability at the end of the year 4,279,057 5,411,388
Fair value of Plan Assets at the end of the year — —
Difference (4,279,057) (5,411,388)
Unrecognized Past Service Cost — —
Unrecognized Transition Liability — —
Amount recognized in the Balance Sheet (4,279,057) (5,411,388)
V Expenses recognized in the Profi t and Loss Account:
Current Service Cost 792,815 663,113
Interest Cost 480,168 402,921
Expected return on Plan assets — —
Past Service Cost (non–vested benefit) recognized —
Past Service Cost (vested benefit) recognized — —
Recognition of Transition Liability — —
Actuarial Gain or (Loss) (2,001,115) 214,637
Expense recognized in the Profit and Loss Account (728,132) 1,280,671
VI Balance Sheet Reconciliation:
Opening Net Liability 5,411,388 4,616,073
Expenses as above (728,132) 1,280,671
Employer’s Contribution (404,199) (485,356)
Closing Net Liability 4,279,057 5,411,388
dvani Hotels & Resorts (India) LimitedAnnual Report 2008 - 2009
42
SCHEDULES FORMING PART OF THE PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2009
SCHEDULE “K” SIGNIFICANT ACCOUNTING POLICIES AND NOTES ON ACCOUNTS- (Contd.)
Sr.No. Leave Encashment LiabilityCurrent Year
Rupees(Unfunded)
Previous YearRupees
(Unfunded)
I Summary of Assumption:
Retirement age 60 years 60 years
Attrition rate 2.00% 2.00%
Future Salary Rise 4.00% 4.00%
Rate of Discounting 8.00% 8.00%
Mortality Table LIC (1994–96) Ultimate
LIC (1994–96) Ultimate
II Actuarial Value of leave encashment liability 1,083,679 906,308
Other details:
1. Gratuity is payable @ 15 days salary for each year of service subject to a maximum of Rs.350,000/-.
2. Leave is encashable on retirement / while in service/ maximum leave accumulation is a per company’s scheme from time to time.
3. The above information is certified by the actuary.
4. Salary Escalation is considered as advised by the company which in line with the industry practice considering promotion and demand and supply of the employee
5. Number of employees (average) 191 (Previous year 279)
6. Salary per month – Rs. 1,949,253/- (Previous year Rs. 2,368,323/-)
7. Contribution for next year – Rs. Nil (Previous year Rs. Nil)
8. The previous year figures of gratuity liability have been adjusted as per the revised acturial valuation for last year.
11. Related Party Disclosures under Accounting Standard 18:
(a) Subsidiary Company:
(i) Advani Pleasure Cruise Company Private Limited (51%)
The Company has taken a ship on lease / bareboat charter basis from a party and given the same to the above subsidiary for its operation of pleasure cruise and casino on board. The lease rent for the ship and other expenses relating to the business being carried on by the subsidiary, as mentioned in item [f(5)] below, have been recovered / are recoverable from the said subsidiary Company.
(ii) Advani Flight Catering Service Private Limited (100%)
(b) Parties where control exists: None
(c) Key Management Personnel:
Mr. Sunder G. Advani – Chairman & Managing Director
Mr. Haresh G. Advani – Executive Director
Mr. Prahlad S. Advani – Manager – Asset Management and Relative (Son)
(d) Other parties being relatives of Key Management Personnel with whom transactions have taken place during the year:
Mrs. Menaka S. Advani – Director and relative (Wife)
(e) Other related parties with whom transactions have taken place during the year:
Mr. K. Kannan – Non–executive Director
Mr. Prakash V. Mehta – Non–executive Director
Mr. Anil Harish – Non–executive Director
D. M. Harish & Co., Advocates (Partnership firm wherein Mr .Anil Harish is a partner)
Malvi Ranchhoddas & Co. Solicitors & Advocates (Partnership firm wherein Mr. Prakash V. Mehta is a partner)
dvani Hotels & Resorts (India) Limited
43
SCHEDULES FORMING PART OF THE PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2009
SCHEDULE “K” SIGNIFICANT ACCOUNTING POLICIES AND NOTES ON ACCOUNTS- (Contd.)
(f) Summary of transactions during the year with Related Parties and status of outstanding balances as on 31st March, 2009:
Sr. No. Nature of transactions
SubsidiaryRupees
Associates and other related
parties Rupees
Key Management Personnel
Rupees1 Sale of goods and services 2,426,273
12,302,166——
——
2 Purchase of goods and services 1,050,750820,700
——
——
3 Remuneration including Sitting Fees ——
1,000,000840,000
10,589,54212,411,579
4 Consultancy Fees ——
217,963240,450
——
5 Expenses recovered 86,753,10873,130,704
——
902,9891,174,967
6 Interest paid ——
—18,375
—279,971
7 Loans and Advances taken ——
—200,000
—3,400,000
8 Loans and Advances given / (recovered) (2,203,158)942,515
——
——
9 Balance outstanding at the year end:Unsecured Loans taken 1,186,000
1,186,000——
——
Accounts receivable 136,430733,667
——
——
Loans and Advances recoverable 635,2312,838,389
——
——
Creditors / Payables —117,000
——
120,8004,570,130
10 Dividend paid ——
817,92620,500
9,737,786—
11 Dividend received 16,734,36511,092,500
——
——
12 Amount written off / back arising out of debts due ——
——
——
13 Guarantee given on behalf of (Refer to Note 3 (c) Part B of Schedule “K”)
63,805,332—
——
——
(Figures in italics are for previous year)
12. The Company’s significant leasing arrangements for its subsidiary company is in respect of operating leases for the ship and the office premises (Jetty), from where the pleasure cruise business is carried on by the subsidiary company. As per the arrangement, the lease rent of the ship and the Jetty premises is being reimbursed by the subsidiary company to the company.
The Company has also taken certain premises on lease. The aggregate lease rentals payable are charged as rent in the Profit and Loss Account.
Future commitments in respect of minimum lease payments payable for non–cancelable operating leases entered into by the Company including in respect of the ship referred to above:
Particulars Current YearRupees
Previous YearRupees
Payable within one year – 35,871,704 22,520,000Payable later than one year but not later than five years 24,261,897 17,175,000Payable after five years – Nil Nil
dvani Hotels & Resorts (India) LimitedAnnual Report 2008 - 2009
44
SCHEDULES FORMING PART OF THE PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2009
SCHEDULE “K” SIGNIFICANT ACCOUNTING POLICIES AND NOTES ON ACCOUNTS- (Contd.)
13. Earnings per share (E.P.S.) under Accounting Standard 20:
Particulars Current Year Previous Year
Profit after tax and adjustments as per Accounts Rs. 514,713 Rs. 63,807,377
No. of Shares outstanding 46,219,250 46,219,250
Nominal face value of share Rs. 2/- Rs. 2/-
Basic and Diluted E.P.S. (Rupees per share) 0.01 1.38
14. Components of Deferred Tax Assets and Liabilities are as under:
Particulars Current YearRupees
Previous YearRupees
Deferred tax liabilities on account of:
Difference between the written down value of assets under the Companies Act, 1956 and the Income Tax Act, 1961. 66,678,003 66,761,187
TOTAL (A) 66,678,003 66,761,187
Deferred tax assets on account of:
Expenses allowable for tax purpose on payment basis 1,532,914 1,461,592
Provision for doubtful debt / loans & advances 9,753,224 378,648
Provision for diminution in value of investment 5,027,121 —
TOTAL (B) 16,313,259 1,840,240
Deferred Tax Liability – Net (A – B) 50,364,744 64,920,947
Deferred Tax Debit / (Credit) for the year (14,556,203) 5,298,726
15. Additional information pursuant to the provisions of paragraphs 3 & 4 of Part – II and Part – IV of Schedule VI to the Companies Act, 1956 are given as under to the extent applicable:
(i) Managerial Remuneration:
Paid to Chairman and Managing Director: Current YearRupees
Previous YearRupees
Salary 3,000,000 2,098,000
House Rent Allowance 1,800,000 1,258,800
Commission — 20,00,000
Other Perquisites 445,754 336,000
SUB TOTAL (A) 5,245,754 5,692,800
Paid to Executive Director:
Salary 1,872,000 1,311,000
House Rent Allowance 1,123,200 786,600
Company’s contribution to Provident Fund — 126,000
Commission — 21,00,000
Other Perquisites 312,784 210,000
SUB TOTAL (B) 3,307,984 4,533,600
TOTAL (A+B) 8,553,738 10,226,400
dvani Hotels & Resorts (India) Limited
45
SCHEDULES FORMING PART OF THE PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2009
SCHEDULE “K” SIGNIFICANT ACCOUNTING POLICIES AND NOTES ON ACCOUNTS- (Contd.)
Notes:
(a) The above Managerial Remuneration has been paid / provided in accordance with the (i) resolutions approved by the shareholders of the Company in the Annual General Meeting held on 26th September, 2007, (ii) Central Government Approvals vide letters dated 27th March, 2009.
(b) The above remuneration excludes provision for gratuity and leave availment since it is provided on an actuarial valuation of the Company’s liability to all its employees.
(c) Computation of Net Profit under Section 198 (1) read with Section 349 of the Companies Act for the year ended 31st March, 2009
Particulars Current YearRupees
Current YearRupees
Previous YearRupees
Profit before taxation (5,183,490) 103,372,060
Add:
Managerial Remuneration 8,553,738 10,226,400
Depreciation charged to accounts 25,086,088 26,065,313
Directors Sitting Fees 1,000,000 840,000
Loss on sale of assets 2,187,818 8,340,436
Provision for doubtful 1,945,163 —
Provision for doubtful recovery of advances 25,635,231 —
Provision for diminution in value of investment 22,185,000 —
Provision for incomplete Hotel Project, considered doubtful 11,958,615 —
98,551,653 45,472,149
93,368,163 148,844,209
Less: Depreciation under Section 350 of the Companies Act, 1956 25,086,088 26,065,313
Profit for the purpose of Commission payable to Managing Director and Executive Director 68,282,075 122,778,896
Note: Commission is payable to the Managing Director and Executive Director as may be decided by the Board of Directors of the Company, however, that such commission alongwith other remuneration and perquisites shall not exceed 5% and 4% of the net profit of the Company as worked out above to the Managing Director and Executive Director respectively. Commission payable to the Managing Director and Executive Director for the year is Nil (Prev. Year Rs. 2,000,000/- and Rs. 2,100,000/- respectively).
(ii) Earnings in Foreign Exchange:
Current YearRupees
Previous YearRupees
Hotel and flight kitchen earnings (including encashment) as certified and reported by the Company to the Department of Tourism and relied upon the Auditors
154,289,333 325,519,950
(iii) Expenditure in foreign Currency on account of:
Current YearRupees
Previous YearRupees
(a) Royalty (actual payment during the year Rs. 5,122,507/-) 5,704,227 6,604,271
(b) Professional & Consultation Fees 216,950 3,418,955
(c) Interest and other charges (actual payment dur ing the year Rs. 10,194,555/-)
9,262,779 7,069,211
(d) Other matters 274,508 5,745,027
dvani Hotels & Resorts (India) LimitedAnnual Report 2008 - 2009
46
SCHEDULES FORMING PART OF THE PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2009
SCHEDULE “K” SIGNIFICANT ACCOUNTING POLICIES AND NOTES ON ACCOUNTS- (Contd.)
(iv) Non–resident Shareholders etc.
Current Year Previous Year
(a) Number of Non–Resident Shareholders 39 43
(b) Year to which the dividend related 2007–08 2006–07
(c) Number of equity shares held 421,522 609,130
(d) Amount of Dividend (Rupees) 2,675,548 609,130
(v) C.I.F. Value of Imports: (on payment basis)
Particulars Current YearRupees
Previous YearRupees
Capital goods 7,650,496 27,839,837
Stores, Spares and Supplies 1,084,763 698,618
Provision, Wines, etc. 384,946 517,334
16. The Company has sold its Flight Kitchen Business Undertaking known as “Airport Plaza” alongwith land, building and other assets for a gross consideration of Rs. 203,000,000/- in terms of Business Transfer Agreement dated June 06, 2008. The sale was approved by the Shareholders of the Company vide resolution passed by way of postal ballot on January 30, 2008. The profit of Rs. 95,941,283/- being capital gain i.e. excess of realisation over cost of assets and goodwill of the business (tax of Rs. 13,600,000/- thereon) has been carried to Capital Reserve (refer Schedule ‘B’) and the remaining profit of Rs. 37,544,603/- has been included in Exceptional Income in Schedule “J–1”.
In view of the sale of the undertaking as above, the figures of the current year are strictly not comparable with figures of previous year.
17. Subsequent to the close of the accounting year, the casino business which is being carried on by the Company’s subsidiary i.e. Advani Pleasure Cruise Company Private Limited was suspended with effect from June 12, 2009 due to emergence of various adverse factors during 2008–09. These factors and suspension of business resulted into the subsidiary incurring operating losses during the year ended March 31, 2009 as well as after the close of the year. The Company holds 51% shares in the above subsidiary (refer “Schedule F”) and also advanced amount / incurred expenses in relation to the casino business of the subsidiary company aggregating to Rs. 25,635,231/- upto March 31, 2009, which has been included under Loans and Advances (Schedule “G”). Company’s efforts to dispose of the investment in subsidiary yielded no positive results so far. In view of above developments, there may be a decline in the value of investments held and the amounts recoverable from the subsidiary may be doubtful of recovery. Accordingly, the Company has made a provision of Rs. 22,185,000/- (Previous year Rs. Nil) towards diminution in the value of investments and Rs. 25,635,231/- (Previous Year Rs. Nil) towards doubtful loans and advances as approved by the Board of Directors in their meeting held on August 13, 2009.
18. Previous year’s figures have been recast / regrouped / rearranged, wherever necessary for comparison sake.
19. Balance Sheet Abstract and Company’s General Business Profi le:
(a) Registration Details:
Registration No : 42891 State Code : 011
Date of Balance Sheet 31st March, 2009
(b) Capital raised during the year: Rupees in thousands
Public Fresh Issue Nil
Rights Issue Nil
Bonus Issue Nil
Private placements Nil
(c) Position of Mobilization and deployment
Total Liabilities 466,358
Total Assets 466,358
dvani Hotels & Resorts (India) Limited
47
SCHEDULES FORMING PART OF THE PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2009
SCHEDULE “K” SIGNIFICANT ACCOUNTING POLICIES AND NOTES ON ACCOUNTS- (Contd.)
Sources of Funds:
Paid up Capital 92,439
Reserves and Surplus 198,137
Secured loans 112,837
Unsecured loans 12,581
Deferred Tax Liability 50,364
Application Funds:
Net Fixed Assets 446,411
Investments 100
Foreign Currency Monetary Item Translation
Difference 1,803
Net Current Assets 18,044
Miscellaneous Expenditure —
Accumulated Loss —
(d) Performance of Company:
Turnover / Other Income 336,716
Total Expenditure 341,899
Profit / (Loss) before Tax (5,183)
Profit after Tax and adjustments 515
Earning per share (year end): Rupees 0.01
Dividend rate (%) 0.00%
(e) Generic Names of three Principal
Products of Company
The Company is in the business of hoteliering and catering, which is not covered under ITC Classification.
Signature on the Schedules “A” to “K”. For and on behalf of the Board
SUNDER G. ADVANI Chairman & Managing Director
HARESH G. ADVANI Executive Director
Mumbai: August 13, 2009 KUMAR IYER Company Secretary
SHANKAR G. KULKARNIGeneral Manager – Finance (CFO)
dvani Hotels & Resorts (India) LimitedAnnual Report 2008 - 2009
48
STATEMENT PURSUANT TO SECTION 212 OF THE COMPANIES ACT, 1956 RELATING TO SUBSIDIARY COMPANIES
1. Name of the Subsidiary Company Advani Pleasure Cruise Company Pvt. Ltd.
Advani Flight Catering Services Private Limited
2. Financial year of the Subsidiary ended on March 31, 2009 March 31, 2009
3. Shares of the Subsidiary held by the Holding Company on the above dates.
(a) Number and face value 2,218,500 Equity Shares of Rs. 10/- each
10,000 Equity Shares of Rs. 10/- each
(b) Extent of holding 51% 100%
4. The net aggregate amount of Profit / (Loss) of the Subsidiary for the above financial year, so far as they concern the Members of the Company.
(a) Dealt with in the accounts of the Company for the year ended March 31, 2009.
Nil Nil
(b) Not dealt with in the accounts of the Company for the year ended March 31, 2009.
(Rs. 4,332,029/-) (Rs. 5,572/-)
5. The net aggregate of Profit / (Loss) of the Subsidiary for the previous financial year, since it became a subsidiary, so far as they concern the Members of the Company.
(a) Dealt with in the accounts of the Company for the year ended March 31, 2009.
Rs. 27,731,250/- Nil
(b) Not dealt with in the accounts of the Company for the year ended March 31, 2009.
Rs. 15,938,457/- (Rs. 28,910/-)
Note: There are no business operations till March 31, 2009 in Advani Flight Catering Services Private Limited.
Signature on the Schedules “A” to “K”. For and on behalf of the Board
SUNDER G. ADVANI Chairman & Managing Director
HARESH G. ADVANI Executive Director
Mumbai: August 13, 2009KUMAR IYER
Company Secretary SHANKAR G. KULKARNI
General Manager – Finance (CFO)
dvani Hotels & Resorts (India) Limited
49
AUDITORS’ REPORT ON CONSOLIDATED FINANCIAL STATEMENTS OF ADVANI HOTELS & RESORTS (INDIA) LIMITED AND ITS SUBSIDIARY COMPANIES
To The Board of DirectorsAdvani Hotels & Resorts India Limited
We have examined the attached Consolidated Balance Sheet of ADVANI HOTELS & RESORTS (INDIA) LIMITED and its subsidiaries, viz. (1) Advani Pleasure Cruise Company Private Limited and (2) Advani Flight Catering Services Private Limited as at 31st March, 2009 and also the Consolidated Profit and Loss Account and the Consolidated Cash Flow Statement of the Company for the year ended on that date, both annexed thereto. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these Consolidated Financial Statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
We report that the Consolidated Financial Statements have been prepared by the Company in accordance with the requirements of applicable provisions of Accounting Standard 21 “Consolidated Financial Statements” notified by the Companies (Accounting Standards) Rules, 2006 and on the basis of the separate audited financial statements of the Company and its subsidiaries included in the Consolidated Financial Statements.
On the basis of the information and the explanations given to us and on consideration of separate audit reports on individual financial statements of the Company and its subsidiaries, in our opinion, the Consolidated Financial Statements give a true and fair view in conformity with the accounting principles generally accepted in India:
(i) in the case of Consolidated the Balance Sheet, of the state of the affairs of the Company and its subsidiaries as at 31st March, 2009;
(ii) in the case of the Consolidated Profit and Loss Account, of the loss of the Company and its subsidiaries for the year ended on that date; and
(iii) in the case of the Consolidated Cash Flow Statement, of the Cash Flows of the Company and its subsidiaries for the year ended on that date.
For J.G. VERMA & CO.Chartered Accountants
J.G. VERMAPartner
Mumbai, August 13, 2009 Membership No. 5005
dvani Hotels & Resorts (India) LimitedAnnual Report 2008 - 2009
50
CONSOLIDATED BALANCE SHEET AS AT 31ST MARCH, 2009
Schedule Rupees Rupees Previous Year
Rupees SOURCES OF FUNDS:SHAREHOLDERS’ FUNDS:
Share Capital .................................................. `A’ 92,438,500 92,438,500 Reserves and Surplus..................................... `B’ 251,166,026 192,334,652
343,604,526 284,773,152 LOAN FUNDS:
Secured Loans ................................................ `C’ 238,719,710 208,778,580 Unsecured Loans ............................................ `D’ 16,584,054 11,160,092
255,303,764 219,938,672 DEFERRED TAX LIABILITY (Net) ..................... 54,453,214 65,585,507
MINORITY INTEREST ......................................... 93,568,487 113,716,882 TOTAL 746,929,991 684,014,213
APPLICATION OF FUNDS: FIXED ASSETS: `E’
Gross Block (At cost) ...................................... 772,475,935 861,527,557 Less: Depreciation ........................................... 271,927,959 306,021,933 Net Block ......................................................... 500,547,976 555,505,624 Capital Work in Progress ................................ 192,458,527 35,317,430
693,006,503 590,823,054 INVESTMENTS: ................................................... `F’ — 100,500 FOREIGN CURRENCY MONETARY ITEMS TRANSLATION DIFFERENCE: .......................... 1,802,657 — (Refer Note 1 of Part B of Schedule “K”) CURRENT ASSETS, LOANS AND ADVANCES: `G’
Interest accrued .............................................. 1,037 17,641 Stock ................................................................ 18,378,536 22,206,476 Sundry Debtors ............................................... 19,897,843 50,889,078 Cash and Bank Balances ............................... 24,156,105 107,112,580 Loans and Advances....................................... 266,135,602 212,128,765
328,569,123 392,354,540 L E S S : C U R R E N T L I A B I L I T I E S A N D PROVISIONS:
`H’
Current Liabilities ............................................ 93,035,672 128,052,020 Provisions ........................................................ 187,087,419 176,724,060
280,123,091 304,776,080 NET CURRENT ASSETS: ................................... 48,446,032 87,578,460 MISCELLANEOUS EXPENDITURE: .................. `I’ 3,674,799 5,512,199
TOTAL 746,929,991 684,014,213 SIGNIFICANT ACCOUNTING POLICIES AND NOTES ON ACCOUNTS ..................................... `L’
As per our report of even date FOR J.G.VERMA & CO. Chartered Accountants
Signature on the above Balance Sheet and Schedules “A” to “I” and “L”. For and on behalf of the Board
SUNDER G. ADVANI Chairman & Managing Director
HARESH G. ADVANI Executive Director
J. G. VERMAPartner
Mumbai: August 13, 2009KUMAR IYER
Company Secretary SHANKAR G. KULKARNI
General Manager – Finance (CFO)
dvani Hotels & Resorts (India) Limited
51
CONSOLIDATED PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2009
Schedule Rupees Rupees Previous Year
Rupees INCOME:
Rooms, Restaurant, Bar, Banquets, Flight Catering, Casino and Other Income `J’
549,618,397 796,419,327
EXPENDITURE:Operating and General Expenses ................................. `K’ 502,021,405 516,935,032 Managerial Remuneration .............................................. 8,553,738 10,226,400 Depreciation ................................................................... 31,695,922 32,872,903 Interest: (a) On Fixed Loans ........................................................ 14,354,585 22,354,785 (b) On Other Loans ........................................................ 2,336,356 5,791,456
16,690,941 28,146,241 558,962,006 588,180,576
LOSS / PROFIT BEFORE EXCEPTIONAL ITEMS:......... (9,343,609) 208,238,751 Less: Exceptional items (net) ......................................... `K-1' 585,988 — LOSS / PROFIT BEFORE TAXATION: ............................ (8,757,621) 208,238,751
Less: Provision for taxation Current tax ........................................................... 7,700,000 72,500,000 Fringe Benefits tax ............................................... 1,598,000 1,580,000 MAT Credit Entitlement ........................................ (441,251) — Deferred tax Liability/(Asset) ................................ (11,132,293) 1,874,074
(2,275,544) 75,954,074 (LOSS) / PROFIT FOR THE YEAR BEFORE ADJUSTMENTS: (6,482,077) 132,284,677 Add / Less : Prior Periods adjustments (net) .................... 564,511 665,957 (LOSS) / PROFIT AFTER TAX & ADJUSTMENTS: ........ (7,046,588) 131,618,720 Less: Minority Interest ........................................................ (4,162,145) 33,238,994 (LOSS) / PROFIT AFTER MINORITY INTEREST: .......... (2,884,443) 98,379,726 Add / Less : Profit / (Loss) brought forward ...................... 50,786,634 (4,802,850)Less : Adjustment on adoption of AS11 Notification ......... 8,690,847 —
42,095,787 (4,802,850)PROFIT AVAILABLE FOR APPROPRIATION: ............... 39,211,344 93,576,876 Less: Appropriation madeTax on Interim Dividend for 2007–08 ................................. 3,696,413 19,744,514 (Previous year Interim Dividend and tax thereon)Tax on Proposed Dividend for 2007–08 ............................ 1,848,206 9,872,260 (Previous year Proposed Dividend and tax thereon)Transfer to General Reserve 20,000,000 13,173,468
25,544,619 42,790,242 Balance Profit carried to Balance Sheet ........................... 13,666,725 50,786,634 Basic and Diluted Earnings Per Share (In Rs.) ................. (0.06) 2.13 Face value Rs. 2/- per share (Refer Note 6 Schedule "L")SIGNIFICANT ACCOUNTING POLICIES & NOTES ON ACCOUNTS `L' As per our report of even date FOR J.G.VERMA & CO. Chartered Accountants
Signature on the above Balance Sheet and Schedules “J” to “K-1” and “L” For and on behalf of the Board
SUNDER G. ADVANI Chairman & Managing Director
HARESH G. ADVANI Executive Director
J. G. VERMAPartner
Mumbai: August 13, 2009KUMAR IYER
Company Secretary SHANKAR G. KULKARNI
General Manager – Finance (CFO)
dvani Hotels & Resorts (India) LimitedAnnual Report 2008 - 2009
52
CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2009CASH FLOW STATEMENT FOR THE YEAR ENDED 31st March, 2009
Rupees31st March, 2008
RupeesA. CASH FLOW FROM OPERATING ACTIVITIES:
Net Profit before tax and adjustments ........................................................................... (8,757,621) 208,238,751 Adjustments for:-
Depreciation (Previous Year - Net of excess provision written back) ...................... 31,695,922 28,606,465 Loss on sale of assets ............................................................................................. 3,884,712 8,340,436 Notional Foreign Exchange Rate difference ............................................................ 1,718,277 (15,478,826)Duty Free Entitlement .............................................................................................. (1,310,285) (10,337,260)Provision of Doubtful Hotel Project Advances ......................................................... 11,958,615 —Profit on Sale of Flight Kitchen ................................................................................ (37,544,603) —Provision for Loans and Advances .......................................................................... 25,000,000 —Provision for Employees Benefits (Net) ................................................................... (2,280,851) 2,684,887Provision for Doubtful Debts .................................................................................... 1,945,163 200,000 Amortisation of Expenses ........................................................................................ 1,837,400 1,837,400 Interest and Dividend Income .................................................................................. (2,496,746) (4,070,745)Interest Expenses .................................................................................................... 16,690,941 28,146,241 Amortisation of Foreign Exchange Loss .................................................................. 901,328 —
Operating profi t before working capital changes: ................................................... 43,242,252 248,167,349 Adjustments for:-
Trade & other receivable .......................................................................................... 29,046,072 (8,161,266)Loans, Advances and deposits ................................................................................ (21,849,995) (31,205,835)Inventories ................................................................................................................ 3,827,940 (200,376)Trade payable ........................................................................................................... (15,395,232) 17,033,057
Cash generated from operations: .............................................................................. 38,871,037 225,632,929 Direct Taxes paid (Net of refund received) .............................................................. (57,097,121) (58,131,797)
Cash Flow before Extraordinary Items: (18,226,084) 167,501,132Extraordinary Items of expenses ............................................................................. (564,511) (196,127)
Net cash used in Operating Activities: ..................................................................... (18,790,595) 167,305,005B. CASH FLOW FROM INVESTMENT ACTIVITIES:
Purchase of Fixed Assets: ............................................................................................. (206,616,629) (107,884,115)(including Capital Work-in-progress)Sale Proceed of Flight Kitchen Unit .............................................................................. 197,785,026 —Disposal of Investment ................................................................................................... 100,500 100,000Sale of Fixed Assets ...................................................................................................... 1,170,384 1,420,667 Interest Received ........................................................................................................... 2,513,350 4,070,745 Net Cash used in Investing Activities ....................................................................... (5,047,369) (102,292,703)
C. CASH FLOW FROM FINANCING ACTIVITIES: ................................................................Proceeds from Borrowings:
Term Loans .............................................................................................................. 128,702,441 65,474,332 Unsecured Loans ..................................................................................................... 6,969,932 5,134,424 Cash Credits ............................................................................................................ — 1,724,915
Repayment of : Term Loans .............................................................................................................. (104,935,749) (81,182,665)Cash Credit .............................................................................................................. (18,875,702) (5,307,529)Unsecured Loans ..................................................................................................... (2,642,402) —
Interest Paid (17,547,548) (28,146,241)Dividend including dividend tax paid ............................................................................. (50,789,483) (15,353,874)Net Cash used in Financing Activities ............................................................................ (59,118,511) (57,656,638)
NET INCREASE/(DECREASE) IN CASH & CASH EQUIVALENTS (A+B+C) ................. (82,956,475) 7,355,664 CASH & CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR (Opening Balance) ............................................................................................................... 107,112,580 99,756,916 CASH & CASH EQUIVALENTS AT THE CLOSING OF THE YEAR (Closing Balance) 24,156,105 107,112,580
As per our report of even date FOR J.G.VERMA & CO. Chartered Accountants
Signature on the Consolidated Cash Flow Statement For and on behalf of the Board
SUNDER G. ADVANI Chairman & Managing Director
HARESH G. ADVANI Executive Director
J. G. VERMAPartner
Mumbai: August 13, 2009KUMAR IYER
Company Secretary SHANKAR G. KULKARNI
General Manager – Finance (CFO)
dvani Hotels & Resorts (India) Limited
53
SCHEDULES FORMING PART OF THE CONSOLIDATED BALANCE SHEET AS AT 31ST MARCH, 2009
Rupees RupeesPrevious Year
RupeesSCHEDULE “A” : SHARE CAPITAL:AUTHORISED:99,750,000 Equity Shares of Rs. 2/- each ....................................... 199,500,000 199,500,000
5,050,000 Preference Shares of Rs.10/- each ................................. 50,500,000 50,500,000TOTAL 250,000,000 250,000,000
ISSUED, SUBSCRIBED AND PAID UP:46,219,250 Equity Shares of Rs. 2/- each, fully paid up.................. 92,438,500 92,438,500
TOTAL 92,438,500 92,438,500
SCHEDULE “B” : RESERVES AND SURPLUS:CAPITAL RESERVE:As per last accounts:Subsidy received under the Central InvestmentSubsidy Scheme of the Government of Goa ...................................... 2,500,000 2,500,000Share Premium Account ...................................................................... 57,960,550 57,960,550 Profit on re–issue of forfeited shares ................................................... 14,000 14,000
60,474,550 60,474,550 Surplus being capital gain on sale of flight catering unit during the year (net of income tax of Rs. 13,600,000/-{Prev. Year Nil}) ....................... 82,341,283 —
(Refer Note 11 of Part B of Schedule “L”) ........................................... 142,815,833 60,474,550 CAPITAL REDEMPTION RESERVE:As per last accounts: ............................................................................ 53,500,000 53,500,000 CONTIGENCY RESERVE
As per last accounts: .......................................................................... 3,000,000 3,000,000GENERAL RESERVE:As per last accounts: ............................................................................ 24,573,468 24,573,468 Less: Adjustment on adoption of AS–11 Notification .......................... 6,390,000 —
(Refer Note 1 of Part B of Schedule “L”) ............................................. 18,183,468 24,573,468 Add: Set aside this year ....................................................................... 20,000,000 —
38,183,468 24,573,468 SURPLUS IN PROFIT AND LOSS ACCOUNT .................................. 13,666,725 50,786,634
TOTAL 251,166,026 192,334,652
SCHEDULE “C” : SECURED LOANS:FROM BANKS: 1. Term Loan (By way of ECB) (Note 1) ............................................... 40,760,000 40,377,000 2. Additional Term Loan (Note 1 and 5)) .............................................. — 5,154,006 3. New Term Loan for renovation (Note 1 and 5) ................................. — 24,607,740 4. New Foreign Currency Term Loan for renovation (Note 1) .............. 41,776,867 42,641,650 5. Rupee Term Loan for renovation ( Note 2 and 5) ............................ — 39,654,453
6. Medium Term Loans (Note 2 and 5)................................................. 201 153
7. Foreign Currency Term Loan (Note 3) .............................................. 16,725,912 22,518,485 8. Cash Credits (Note 4) ....................................................................... 13,573,935 32,449,637
9. Term Loan from Bank (Note 6) ......................................................... 125,108,495 —
10. Vehicle Loan from a Bank (Note 7) ................................................ 774,300 1,375,456 TOTAL 238,719,710 208,778,580
dvani Hotels & Resorts (India) LimitedAnnual Report 2008 - 2009
54
NOTES:
1. Loans under items No. (1) to (4) from Bank of Baroda are secured by (i) a mortgage executed in favour of Bank of Baroda by deposit of title deeds of all the immovable properties of the Company situated at Village Varca, Salcette, Goa and at Airport Plaza, Airport Road, Sancoale, Dabolim, Goa, both present and future, (ii) a pari passu charge by way of hypothecation of all the movables (except book debts) including machinery, spares, tools and accessories, present and future (subject to the charges created in favour of the Company’s Bankers on its stocks of raw material, consumable stores, etc. for working capital borrowings) and (iii) personal guarantees of the Managing Director and Executive Director. The balance in Loan Account under item No. (1) and (4) is after adjustment of foreign exchange loss of Rs.20,245,354/- (Prev. year gain of Rs. 12,980,046/-) arose during the year.
2. Loans under item No. (5) and (6) from Bank of India is secured by way of second charge on immovable properties of the Company situated at Village Varca, Salcette, Goa and at Airport Plaza, Airport Road, Sancoale, Dabolim, Goa, both present and future and a second charge on all the movable assets of the Company including machinery, spares, tools and accessories, present and future and by way of personal guarantees of the Managing Director and Executive Director.
3. Loan under item No. (7) from Bank of India is secured by first charge on the moveable and immovable properties of the Company referred to in (1) above on a pari passu basis along with referred to therein. The balance in above Loan Account is after adjustment of foreign exchange loss of Rs. 4,804,786/- (Prev. year gain of Rs. 2,100,800/-) arose during the year.
4. Cash Credits from Bank of Baroda an Bank of India under item No. (8) are secured by hypothecation of Company’s inventories of stocks, stores and provisions, goods in transit and other moveable items and book debts, both present and future.
5. Loans under items No. (2), (3), and (5) have been repaid during the year.
6. Loan under item No. (9) is secured by equitable mortgage of free hold land at Goa, hypothecation of the ship M. V. Majesty, stocks, debts and machinery and Corporate Guarantee of Advani Hotels & Resorts (India) Limited to the extent of 51%. (Amount payable within one year is NIL. (Previous Year Rs. Nil).
7. Loan under item No. (10) is secured by hypothecation of certain vehicles.
Rupees Previous YearRupees
SCHEDULE “D” : UNSECURED LOANS:Vehicle Loans .......................................................................................................... 9,729,804 4,409,755From erstwhile Collaborators .................................................................................. 14,840 14,840Security Deposit from Subsidiary Company ........................................................... 1,650,000 1,700,000 Amount received from the shareholders ................................................................. 5,189,410 5,035,497
TOTAL 16,584,054 11,160,092 SCHEDULE “E” : FIXED ASSETS:
GROSS BLOCK (AT COST) DEPRECIATION NET BLOCK
Description As at1.4.2008
Additions(Note 2)
Deductions As at31.3.2009
Upto31.3.2008
For theyear
Less: Sales/Adjustments
(Note 3)
As at31.3.2009
As at31.3.2009
As at31.3.2008
1 Land (Free hold) 40,772,398 55,696 8,255,973 32,572,121 — — — — 32,572,121 40,772,398
(Including landscaping)
2 Capital Expenditure on the Casino Project 22,038,063 — — 22,038,063 7,542,396 1,101,903 — 8,644,299 13,393,764 14,495,667
3 Buildings 419,149,747 8,575,646 47,751,143 379,974,250 99,853,706 9,861,019 11,184,813 98,529,912 281,444,338 319,296,041
4 Improvement to Leased Building 1,203,550 — — 1,203,550 135,085 19,618 — 154,703 1,048,847 1,068,465
5 Plant & Machinery 176,517,038 11,533,907 42,187,188 145,863,757 75,376,425 7,821,726 24,788,516 58,409,635 87,454,122 101,140,613
6 Fu r n i t u re , F i x tu res , Of f ice Equipment & Decorations 168,598,798 10,175,105 16,087,260 162,686,643 105,048,121 10,472,908 14,419,628 101,101,401 61,585,242 63,550,677
7 Vehicles & Motor Boats 30,783,050 14,679,090 19,657,526 25,804,614 17,592,546 2,041,093 15,303,975 4,329,664 21,474,950 13,190,504
8 In tang ib le Asse t — Computer Software 2,464,913 355,959 487,935 2,332,937 473,654 377,655 92,964 758,345 1,574,592 1,991,259
TOTAL 861,527,557 45,375,403 134,427,025 772,475,935 306,021,933 31,695,922 65,789,896 271,927,959 500,547,976 555,505,624
PREVIOUS YEAR TOTAL 798,646,337 113,232,687 50,351,467 861,527,557 318,005,833 32,872,903 44,856,803 306,021,933 555,505,624
9 Capital Work in Progress [See Note (1) below] 192,458,527 35,317,430
NOTES:1 Capital Work in Progress includes: (a) Advances of Rs. 7,253,400/- (Prev. Year Rs. 7,253,400) and Pre–Operative Expenses of Rs. 4,705,215/- (Prev. Year
Rs. 4,817,715/- paid and incurred on proposed Jaipur Hotel Project, which is considered doubtful. These amounts are net of
dvani Hotels & Resorts (India) Limited
55
Provision of Rs. 11,958,615/- made for such doubtful project. (b) Pre–Operative Expenses include : Payments of Legal and Consultants’ Fees – Rs. 1,667,135/- (Prev. Year Rs. 2,336,760/-);
Travelling & Conveyance of Rs. 986,271/- (Prev. Year Rs. 986,271/-) and Security and other Expenses of Rs. 2,051,809/- (Prev. Year Rs. 1,469,877/-).
(c) Expenses and advances of Rs. 1,785,841/- (Prev. year Rs. 16,936,116/-) incurred on renovation/refurbishing of the hotel, pending completion of the work and allocation.
(d) Expenses and advances of Rs.190,672,686/- (Prev. year Rs. 6,022,320/-) incurred on purchase of ship, feeder boats etc, pending completion of the work and allocation.
2 Additions to Fixed Assets include Rs. 7,265,307/- (Prev. Year Rs. Nil) being loss due to fluctuation in foreign currency rates capitalised in accordance with AS–11 Notification (Refer Note 1 of Part B of Schedule “L”)
3 Adjustment from Depreciation include excess provision made in earlier years of Rs. Nil (Prev. Year 4,266,439/-), which has been written back during the year.
Rupees RupeesPrevious Year
RupeesSCHEDULE “F” : INVESTMENTS: (Long Term)Other : (At cost) Priyadarshini Mahila Co–Op Bank Ltd. 10,050 Shares of Rs. 10 each (Unquoted) ......................................... — 100,500
TOTAL — 100,500 Note: Aggregate of unquoted investments – Cost .............................. — 100,500
SCHEDULE “G” : CURRENT ASSETS, LOANS AND ADVANCES:CURRENT ASSETS:Interest accrued .................................................................................. 1,037 17,641Stock:Stores and Operating Supplies ............................................................. 16,165,053 18,222,939Food and Beverage ............................................................................... 2,213,483 3,983,537
18,378,536 22,206,476Sundry Debtors: (Unsecured, good unless otherwise stated) Over six months (Rs.3,259,160/- Considered doubtful (Prev. Year Rs. 1,313,997/-) ........................................................... 4,015,171 3,115,019 Others ........................................................................................... 19,141,832 49,088,056
23,157,003 52,203,075Less: Provision for doubtful debts ......................................................... 3,259,160 1,313,997
19,897,843 50,889,078Cash & Bank Balances:Cash on Hand ...................................................................................... 7,058,765 11,815,533Balance with Scheduled Banks on: Current Accounts ......................................................................... 14,716,547 40,641,183 Margin / Deposit Account ............................................................ 2,251,671 54,526,742Balances with Other Bank ................................................................... 129,122 129,122
24,156,105 107,112,580LOANS & ADVANCES:(Unsecured, good unless otherwise stated)Advances recoverable in cash or in kind or for value to be received 72,106,177 57,082,790Rs. 25,000,000/- considered doubtful (Prev. Year Nil)Less: Provision for doubtful loans and advances .............................. 25,000,000 —
47,106,177 57,082,790Deposits.............................................................................................. 18,504,609 11,678,001Payments of taxes .............................................................................. 200,524,816 143,367,974
266,135,602 212,128,765TOTAL 328,569,123 392,354,540
dvani Hotels & Resorts (India) LimitedAnnual Report 2008 - 2009
56
SCHEDULES FORMING PART OF THE CONSOLIDATED BALANCE SHEET AS AT 31ST MARCH, 2009
Rupees Rupees
Previous Year
Rupees
SCHEDULE “H” : CURRENT LIABILITIES AND PROVISIONS:
CURRENT LIABILITIES:
Sundry Creditors ............................................................................. 52,530,251 82,017,583
(Include Nil due to directors) (Prev. Year Rs. 4,974,290/-)
Interest accrued but not due on loans ............................................ 212,417 1,069,024
Interim Dividend payable ................................................................. — 18,487,700
Dividend Distribution Tax payable ................................................... — 1,256,814
Dividend Warrants issued but not encashed .................................. 678,755 320,595
Other Liabilities ............................................................................... 39,614,249 24,900,304
93,035,672 128,052,020
PROVISIONS:
Provision for taxation
As per last accounts: ....................................................................... 157,873,607 83,323,777
Add: Addition during the year ......................................................... 22,516,470 74,549,830
180,390,077 157,873,607
Less: Deduction during the year ..................................................... — —
180,390,077 157,873,607
Provision for employee benefits
As per last accounts: ....................................................................... 8,978,193 6,293,306
Add: Addition during the year ......................................................... 177,371 2,684,887
9,155,564 8,978,193
Less: Deduction during the year ..................................................... 2,458,222 —
6,697,342 8,978,193
Proposed Dividend .......................................................................... — 9,243,850
Dividend Distribution Tax ................................................................. — 628,410
— 9,872,260
187,087,419 176,724,060
TOTAL 280,123,091 304,776,080
SCHEDULE “I” : MISCELLANEOUS EXPENDITURE:
(To the extent not written off)
Preliminary Expenses ..................................................................... 8,720 13,080
Pre-operative Expenses .................................................................. 3,666,079 5,499,119
TOTAL 3,674,799 5,512,199
dvani Hotels & Resorts (India) Limited
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SCHEDULES FORMING PART OF THE CONSOLIDATED PROFIT AND LOSS ACCOUNT AS AT 31ST MARCH, 2009
Rupees RupeesPrevious Year
Rupees
SCHEDULE “J” : ROOMS, RESTAURANTS, BAR, BANQUETS, FLIGHT CATERING, CASINO AND OTHER INCOME:
1. (a) Rooms, Restaurants, Banquets, Flight Catering, Casino and Other Services (Gross)[Include sale of food, beverages, etc. Rs. 72,146,383/-)(Prev. Year Rs. 151,611,695)](Tax deducted at source Rs. 1,033,232/-) (Prev.Year Rs. 2,058,787) ....
288,234,407 396,462,366
(b) Income from Casino operations ................................................... 201,495,984 293,792,196
(c) Wines and liquor .......................................................................... 14,832,012 23,939,782
(d) Telephone ..................................................................................... 245,451 387,839
504,807,854 714,582,183
2. Other Income:
Exchange Gain (net) .............................................................................. 7,045,275 25,905,525
[Incl. Gain of Rs. Nil for Foreign Currency Loans (Prev. Year Rs. 15,080,846/-)]
Recoveries towards provision of food & beverage ................................ 27,451,717 32,152,639
Interest (Gross) ...................................................................................... 2,496,746 4,070,745
(Tax deducted at source Rs. 139,344/-) (Prev. Year Rs. 782,902/-)
Excess provisions/credits written back(Including liabilities not payable written back) ....................................... 2,314,924 5,953,226
Miscellaneous Income ............................................................................ 5,501,881 13,755,009
44,810,543 81,837,144
TOTAL 549,618,397 796,419,327
SCHEDULE “K” : OPERATING AND GENERAL EXPENSES:
1 Operating Expenses:
(A) CONSUMPTION OF PROVISIONS, WINES, & SMOKES:
i) Provisions, Beverages (excluding Wines and Liquor) and smokes:
Opening Stock ................................................................................ 1,606,299 1,578,013
Add: Purchases .............................................................................. 22,432,040 47,627,264
24,038,339 49,205,277
Less: Closing Stock ........................................................................ 714,296 1,606,299
23,324,043 47,598,978
ii) Wine and Liquor:
Opening Stock ................................................................................ 977,854 1,028,525
Add: Purchases .............................................................................. 2,932,251 3,586,698
3,910,105 4,615,223
Less: Closing Stock ........................................................................ 1,075,803 977,854
2,834,302 3,637,369
(B) PAYMENTS TO AND PROVISIONS FOR EMPLOYEES:
Salaries, Wages & Bonus ...................................................................... 108,296,928 107,097,872
Contributions to Provident and Other Funds ......................................... 5,786,794 5,880,495
Provision for employee benefits(Gratuity and Leave Encashment benefits) ........................................... 844,181 2,872,024
Workmen and Staff Welfare Expenses .................................................. 10,636,151 13,170,251
125,564,054 129,020,642
Carried forward 151,722,399 180,256,989
dvani Hotels & Resorts (India) LimitedAnnual Report 2008 - 2009
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SCHEDULES FORMING PART OF THE CONSOLIDATED PROFIT AND LOSS ACCOUNT AS AT 31ST MARCH, 2009
Rupees RupeesPrevious Year
Rupees
Brought forward 151,722,399 180,256,989
(C) OTHER OPERATING EXPENSES:Casino Operating Expenses .................................................................. 69,032,000 69,232,910
Power & Fuel .......................................................................................... 38,868,193 43,778,992
Repairs to Building ................................................................................. 8,088,676 11,451,635
Repairs to Plant & Machinery ................................................................ 33,237,776 19,157,391
Repairs – Others .................................................................................... 10,813,439 6,586,101
Replacements......................................................................................... 3,683,973 2,453,688
Guest Supplies ....................................................................................... 18,081,509 23,497,041
Band & Music ......................................................................................... 14,753,164 10,914,279
Water Charges ....................................................................................... 4,335,271 4,393,412
Management Fees ................................................................................. 4,580,624 15,789,405
Other Operating Expenses .................................................................... 2,233,854 2,115,472
207,708,479 209,370,326
General Expenses:Licenses, Rent, Rates & Taxes .............................................................. 18,805,086 16,194,172
Printing & Stationery .............................................................................. 3,733,546 2,460,216
Expenses on communication ................................................................. 14,758,620 3,209,595
Travelling & Conveyance ........................................................................ 7,413,306 22,037,502
Insurance ................................................................................................ 8,070,623 4,759,875
Advertisement & Publicity ...................................................................... 17,472,731 15,387,725
Royalty .................................................................................................... 9,845,773 6,604,272
Service Charges – Marketing and collections ....................................... 7,379,806 16,643,528
Directors’ Fees ....................................................................................... 1,120,000 900,000
Legal & Professional Fees ..................................................................... 17,875,376 11,463,423
Donations ............................................................................................... 866,780 888,430
(Includes Rs. 500,000/- (Prev.Year 200,000/-) paid to Goa Pradesh Congress Committee)
Bad debts & irrecoverable advances written off .................................... 121,938 1,346,532
Provision for Doubtful debts ................................................................... 1,945,163 200,000
Loss due to fluctuation in rates of foreign exchange (Net) ................... 1,469,441Loss on sale/discard /disposal of fixed assets, etc. (Net) ..................... 3,884,712 8,340,436
Entertainment tax, Entry tax, Etc.(Incl Rs. NIL for earlier years (Prev. Year Rs. 1,009,521) ...................... 20,481,258 8,364,316
Amortisation of Foreign Exchange Monetary Item Translation Difference 901,328 —
Amortisation of Expenses ...................................................................... 1,837,400 1,837,400
Miscellaneous Expenses ...................................................................... 4,607,640 6,670,295
142,590,527 127,307,717
502,021,405 516,935,032
SCHEDULE “K–1”: EXCEPTIONAL ITEMS: (NET)Exceptional item of Income:
Profit on sale of Flight Catering Unit .............................................(Refer Note 11 of Part B of Schedule “L”)
37,544,603 —
Less: Exceptional items of Expenses:
Provision for incomplete Hotel Project, considered doubtful .........(Refer Note 1 (a) of Schedule “E”)
11,958,615 —
Provision for doubtful loans and advances .................................... 25,000,000 —
36,958,615 —
TOTAL 585,988 —
dvani Hotels & Resorts (India) Limited
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SCHEDULE FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH, 2009
SCHEDULE ‘L’ : SIGNIFICANT ACCOUNTING POLICIES AND NOTES ON ACCOUNTS - (Contd.)
SCHEDULE FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH, 2009
SCHEDULE ‘L’ : SIGNIFICANT ACCOUNTING POLICIES AND NOTES ON ACCOUNTS:
A. SIGNIFICANT ACCOUNTING POLICIES:
1. Basis of Accounting:
The financial statements are prepared under historical cost convention on an accrual basis and in accordance with the requirements of the Companies Act, 1956.
2. Basis of Consolidation:
The consolidated financial statements have been prepared in accordance with Accounting Standard 21 on “Consolidated Financial Statements” notified by the Companies (Accounting Standards) Rules, 2006. The consolidated financial statements are based on the audited financial statements of the subsidiaries for the financial year. The financial statements of the Company and its subsidiary Companies have been combined to the extent possible on a line by line basis by adding together like items of assets, liabilities, income and expenses. All intra–group balances and transactions have been eliminated on consolidation. Minority interest in the net income and net assets of the subsidiary is computed and disclosed separately. The subsidiary Companies considered in the Consolidated Financial Statements are:
Name of the Company Country of incorporation Percentage holding
Advani Pleasure Cruise Company Private Limited India 51%
Advani Flight Catering Services Private Limited India 100%
3. Revenue Recognition:
The Company derives revenues primarily from hospitality services. Revenue on time and material contracts are recognized as the related services are performed. Revenue yet to be billed is recognized as unbilled revenue. Sales and services are stated exclusive of taxes. Income from Live Casino Business is accounted for on the basis on winnings and losses at the end of each night of play with the count of chips. Income from Slot machines is accounted for on the basis of actual collection in the respective machine. Interest income is recognized on time proportion basis. Dividend income is recognized when the right receive payment is established.
Export Benefit in the nature of Duty Credit Scrips on capital account are recognized in the Profit and Loss Account upon the actual utilization of Duty Credit Scrips.
4. Sales and Services:
Sales are stated net of discount and allowances.
5. Fixed Assets:
(i) Fixed Assets are stated at cost less depreciation. Fee paid for acquisition of technical knowhow is capitalised.
(ii) In the case of new projects successfully implemented, substantial expansion of existing units and expenditure resulting into enduring benefit, all pre–operative expenses including interest on borrowings for the project, incurred up to the date of installation are capitalised and added pro–rata to the cost of fixed assets.
6. Depreciation:
(i) Depreciation is provided in the accounts on straight–line method at the rates prescribed in Schedule XIV to the Companies Act, 1956.
(ii) Where the historical cost of a depreciable asset undergoes a change due to increase or decrease on account of price adjustments, changes in duties or similar factors, depreciation on the revised amount is provided prospectively over the residual useful life of the asset.
7. Investments:
Long Term Investments are valued at cost. Provision for diminution in value is made, if in the opinion of the management, such a decline is considered permanent. Other Investments are valued at cost or market value whichever is lower.
8. Inventories:
Inventories are valued after providing for obsolescence as under:
– Stores and Operating Supplies – At lower of cost or realisable value;
– Food and Beverage – At lower of cost or realisable value; and
– Goods in transit – At lower of cost or realisable value
dvani Hotels & Resorts (India) LimitedAnnual Report 2008 - 2009
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SCHEDULE FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH, 2009
SCHEDULE ‘L’ : SIGNIFICANT ACCOUNTING POLICIES AND NOTES ON ACCOUNTS - (Contd.)
9. Employee Benefi ts:
Company’s contributions to Provident Fund are charged to Profit and Loss Account. Gratuity payable at the time of retirement are charged to Profit and Loss Account on the basis of independent external actuarial valuation determined on the basis of the projected unit credit method carried out annually Actuarial gains and losses are immediately recognized in the Profit and Loss Account. Gratuity in certain applicable cases is provided for in accordance with the provisions of the Goa Shops & Establishment Act, 1973. Provision for leave encashment is made on the basis of independent external actuarial valuation carried out at the end of the year.
10. Foreign Currency Transactions:
(i) Sales made in foreign currency are converted at the prevailing applicable exchange rate. Gain/Loss arising out of fluctuation in exchange rate is accounted for on realization.
(ii) Payment made in foreign currency including for acquiring fixed assets are converted at the applicable rate prevailing on the date of remittance. Liability on account of foreign currency is converted at the exchange rate prevailing at the end of the year except in cases of subsequent payments where liability is provided at actual. Foreign currency in hand is translated at the year–end exchange rate.
(iii) Monetary assets and liabilities denominated in foreign currency at the balance sheet date other than long term foreign currency items of assets and liabilities having a term of twelve months or more as discussed herein below, are translated at the year end exchange rate and the resultant exchange differences are recognised in the Profit and Loss Account. Exchange differences relating to long term foreign currency items of assets and liabilities having a term of twelve months or more as covered in the Companies (Accounting Standards) Amendment Rules 2009 on Accounting Standard 11 (AS–11) notified by Government of India on 31st March, 2009 in so far as they relate to the acquisition of a depreciable capital asset, are added to or deducted from the cost of the assets and depreciated over the balance useful life of the asset, and in other cases are accumulated in a “Foreign Currency Monetary Item Translation Difference Account” and amortized over the balance period of such long term monetary item in accordance with the aforesaid Notification (Refer Note 1 of Part B of Schedule “L”).
11. Prior period adjustments, Extra Ordinary items and Changes in accounting policies:
Prior period adjustments, extraordinary items and changes in accounting policies having material impact on the financial affairs of the Company are disclosed.
12. Leases:
Lease payment under an operating lease is recognised as an expense in the profit and loss account on a straight line basis over the lease period.
Assets taken on finance lease are capitalized and finance charges are charged to profit and loss account on accrual basis.
13. Amortisation of Expenses:
Share Issue Expenses and Deferred Revenue Expenses incurred prior to 1st April, 2003 are continued to be amortised over a period of ten years and over the period over which such benefit is expected to accrue respectively in line with the Accounting Standard 26 (AS – 26) – “Intangible Assets” notified by the Companies (Accounting Standard) Rules, 2006.
14. Borrowing costs:
Borrowing costs that are directly attributable to and incurred on acquiring qualifying assets (assets that necessarily takes a substantial period of time for its intended use) are capitalized. Other borrowing costs are recognized as expenses in the period in which same are incurred.
15. Segment Accounting:
Reportable Segments are identified having regard to the dominant source of revenue and nature of risks and returns.
16. Taxes on Income:
Tax on income for the current period is determined on the basis of taxable income and tax credits computed in accordance with the provisions of the Income Tax Act, 1961. Deferred tax is recognized on timing differences between the accounting income and the taxable income for the year, and quantified using the tax rates and laws enacted as on the Balance Sheet date. Deferred tax assets are recognized and carried forward to the extent that there is a reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized.
dvani Hotels & Resorts (India) Limited
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SCHEDULE FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH, 2009
SCHEDULE ‘L’ : SIGNIFICANT ACCOUNTING POLICIES AND NOTES ON ACCOUNTS - (Contd.)
17. Accounting Provisions, Contingent Liabilities and Contingent Assets:
Provisions are recognized in terms of Accounting Standards 29 – “Provisions, Contingent Liabilities and Contingent Assets” as notified by the Companies (Accounting Standards) Rules, 2006, when there is a present legal or statutory obligation as a result of past events where it is probable that there will be outflow of resources to settle the obligation and when a reliable estimate of the amount of the obligation can be made.
Contingent Liabilities are recognized only when there is a possible obligation arising from past events due to occurrence of one or more uncertain future events not wholly within the control of the Company or where any present obligation cannot be measured in terms of future outflow or resources or where a reliable estimate of the obligation cannot be made. Obligations are assessed on an ongoing basis and only those having a largely probable outflow of resources are provided for.
B. NOTES ON ACCOUNTS:
1. Hitherto the Company was accounting all the exchange differences resulting from translation of monetary assets and liabilities at the year end rates in the Profit and Loss Account. This year the Company has opted for accounting such exchange differences arising on reporting of long term foreign currency monetary items in line with Companies (Accounting Standards) Amendment Rules 2009 on Accounting Standard 11 (AS–11) notified by Government of India on 31st March, 2009. Accordingly such exchange difference on foreign currency loans is accounted by addition to or deduction from the cost of the related assets so far it relates to depreciable capital assets and in other cases by transfer to “Foreign Currency Monetary Item Translation Difference Account” {“FCMITD Account”} to be amortized in accordance with the aforesaid Notification. Exchange difference gain of Rs. 15,080,847/- recognised in the Profit and Loss Account in the previous year ended 31st March, 2008 relating to said long term liabilities in foreign currency has been reversed and deducted from the concerned depreciable assets amounting to Rs.12,980,047/- and/or credited to “FCMITD Account” amounting to Rs. 2,100,800/- by a corresponding debit to the to the extent of Rs. 6,390,000/- being balance available in opening General Reserve as provided in the aforesaid Notification and balance of Rs. 8,690,847/- by debit to the Profit and Loss Account in the absence of sufficient balance in the opening General Reserve. The Company has reversed foreign exchange revaluation loss amounting to Rs.18,759,731/-/- on translation of foreign currency loans, which was charged to Profit and Loss Account during the first three quarters of financial year 2008–09 as an exceptional item and debited to concerned depreciable assets and / or to “FCMITD Account”.
As a result of this change, profit for the year ended 31st March, 2009 is higher by Rs.25,050,140/- with corresponding increase of Rs.20,245,354/- in carrying cost of fixed assets and Rs. 4,804,786/- in “FCMITD Account” respectively. The Company has amortized Rs.901,328/- in the Profit and Loss Account for the year ended 31st March, 2009 and balance unamortized amount of Rs.1,802,657/- in the “FCMITD Account” has been carried forward to subsequent years for being amortised in accordance with the aforesaid Notification.
2. Estimated amount of contracts remaining to be executed on capital account and not provided for Rs.20,247,819/- (Prev. year Rs.10,768,152/-) net of advances.
3. Contingent liabilities not provided for in respect of:
(a) Claims against the Company not acknowledged as debts Rs.8,785,164/- (Prev. year, net of counter claims, Rs.6,145,820/-).
(b) The Dy. Commissioner of Central Excise, Service tax Goa, vide his order dated 31st March, 2005 has held the Company liable to pay service tax on amounts paid by way of management fee and reimbursement of salaries to expatriates under the management Agreement signed by the Company with Casinoinvest, Austria and raised a demand of Rs.510,349/- in respect of payments of management fees and salaries upto 31st March, 2001 paid during 2003–04 and a further demand of Rs.30,167/- towards interest & penalties.
The Company’s first appeal against the said order has been rejected and second appeal has been filed by the Company, which is pending. The Company has paid further amounts of management fees upto the period ended November 2006, and based on the findings in the order dated 31st March, 2005, deposited further service tax of Rs.1,245,086/- for subsequent period under protest pending disposal of the Company’s appeal. The disputed tax, interest & penalty paid so far of Rs.2,660,708/- (Rs.510,349/-, Rs.2,120,192/- and Rs.30,167/- respectively) has not been provided for in the accounts for the year ended 31st March, 2009 and the same has been shown under ‘Loans & Advances’.
(c) Demand raised by Sales tax and luxury tax authorities, disputed by the Company in appeal, which are pending amounting to Rs.5,881,182/- (Prev. Year Rs.4,665,536/-).
(d) Demand raised by Income Tax authorities disputed by the Company in appeal and rectification proceedings, which are pending
dvani Hotels & Resorts (India) LimitedAnnual Report 2008 - 2009
62
SCHEDULE FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH, 2009
SCHEDULE ‘L’ : SIGNIFICANT ACCOUNTING POLICIES AND NOTES ON ACCOUNTS - (Contd.)
– Rs.1,065,815/- (Prev. year Rs.1,065,815/-).
(e) The Company has given Corporate Guarantee of Rs.84,000,000/- on behalf of its subsidiary Company M/s. Advani Pleasure Cruise Company Private Limited to Bank of Baroda, Mumbai. The Corporate Guarantee is 51% of the sanctioned loan amount of Rs.164,000,000/-. As on year ending March 31, 2009, the guarantee stands at Rs.63,805,332/- being 51% of Rs.125,108,495/- i.e. the loan availed by subsidiary Company.
(f) Other money for which the Company is contingently liable:
Current year Previous year
Bank Guarantee Rs.7,885,484 Rs.6,275,484
4. Segment Reporting under Accounting Standard 17: (Figure in Rupees)
Particulars Hotel Casino Operations Consolidated
1. Segment Revenue ...................................................... 317,651,394 231,967,003 549,618,397
463,149,998 333,273,329 796,419,327
2. Segment Results ........................................................ 992,419 (9,750,040) (8,757,621)
103,348,722 104,890,029 208,238,751
3. Profit after taxation ..................................................... 1,447,586 (8,494,174) (7,046,588)
(After prior period items) 63,784,039 67,834,681 131,618,720
4. Segment Assets ......................................................... 446,411,550 250,269,652 696,681,202
524,489,616 71,845,637 596,335,253
5. Segment Liabilities ..................................................... 123,596,328 131,707,436 255,303,764
214,713,719 8,306,828 223,020,547
(Figures in italics are for previous year)
5. Employee Benefi ts:
The disclosures required under Accounting Standard 15 “Employee Benefits” notified in the Companies (Accounting Standards) Rules 2006, are given below:
Defi ned Contribution Plan
The Group has contributed the following amounts towards Defined Contribution Plan, recognized are charged off for the year are as under:
Particulars Current YearRupees
Previous YearRupees
Employer’s Contribution to Provident Fund ............................................................. 2,167,549 2,199,013
Employer’s Contribution to Pension Scheme ........................................................... 2,124,332 1,933,218
Defi ned Benefi t Plan
In respect of Employees’ Retiring Gratuity, the present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognises each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation. The obligation for leave encashment is recognized on actuarial valuation basis.
dvani Hotels & Resorts (India) Limited
63
SCHEDULE FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH, 2009
SCHEDULE ‘L’ : SIGNIFICANT ACCOUNTING POLICIES AND NOTES ON ACCOUNTS - (Contd.)
S. No.
Retiring Gratuity Liability Current YearRupees
(Unfunded)
Previous YearRupees
(Unfunded)
I Assumptions:
Discount rate – previous ................................................................................. 8.00% 7.50% - 8.00%
Salary Escalation – previous .......................................................................... 4.00% - 5.00% 4.00% - 5.00%
Discount rate – Current ................................................................................... 7.75% - 8.00% 8.00%
Salary Escalation – Current ............................................................................ 4.00% - 5.00% 4.00% - 15.00%
II Change in Benefi t Obligation:
Liability at the beginning of the year .............................................................. 5,921,763 5,323,173
Interest cost ..................................................................................................... 528,166 439,377
Current Service Cost....................................................................................... 960,258 845,005
Past Service Cost (Non Vested benefit) ......................................................... — —
Past Service Cost (Vested benefit) ................................................................. — —
Liability Transfer in ........................................................................................... — —
Liability Transfer out ........................................................................................ — —
Benefit Paid ..................................................................................................... (493,045) (1,291,159)
Actuarial (Gain) / Loss on obligations ............................................................ (1,788,839) 1,456,806
Liability at the end of the year ........................................................................ 5,128,303 6,773,302
III Recognition of Transitional Liability: N. A. N. A.
IV Amount recognized in the Balance Sheet:
Liability at the end of the year ........................................................................ 5,128,303 6,773,302
Fair value of Plan Assets at the end of the year ............................................ — —
Difference (5,128,303) (6,773,302)
Unrecognized Past Service Cost .................................................................... — —
Unrecognized Transition Liability ..................................................................... — —
Amount recognized in the Balance Sheet ...................................................... (5,128,303) (6,773,302)
V Expenses recognized in the Profi t and Loss Account:
Current Service Cost....................................................................................... 960,258 845,005
Interest Cost .................................................................................................... 528,166 439,377
Expected return on Plan assets ..................................................................... — —
Past Service Cost (non–vested benefit) recognized ...................................... —
Past Service Cost (vested benefit) recognized .............................................. — —
Recognition of Transition Liability .................................................................... — —
Actuarial Gain or (Loss) .................................................................................. (1,788,839) 1,456,906
Expense recognized in the Profit and Loss Account ..................................... (300,415) 2,741,288t
VI Balance Sheet Reconciliation:
Opening Net Liability ....................................................................................... 5,921,763 5,323,173
Expenses as above ......................................................................................... (300,415) 2,741,288
Employer’s Contribution .................................................................................. (493,045) (1,291,159)
Closing Net Liability ........................................................................................ 5,128,303 6,773,302
dvani Hotels & Resorts (India) LimitedAnnual Report 2008 - 2009
64
SCHEDULE FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH, 2009
SCHEDULE ‘L’ : SIGNIFICANT ACCOUNTING POLICIES AND NOTES ON ACCOUNTS - (Contd.)
Sr. No.
Leave Encashment Liability Current YearRupees
(Unfunded)
Prev. YearRupees
(Unfunded)
I Summary of Assumption:
Retirement age ................................................................................................ 58 – 60 years 58 – 60 years
Attrition rate ..................................................................................................... 2.00% 2.00% – 5.00%
Future Salary Rise .......................................................................................... 4.00% – 5.00% 4.00% – 15.00%
Rate of Discounting ......................................................................................... 7.50% – 8.00% 8.00%
Mortality Table ................................................................................................. LIC (1994–96) Ultimate
LIC (1994–96) Ultimate
II Actuarial Value of leave encashment liability .................................................. 1,519,039 1,669,046
6. Related Party Disclosures under Accounting Standard 18:
(a) Parties where control exists: None
(b) Parties where control exists: None
(c) Key Management Personnel:
Mr. Sunder G. Advani – Chairman & Managing Director
Mr. Haresh G. Advani – Executive Director
Mr. Prahlad S. Advani – Manager – Asset Management and Relative (Son)
(d) Other parties being relative of key management personnel with whom transactions have taken place during the year : None
(e) Other related parties with whom transactions have taken place during the year:
Mr. K. Kannan, Mr. Prakash V. Mehta, and Mr. Anil Harish – Non–Executive Directors
Mrs. Menaka S. Advani, Non–Executive Director and a relative
D. M. Harish & Co., Advocates (Partnership firm wherein Mr. Anil Harish is a partner)
Malvi Ranchhoddas & Co. Solicitors & Advocates (Partnership firm wherein Mr. Prakash V. Mehta is a partner)
CAI CasinoInvest GMBH (substantial shareholder of the Subsidiary)
(f) Summary of transactions during the year with Related Parties and status of outstanding balances as on 31st March, 2009:
(Rupees)
Sr. No.
Nature of transactions Associates and other related
parties
Key Management Personnel
1 Sale of goods & services ................................................................................ ——
——
2 Purchase of goods & services ........................................................................ ——
——
3 Remuneration including Sitting Fees .............................................................. 1,120,000900,000
10,589,54212,411,579
4 Consultancy Fees ............................................................................................ 217,963240,450
——
5 Expenses recovered ........................................................................................ ——
902,9891,174,967
6 Interest paid .................................................................................................... —18,375
—279,971
7 Management Fees .......................................................................................... 4,580,62415,789,405
——
dvani Hotels & Resorts (India) Limited
65
SCHEDULE FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH, 2009
SCHEDULE ‘L’ : SIGNIFICANT ACCOUNTING POLICIES AND NOTES ON ACCOUNTS - (Contd.)
8 Loans taken ..................................................................................................... —200,000
—3,400,000
9 Loans & Advances given / (recovered) ........................................................... ——
——
10 Balance outstanding at the year end: .............................................................
Amount Payable .............................................................................................. — —
Accounts receivable ........................................................................................ 8,452,72720,478,172
——
(Figures in italics are for previous year)
7. The Company’s significant leasing arrangements for its subsidiary company is in respect of operating leases for the ship and the office premises (Jetty), from where the pleasure cruise business is carried on by the subsidiary company. As per the arrangement, the lease rent of the ship and the Jetty premises is being reimbursed by the subsidiary company to the company.
The Company has also taken certain premises on lease. The aggregate lease rentals payable are charged as rent in the Profit and Loss Account.
Future commitments in respect of minimum lease payments payable for non–cancelable operating leases entered into by the Company including in respect of the ship referred to above:
Particulars Current YearRupees
Previous YearRupees
Payable within one year ........................................................................................... 35,871,704 23,970,667
Payable later than one year but not later than five years ....................................... 24,261,897 17,175,000
Payable after five years ............................................................................................ Nil Nil
8. Earnings per share (E.P.S.) under Accounting Standard 20:
Particulars Current YearRupees
Previous YearRupees
Profit/(Loss) after tax and Minority Interest as per Accounts .................................. (2,884,443) 98,379,726
No. of Shares issued ................................................................................................ 46,219,250 46,219,250
Nominal face value of share .................................................................................... Rs. 2 Rs. 2
Basic & Diluted E.P.S. .............................................................................................. (0.06) 2.13
9. Component of Deferred Tax Assets and Liabilities are as under:
Particulars Current YearRupees
Previous YearRupees
Deferred tax liabilities on account of:
Difference between the written down value of assets under the Companies Act, 1956 and the Income Tax Act, 1961. .................................................................. 72,411,734 73,211,615 Amount allowable under section 40(a) (ia)/43B of the Income Tax Act, 1961 ... 3,434,895 1,503,729
Total (A) 75,846,629 74,715,344 Deferred Tax Liability on account of :
Expenses Allowable on payment basis .............................................................. 1,532,914 1,461,592 Disallowance under section 40(a) (ia)/43B of the Income Tax Act, 1961 .......... 6,934,675 6,539,332 Business Loss and unabsorbed depreciation ..................................................... 2,642,525 — Provision for Employment benefits ..................................................................... 678,012 682,285 Provision for doubtful debt .................................................................................. 9,605,289 446,628
Total (B) 21,393,415 9,129,837 Deferred Tax Liability –Net (A – B) ..................................................................... 54,453,214 65,585,507 Deferred Tax Debit / (Credit) for the year ........................................................... (11,132,293) 1,874,074
dvani Hotels & Resorts (India) LimitedAnnual Report 2008 - 2009
66
SCHEDULE FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH, 2009
SCHEDULE ‘L’ : SIGNIFICANT ACCOUNTING POLICIES AND NOTES ON ACCOUNTS - (Contd.)
10. The Company has obtained exemption from the Department of Company Affairs (DCA) vide its letter No 47/205/2009-CL-III dated March 16, 2009 for publication of the Accounts of its subsidiaries under the provisions of the Companies Act, 1956. The information as required under the condition 3 of the said approval is given below:
(Rupees)
ParticularsAdvani Pleasure
Cruise Co. Pvt. Ltd.
Advani Flight Catering Services
Pvt. Ltd.
LIABILITIES:
Share Capital ........................................................................................................... 43,500,000 100,000
Reserves & Surplus ................................................................................................. 107,733,733 —
Secured Loan ........................................................................................................... 125,882,795 —
Unsecured Loan ....................................................................................................... 5,824,641 —
Current Liabilities ..................................................................................................... 129,737,628 11,236
TOTAL LIABILITIES 412,678,797 111,236
ASSETS:
Fixed Assets–Net (incl. CWIP) ................................................................................. 246,594,953 —
Deferred Tax Asset ................................................................................................... 1,154,566
Current Assets ......................................................................................................... 161,254,479 87,898
Miscellaneous Expenditure ...................................................................................... 3,674,799 —
Profit & Loss Account .............................................................................................. — 23,338
TOTAL ASSETS 412,678,797 111,236
Turnover .................................................................................................................... 231,967,003 —
Profit/(Loss) Before Taxation .................................................................................... (9,750,040) (5,572)
Less Provision for Tax .............................................................................................. (1,820,377) —
Profit After Tax .......................................................................................................... (7,929,663) (5,572)
Proposed Dividend ................................................................................................... — —
Note: There are no business operations till March 31, 2009 in the Advani Flight Catering Services Private Limited.
11. Sale of fl ight catering unit: The Company has sold its Flight Kitchen Business Undertaking known as “Airport Plaza” alongwith land, building and other assets for a gross consideration of Rs. 2,030 lakhs in terms of Business Transfer Agreement dated June 06, 2008. The sale was approved by the Shareholders of the Company vide resolution passed by way of postal ballot on January 30, 2008. The profit of Rs. 95,941,283/- being capital gain i.e. excess of realisation over cost of assets and goodwill of the business (tax of Rs. 13,600,000/- thereon) has been carried to Capital Reserve (refer Schedule ‘B’) and the remaining profit of Rs. 37,544,603/- has been included in Exceptional Income in Schedule “K–1”.
In view of the sale of the undertaking as above, the figures of the current year are strictly not comparable with figures of previous year.
12. Previous year’s figures have been recast / regrouped / rearranged wherever necessary for comparison sake.
Signature on the Schedules “A” to “L”. For and on behalf of the Board
SUNDER G. ADVANI Chairman & Managing Director
HARESH G. ADVANI Executive Director
Mumbai: August 13, 2009KUMAR IYER
Company Secretary SHANKAR G. KULKARNI
General Manager – Finance (CFO)
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Mr. Sunder G. Advani, Chairman and Managing Director with Mr. Sujit Banerjee, Secretary Tourism, Government of India on his recent visit to our resort.
Mr. Sunder G. Advani, Chairman and Managing Director accompanying the Hon’ble Chief Minister of Goa, Mr. Digambar Kamat and Mr. Pratapsingh Rane (Hon’ble Former Chief Minister of Goa) at an event at our resort.
The front and back cover pictures are of the newly launched Presidential Villas.
Registered Office: 1009/1010 Dalamal Towers, 211 Nariman Point, Mumbai 400021.Tel: (91-22) 2285 0101, Fax: (91-22) 2204 0744, Email: [email protected]
www.caravelabeachresort.com
c a r ave l a b e a c h r e s o r tGoa
R A M A D A