Bharat Hotels Annual Report

ANNUALREPORT 2008-2009

BHARAT HOTELS LIMITED

LaSit Suri (November 19, 1946 - October 10, 2006)

In us, you live.

BHABAT HOTELS LIMITED

CONTENTS

PAGE NO.

Board of Directors

2

Notice

3

Directors'Report

11

Auditors' Report

19

Balance Sheet

24

Profit & Loss Account

26

Cash Flow Statement

28

Schedule & Notes

31

Balance Sheet Abstract

63

Statement Relating to Subsidiaries

64

Annual Accounts of all Subsidiaries - Jyoti Limited

65

- Udaipur Hotels Limited

81

- Apollo Zipper India Limited

116

- Prime Cellular Limited

146

- Prima Buildwell Pvt. Limited

165

- Bharat Hotels (Thailand) Co., Ltd.

188

Attendance Slip & Proxy Form

Annexed

BHADAT HOTEU LIMITED CHAIRPERSON AND MANAGING DIRECTOR Ms. Jyotsna Suri DIRECTORS Mr. Ramesh Suri Mr. Hanuwant Singh Mr. Dharam Veer Batra Mr. Abhay Navalmal Firodia Mr. Chakor Lalchand Doshi Mr. Lalit Bhasin Mr. Vinod Khanna Dr. M.Y. Khan Mr. V.N. Dhoot SR. VICE PRESIDENT & COMPANY SECRETARY Mr. Vij'ay K. Verma SR. VICE PRESIDENT-FINANCE Mr. Arvind Sachdev SR. VICE PRESIDENT - FINANCE & SYSTEMS Mr. Madhav Sikka REGISTERED OFFICE Barakhamba Lane New Delhi-110001, India STATUTORY AUDITORS S.R. Batliboi & Associates Chartered Accountants Golf View Corporate Tower B Sector-42, Sector Road Gurgaon -122002, Haryana, India

BANKERS The Jammu & Kashmir Bank Ltd. Canara Bank

DHADAT HOTELS LIMITED NOTICE Notice is hereby given that the 28th Annual General Meeting of the Members of Bharat Hotels Limited will be held on Wednesday the 26th August, 2009 at 3:00 P.M at FICCI Golden Jubilee Auditorium, Tansen Marg, New Delhi 110 001 to transact the following business: ORDINARY BUSINESS 1.

To receive, consider and adopt the Audited Balance Sheet as at 31st March, 2009 and the Profit and Loss Account for the Financial Year ended on that date and the Reports of the Directors and the Auditors thereon.

2.

To declare Dividend for the Financial Year ended 31st March, 2009.

3.

To appoint a Director in place of Dr. Mohammed Yusuf Khan, who retires by rotation and, being eligible, offers himself for reappointment.

4.

To appoint a Director in place of Shri Chakor Lalchand Doshi, who retires by rotation and, being eligible, offers himself for reappointment.

5.

To appoint a Director in place of Shri Abhay Navalmal Firodia, who retires by rotation and, being eligible, offers himself for reappointment.

6.

To appoint Auditors and to fix their remuneration.

SPECIAL BUSINESS 7.

To consider and, if thought fit, to pass with or without modification(s) the following resolution as a Special Resolution: "RESOLVED THAT approval of the Members of the company be and is hereby accorded pursuant to provisions of Sections 198,269,310,311 and any other applicable provisions, if any, of the Companies Act, 1956 to the appointment of Ms. Divya Suri Singh as Executive Director of the company, liable to retire by rotation, w.e.f. 26th August, 2009 for a period of 5 (five) years at a salary of Rs.4,25,000/- per month and commission on profits and perquisites subject to ceiling laid down in Schedule XIII of the Companies Act, 1956."

8.

To consider and, if thought fit, to pass with or without modification(s) the following resolution as a Special Resolution: "RESOLVED THAT approval of the Members of the company be and is hereby accorded pursuant to provisions of Sections 198,269,310,311 and any other applicable provisions, if any, of the Companies Act, 1956 to the appointment of Ms. Deeksha Suri as Executive Director of the company, liable to retire by rotation, w.e.f. 26th August, 2009 for a period of 5 (five) years at a salary of Rs.4,25,000/- per month and commission on profits and perquisites subject to ceiling laid down in Schedule XIII of the Companies Act 1956."

9.

To consider and, if thought fit, to pass with or without modification(s) the following resolution as a Special Resolution: "RESOLVED THAT approval of the Members of the company be and is hereby accorded pursuant to provisions of Sections 198,269,310,311 and any other applicable provisions, if any, of the Companies Act,

BHADAT HOTELS LIMITED 1956 to the appointment of Mr.Keshav Suri as Executive Director of the company, liable to retire by rotation, w.e.f. 26th August, 2009 for a period of 5 (five) years at a salary of Rs.4,25,000/- per month and commission on profits and perquisites subject to ceiling laid down in Schedule XIII of the Companies Act, 1956." 10.

To consider and, if thought fit, to pass with or without modification(s) the following resolution as a Special Resolution: "RESOLVED THAT pursuant to provisions of Section 293(1 )(e) of the Companies Act, 1956 the Board of Directors of the Company be and is hereby authorized to contribute to charitable and other funds not directly relating to the business of the Company or the welfare of its employees, any amounts upto an aggregate sum of Rs.10,00,00,0007- (Rupees ten crores only) in any financial year." By Order of the Board for BHARAT HOTELS LIMITED

VIJAY K. VERMA

Dated : 27th June, 2009 Place : New Delhi Regd. Office: Barakhamba Lane, New Delhi -110001

Sr. Vice President & Company Secretary

NOTES: 1.

A MEMBER ENTITLED TO ATTEND AND VOTE ATTHE MEETING IS ENTITLED TO APPOINT A PROXY TO ATTEND AND VOTE INSTEAD OF HIMSELF AND A PROXY NEED NOT BE A MEMBER OF THE COMPANY. PROXIES IN ORDER TO BE EFFECTIVE MUST BE DEPOSITED AT THE REGISTERED OFFICE OF THE COMPANY AT BARAKHAMBA LANE, NEW DELHI-110001 NOT LATER THAN 48 HOURS BEFORE THE COMMENCEMENT OF THE MEETING.

2.

The Register of Members and Share Transfer Books of the company will remain closed from Monday, the 17th August, 2009 to Wednesday, the 26th August, 2009 (both days inclusive) to take record of the shareholders of the company.

3.

The members/proxies should bring their attendance slips sent herewith, duly filled in for attending the meeting.

4.

Members desirous of obtaining any information concerning accounts or operation of the company are requested to write to the company at least 10 days before the date of Annual General Meeting so as to enable the management to keep the information ready.

5.

The members are requested to notify any change in their registered address/residential status immediately to the Registrar M/s Karvy Computershare Private Limited, Plot No. 17 to 24, Nr. Image Hospital, Vittal Rao Nagar, Madhapur, Hyderabad-500081 ,A.P., India. In case of dematerialised shares, the aforesaid information should be given to the depository participant with which the member has account.

6.

Entry in the meeting hall shall be strictly restricted to the members/valid proxies only carrying the attendance slip.

7.

Information u/s. 205A read with the Companies Unpaid Dividend (Transfer to Investors Education and Protection Fund set up by the Govt. of India): a) Pursuant to the provisions of section 205A(5) of the Companies Act, 1956 and introduction of section 205C of the Companies Act, 1956, the Company has transferred unclaimed dividend upto the financial year ending 31 st March, 2001 to Investors Education and Protection Fund set up by Govt. of India. The amount of dividend for the financial years 2006-2007 and 2007-2008 remaining unclaimed for a period of seven years from the date of transfer to Unpaid Dividend Account of the Company shall be transferred to the Investor Education and Protection Fund set up by the Government of India and no payments shall be made in respect of any such claims. b) Members who have not yet encashed their dividend warrant(s) for the financial years 2006-2007 and 2007-2008 are requested to claim the amount forthwith from the Company.

BHADAT HOTELS LIMITED EXPLANATORY STATEMENT IN RESPECT OF SPECIAL BUSINESS PURSUANT TO SECTION 173(2) OF THE COMPANIES ACT, 1956 ITEM NO.7

Ms. Divya Suri Singh is Master in Law from Kings College London and has been associated with the company as Legal Advisor since the year 2001. The company has immensely benefited from her contribution as legal advisor to the company. In view of the above the Board of Directors of the Company at its meeting held on 27th June, 2009 has proposed to appoint Ms. Divya Suri Singh as Executive Director of the Company liable to retire by rotation as per the provisions of the Articles of Association of the Company w.e.f. 26.08.2009 on the following terms and conditions: I)

SALARY:

Salary @ Rs.4,25,000/- (Rupees four lakh twenty-five thousand only) per month. II)

COMMISSION:

Commission upto 1% of the net profits. III)

PERQUISITES:

Perquisites will be restricted to an amount equal to the annual salary. For this purpose perquisites be classified into three categories, Parts A, B & C. PART "A" (i)

MEDICAL REIMBURSEMENT:

Expenses incurred for self and the family, subject to a ceiling of one month's salary in a year or three months' salary over a period of three years. (ii)

LEAVE TRAVEL CONCESSION:

For self and family once in a year in accordance with the rules of the company. (iii)

PERSONALACCIDENT INSURANCE: Premium not to exceed Rs.4,000/- per annum.

(iv)

CLUB FEES: Fees for Clubs, subject to a maximum of Two Clubs. This will not include admission and life membership fees. EXPLANATION:

For the purpose of this Part 'Family' means the spouse, the independent children and dependent parents. PART"B" Contribution to Provident Fund, Superannuation Fund or Annuity Fund will not be included in the computation of ceiling on perquisites to the extent these either singly or put together are not taxable under the Income Tax Act. Gratuity payable shall not exceed half a month's salary for each completed year of service.

PART"C" Provision of car for use on company's business and telephone at residence will not be considered as perquisites. Personal long distance calls on telephone and use of car for private purpose shall be billed by the company to the Executive Director. Commission on the net profits of the company subject to ceilings under Sections 198 and 309 and computed in the manner laid down in Section 349 of the Companies Act, 1956. In view of the above, the Board of Directors recommended for the approval of shareholders the appointment and payment of remuneration as stated in the resolution as aforesaid w.e.f. 26th August, 2009 for a period of 5 years. None of the Directors except Ms. Jyotsna Suri, Chairperson & Managing Director and Shri Ramesh Suri, Director of the company being relatives are interested or concerned in this Resolution. This explanation together with the accompanying notice should be treated as an extract u/s 302 of the Companies Act, 1956 in respect of the appointment of Ms. Divya Suri Singh as Executive Director of the Company. ITEM NO. 8 Ms. Deeksha Suri was appointed as General Manager-Corporate of the company w.e.f. 01.09.2002 as approved by the Members of the company. She has been looking after manpower planning and Human Resource Development besides other general administration of the company at Corporate level. She is B.Com (H) from University of Delhi and holds Post Graduate Diploma in Business Studies from London School of Economics. The company has been immensely benefited from her contribution especially during expansion of company's business. In view of the above the Board of Directors of the Company at its meeting held on 27th June, 2009 has proposed to appoint Ms. Deeksha Suri as Executive Director of the Company liable to retire by rotation as per the provisions of the Articles of Association of the Company w.e.f. 26.08.2009 on the following terms and conditions: I)

SALARY: Salary @ Rs.4,25,000/- (Rupees four lakh twenty-five thousand only) per month.

II)

COMMISSION: Commission upto 1 % of the net profits.

III)

PERQUISITES: Perquisites will be restricted to an amount equal to the annual salary. For this purpose perquisites be classified into three categories, Parts A, B & C.

PART "A" (v)

MEDICAL REIMBURSEMENT: Expenses incurred for self and the family, subject to a ceiling of one month's salary in a year or three months' salary over a period of three years.

(vi)

LEAVE TRAVEL CONCESSION: For self and family once in a year in accordance with the rules of the company.

(vii)

PERSONAL ACCIDENT INSURANCE: Premium not to exceed Rs.4,000/- per annum.

BHABAT HOTEL& LIMITED

(viii)

CLUB FEES: Fees for Clubs, subject to a maximum of Two Clubs. This will not include admission and life membership fees. EXPLANATION: For the purpose of this Part 'Family' means the spouse, the independent children and dependent parents.

PART"B" Contribution to Provident Fund, Superannuation Fund or Annuity Fund will not be included in the computation of ceiling on perquisites to the extent these either singly or put together are not taxable under the Income Tax Act. Gratuity payable shall not exceed half a month's salary for each completed year of service. PART"C" Provision of car for use on company's business and telephone at residence will not be considered as perquisites. Personal long distance calls on telephone and use of car for private purpose shall be billed by the company to the Executive Director. Commission on the net profits of the company subject to ceilings under Sections 198 and 309 and computed in the manner laid down in Section 349 of the Companies Act, 1956. In view of the above, the Board of Directors recommended for the approval of shareholders the appointment and payment of remuneration as stated in the resolution as aforesaid w.e.f. 26th August, 2009 for a period of 5 years. None of the Directors except Ms. Jyotsna Suri, Chairperson & Managing Director and Shri Ramesh Suri, Director of the company being relatives are interested or concerned in this Resolution. This explanation together with the accompanying notice should be treated as an extract u/s 302 of the Companies Act, 1956 in respect of the appointment of Ms. Deeksha Suri as Executive Director of the Company. ITEM NO. 9 Mr. Keshav Suri was appointed as General Manager-Corporate of the company w.e.f. 01.07.2007 as approved by the Members of the Company. He has been looking after operations and projects of the Company at Corporate level. He is MSC in International Management and Masters in Law from Kings College, London. The company has been immensely benefited from his contribution especially during expansion of company's business. In view of the hard work put in by Mr. Keshav Suri and the responsibilities shouldered by him the Board of Directors of the Company at its meeting held on 27th June, 2009 has proposed to appoint Mr. Keshav Suri as Executive Director of the Company liable to retire by rotation as per the provisions of the Articles of Association of the Company w.e.f. 26.08.2009 on the following terms and conditions: I)

SALARY: Salary @ Rs.4,25,000/- (Rupees four lakh twenty-five thousand only) per month.

II)

COMMISSION: Commission upto 1% of the net profits.

Ill)

PERQUISITES:

Perquisites will be restricted to an amount equal to the annual salary. For this purpose perquisites be classified into three categories, Parts A, B & C. PART "A" (ix)

MEDICAL REIMBURSEMENT: Expenses incurred for self and the family, subject to a ceiling of one month's salary in a year or three months' salary over a period of three years.

(x)

LEAVE TRAVEL CONCESSION: For self and family once in a year in accordance with the rules of the company.

(xi)

PERSONALACCIDENT INSURANCE:

Premium not to exceed Rs.4,000/- per annum. (xii) CLUB FEES: Fees for Clubs, subject to a maximum of Two Clubs. This will not include admission and life membership fees. EXPLANATION:

For the purpose of this Part 'Family' means the spouse, the independent children and dependent parents. PART"B" Contribution to Provident Fund, Superannuation Fund or Annuity Fund will not be included in the computation of ceiling on perquisites to the extent these either singly or put together are not taxable under the Income Tax Act. Gratuity payable shall not exceed half a month's salary for each completed year of service. PART"C" Provision of car for use on company's business and telephone at residence will not be considered as perquisites. Personal long distance calls on telephone and use of car for private purpose shall be billed by the company to the Executive Director. Commission on the net profits of the company subject to ceilings under Sections 198 and 309 and computed in the manner laid down in Section 349 of the Companies Act, 1956. In view of the above, the Board of Directors recommended for the approval of shareholders the appointment and payment of remuneration as stated in the resolution as aforesaid w.e.f. 26th August, 2009 for a period of 5 years. None of the Directors except Ms. Jyotsna Suri, Chairperson & Managing Director and Shri Ramesh Suri, Director of the company being relatives are interested or concerned in this Resolution. This explanation together with the accompanying notice should be treated as an extract u/s 302 of the Companies Act, 1956 in respect of the appointment of Mr. Keshav Suri as Executive Director of the Company.

BHABAT HOTELS LIMITED ITEM 10: With a view to meet social obligations to the society as a Corporate House, the Company has been making contributions from time to time to charitable and other funds not directly relating to the business of the Company or welfare of its employees. The Board of Directors of the Company in its meeting held on 27th June, 2009 has resolved to seek approval of the Members for making such contributions upto an aggregate sum of Rs.10.00 crores in any financial year. Hence, the Resolution at Item No. 10 is placed before the Members for approval. None of the Directors of the Company are deemed to be concerned or interested in the aforesaid Resolution.

By Order of the Board for BHARAT HOTELS LIMITED

VIJAY K. VERMA Sr. Vice President & Company Secretary Dated: 27th June, 2009. Place: New Delhi Regd. Office: Barakhamba Lane, New Delhi -110001

10

DIRECTORS' REPORT TO THE MEMBERS

The Directors have pleasure in presenting twenty-eighth Annual Report together with the Audited Accounts of the company for the year ended 31 st March, 2009. Rs. in lacs

FINANCIAL RESULTS 2008-09

2007-08

34,092.20

43,168.94

Other income

5,753.15

4,339.56

Total Income

39,845.35

47,508.50

Profit before Depreciation, Interest and Tax

10,114.66

16,521.13

Less: Depreciation

2,374.72

2,738.68

Less: Interest

3,191.74

2418.66

Profit before tax

4,548.20

11,363.79

Less: Provision for tax including deferred tax

1,676.81

4,314.04

Profit after tax

2,871.38

7,049.75

23,716.41

18,584.23

Less: Loss of Khajuraho Hotels Limited up to year ended March 31, 2007

—

747.95

Add: Transfer from Reserve for bad and doubt debts.

—

310.00

26,587.79

25,196.03

Income from operations

Add: Balance brought forward from the previous year

Profit available for appropriation APPROPRIATIONS

Proposed final dividend

759.91

751.85

Tax on proposed dividend

129.15

127.78

Transfer to Debenture Redemption Reserve

162.24

—

Transfer to general reserve

600.00

600.00

Surplus carried to Balance Sheet

24,936.50

23,716.41

TOTAL

26,587.79

25,196.03

The Financial Statements for the Financial Year ended 31st March, 2009 have been approved by the Audit Committee. OPERATIONS

The year 2008 - 2009 has been an important milestone for Bharat Hotels Limited. On November 19, 2008 your company adopted a new brand identity - The LaLiT for all its hotels, under The Lalit Suri Hospitality Group. Prior to this all hotels were operated under the brand of The Grand - Hotels, Palaces and Resorts.

11

BHABAT HOTELS LIMITED Additionally your company concluded its international association with Intercontinental Hotels Group (IHG) for the New Delhi and Srinagar properties, and as of November 19,2008 - Intercontinental The Grand New Delhi came to be known as The LaLiT New Delhi and Intercontinental The Grand Palace Srinagar as The LaLiT Grand Palace Srinagar. During the year your company's flagship hotel, The LaLiT New Delhi has completed most of its holistic product enhancement, with the unveiling of the new looks lobby in August 2008. Today the hotel boasts of a contemporary style which incorporates the latest in design trends and technology - be it in its 460 rooms and suites, the 24/7 Restaurant & Bar, Rejuve -The Spa, Swimming Pool and other areas. The Group's under development properties are also proceeding as per schedule - with The LaLiT Resort & Spa Bekal set to open in September, 2009 whereas The LaLiT Jaipur and The LaLiT Chandigarh are set to be open by mid of 2010. The renovations of The LaLiT Great Eastern Kolkata are expected to be completed in the 3rd quarter of 2010 and the hotel should be operational by end of 2010. The construction of overseas hotel projects at Dubai and at Koh Samui, Thailand of your company is expected to commence by end of this year. SUBSIDIARIES & JOINT VENTURES

The Company has six subsidiary companies. The LaLiT Laxmi Vilas Palace Udaipur owned by Udaipur Hotels Limited is fully operational after renovations. The company owns 99.99% of equity shares of the aforesaid subsidiary company. The company owns 90% equity shares of Apollo Zipper India Limited which owns the 168 years old The LaLiT Great Eastern hotel at Kolkata whereas the Government of West Bengal owns the balance 10% equity shares in this company. The renovation and construction works at The LaLiT Great Eastern Kolkata is progressing satisfactorily. The hotel is expected to open by mid 2010. Jyoti Limited is another subsidiary of the company, which has the lease hold rights for the hotel The LaLiT Grand Palace, Srinagar. Jyoti Limited has licenced the hotel property to Bharat Hotels Limited for operation and management. Prime Cellular Limited is another subsidiary of the company which has invested in joint venture company Kujjal Builders Private Limited under joint venture arrangement (50:50) with DLF Limited. The said company has been allotted land in Chandigarh for construction of a 5 Star Hotel to be known as The LaLiT Chandigarh, which will be managed and operated by Bharat Hotels Limited. The plans for construction of the said hotel have already been approved by the concerned authorities and the construction work is progressing satisfactorily. The hotel is expected to be operational by June 2010. Prima Buildwell Private Limited is another wholly owned subsidiary of Bharat Hotels Limited. This company along with Premium Holdings Limited, U.K. one of the group company of Bharat Hotels Limited is having a joint Venture arrangement (50:50) with Nakheel Group of companies in Dubai. Under this joint venture a 5 Star Hotel to be known as The LaLiT Fort Dubai is being constructed and developed. The plans for the said hotel are under finalization. This hotel will also be managed and operated by Bharat Hotels Limited. The company had entered into a Joint Venture Agreement with the promoters of Bharat Hotels (Thailand) Co. Ltd. a company registered under the laws of Thailand which is acquiring a Resort at Koh Samui, Thailand. In this Joint Venture your company is holding 89.988% equity with an investment of approximately 539.93 million Bahts (INR 700.00 million approx.) in the share capital. Thus the said company has become a subsidiary of your company.

12

DIVIDEND

The Board has recommended a dividend of Re.1/- (10%) per share. The dividend if approved in the forthcoming Annual General Meeting will be paid to the members whose names appear in the Register of members of the company on 26th August, 2009. As per provisions of Income Tax Act, 1961, the tax on dividend will be borne by the company. DIRECTORS

In accordance with the provisions of the Companies Act, 1956, Dr. Mohammed Yusuf Khan, Shri Chakor Lalchand Doshi and Shri Abhay Navalmal Firodia, Directors of the Company, retire by rotation at this Annual General Meeting and, being eligible, offer themselves for reappointment. Shri Venugopal Nandlal Dhoot, retiring by rotation, has expressed his unwillingness to be reappointed as a Director of the company. The Board records its appreciation for his contribution to the Company. The Board has recommended appointment of Ms. Divya Suri Singh, Ms. Deeksha Suri and Mr. Keshav Suri as executive Directors of the company with effect from 26th August, 2009. Necessary resolutions seeking approval of the Members of the company are being proposed at the ensuing Annual General Meeting. TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND

During the year, the company transferred a sum of Rs.1,67,3987- to Investor Education and Protection Fund of the Central Government being the amount due and payable and remaining unpaid for a period of seven years as provided in Section 205C of the Companies Act, 1956. AUDITORS' OBSERVATIONS

One of the employees of the company's hotel The LaLiT New Delhi has mis-appropriated funds amounting to Rs.2,70,193/- and sold rooms at low rates causing a loss of Rs.15,12,400/- during the year. The company has taken necessary legal and criminal action against the said employee and has terminated the said employee. The company has further strengthened the internal control system in all hotels in the group so as to avoid such kind of events. The observations of the Auditors have been suitably explained in the notes on Accounts and do not call for any further comments. FIXED DEPOSITS

The company has not accepted deposits within the meaning of Company's (Acceptance of Deposits) Rules, 1975 from the public during the year. There are no unpaid or unclaimed deposits lying with the company. AUDITORS

M/s. S.R. Batliboi & Company, Chartered Accountants, Gurgaon, retire at the ensuing Annual General Meeting and, being eligible, offer themselves for re-appointment. The company has received a certificate from them pursuant to Section 224(1 B) of the Companies Act, 1956 confirming their eligibility for re-appointment. INFORMATION REGARDING CONSERVATION OF ENERGY ETC. AND EMPLOYEES

Information required under Section 217(1 )(C) of the Companies Act, 1956 read with the companies (Disclosure of Particulars in the report of Board of Directors) Rules, 1988 and information as per section 217(2A) of the Companies

13

BHADAT HOTELS LIMITED Act, 1956 read with companies (Particulars of Employees) Rules, 1975 as amended from time to time are given in Annexure 'A', 'B' and 'C' forming part of the report. AUDIT COMMITTEE

The Audit Committee of the Board is duly constituted according to the provisions of Section 292A of the Companies Act, 1956. The Committee comprises of three Non-executive and Independent Directors viz. Dr. Mohammed Yusuf Khan, Mr.Lalit Bhasin and Mr. Hanuwant Singh. Mr. Arvind Sachdev, Senior Vice President - Finance represent as the Head of Finance of the company and Mr. Vijay K. Verma, Senior Vice-President and Company Secretary of the company acts as Secretary of the Committee. 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 had been followed along with proper explanation relating to material departures;

(ii)

the Directors had selected such accounting policies and applied consistently and made judgments and estimates 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)

the Directors had taken proper and sufficient care 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 Directors had prepared the Annual Accounts on a going concern basis.

ACKNOWLEDGEMENT

The Directors acknowledge with gratitude the whole-hearted support and the co-operation extended by all associated with the operations of Company's all operational Hotels as well as Hotels under construction and renovations. They also express their appreciation to the employees at all levels for their dedication and sincerity at work. The employee-management relations through out the year were extremely cordial. The Directors also express their gratitude to the members of the Company, valued customers and clients, Banks, Government, Municipal Bodies and members of public for their continued support and confidence reposed in the management of the company. For and on behalf of the Board

Place: New Delhi Dated^T* June, 2009

JYOTSNA SURI CHAIRPERSON AND MANAGING DIRECTOR

14

ANNEXURE - A TO THE DIRECTORS REPORT PARTICULARS REQUIRED TO BE DISCLOSED AS PER THE COMPANIES (DISCLOSURE OF PARTICULARS IN THE REPORT OF THE BOARD OF DIRECTORS) RULES, 1988. (1) CONSERVATION OF ENERGY

a)

Various energy conservation measures adopted by the company in respect of all Hotels are as follows:

—

Energy saving electrical fittings have been installed in illuminated areas which are active round the clock.

—

Timers and photo cell switches have been installed for controlling the exterior lights.

—

With a view to enhance light effects and reduce electricity consumption, the Company has finalised a lighting plan under which Garden lights, Lobby lights and Porch lights are changed from time to time in order to have energy saving.

—

All Air Handling Units have been fitted with thermostatic controls; supply and exhaust blowers are controlled from a centralized Control Panel for effective operation. Automatic timers have been fitted for various supply and exhaust blowers to avoid wasteful running and have a programmed cycle of operations; all party rooms, conference halls and Restaurants have been fitted with dimmerstat controls; maximum possible area has been covered with fluorescent lightings; proper utilisation of waste steam from laundry and kitchen areas has worked out and saving of water also planned.

—

I nstallation of capacitor panel for transformers

—

Replacement of old pumps/cold rooms/deep freezers with new energy efficient pumps/cold rooms/deep freezers.

(b)

The implementation of Energy Conservation Programme:The company has been continuously studying fuel and utility bills; measuring the results of tracking energy consumptions and the objectives of record keeping; having commitment to and accountability for energy conservation at all levels of the operations of all the hotels; established an energy conservation committee; making a walk-through inspection of the hotel to identify wasteful conditions; implementing changes in operating procedures by instructions to the staff regarding wasteful energy practices, setting realistic energy saving objectives.

(c)

Energy conservation efforts are being greatly enhanced by a strong planned Preventive Maintenance Programme. Each month the Maintenance Department compiles an Energy Consumption Report for the hotel that is a valuable energy conservation tool. Discussions with regard to the same are held on a continuous basis to achieve better results.

(d)

I nternal energy audit's are carried out to balance total energy inputs with use to identify al I of the energy streams into a facility and to quantify energy use according to discrete functions.

(e)

During renovation of the properties the process of changing (renewal) from incandescent bulbs to low wattage compact fluorescent lamps is being done substantially to conserve energy thereby cutting energy costs, at the same time keeping the aesthetic value of the properties in tact and still going on.

15

BHABAT HOTELS LIMITED (f)

As a result of the aforesaid measures taken and firm commitment of the management, considerable saving in Electrical unit, LDO & HSD has been achieved. The company continues to make all efforts to keep consumption at optimum level.

(2) TECHNOLOGY ABSORPTION

As required under Rule 2 of the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988, to the extent applicable, the steps taken by the company in Technology Absorption are detailed in the prescribed Form B which is annexed hereto as Annexure 'B' and forms part of this report. (3) FOREIGN EXCHANGE EARNING & OUTGO (a)

The company has earned foreign exchange equivalent to Rs. 13679.98 lacs (Previous Year Rs. 18101.62 lacs) which is about 40.12% (Previous Year 41.93%) of the total revenue earned by the Company from Hotel operations during the year.

(b)

The foreign exchange outgo including for capital goods for hotel projects during the year is equivalent to Rs.3444.85 lacs (Previous Year Rs.5098.72 lacs), which is around 25.18% (Previous Year 28.17%) of the total foreign exchange earnings of the company during the year.

ANNEXURE-B FORMB (See Rule 2)

Form for disclosure of particulars with respect to absorption RESEARCH & DEVELOPMENT In view of the nature of business of the company, the required information in the prescribed format are considered to be not applicable to the company. TECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATION

1.

The company has adopted the Worldwide standards with regard to uniform accounting system. Hotel's entire operation both front of the house and back of the house are fully computerised. To ensure the security of the guests and property as such, all the hotels have installed within the premises a Closed Circuit Security Surveillance System. The company has adopted the latest technology especially with regard to Engineering Design Standards to ensure against the hazards of fire and the like. The company has made successful efforts to adopt latest Human Resource Development Techniques which are being used extensively to motivate and train staff and to ensure that the standards are constantly met and continuously further improved. The Company has installed new Telephone Exchanges, which are specially designed for Hotels and are considered to be the latest in the world. This has resulted into more efficient and improved service to the Hotel Guests.

16

The company has already installed Reverse Osmoses system to provide best quality of portable water to the hotel Guests. The hotel is continuously innovating by implementing new ideas with a view to enhance the facilities that can be enjoyed by its guests. 2.

As a result of the effective utilisation of technological resources, the company has been able to achieve high level of customers satisfaction, operational efficiency and development of variety of standards and skills in a short span of time after having become operational.

3.

The company has acquired a variety of International standards and skills specially with regard to the facilities offered to the guests, fire safety systems, life safety standards and more importantly the service standards. In addition to the above, the company is constantly developing: — Training modules which develop and fine-tune employees skills with regard to leadership, communication, supervision and general management. — Hands on Culinary Skills Training for specialised cuisines, focusing on hygiene, foods preparation and food service. —

Assistance with setting up minimum standards of operations, in terms of quality of service and facilities provided in a hotel.

— Assistance with developing marketing strategies and relating the same with planning employee performance. — Company has installed new Generators to provide continuous power supply. — Company is already replacing all the hot and cold water pipe lines of the properties and also enhanced hot water chlorifiers.

17

BHADAT HOTELS LIMITED ANNEXURE-C INFORMATION AS PER SECTION 217 (2A) READ WITH THE COMPANIES (PARTICULARS OF EMPLOYEES) RULES, 1975 AND FORMING PART OF THE DIRECTORS REPORT FOR THE FINANCIAL YEAR ENDED 31 ST MARCH 2009 S.No

Employee Name

A

EMPLOYED FOR THE YEAR

1

MadhavSikka

51

2

Arvind Sachdev

3

Remuneration

Nature of Employment

Nature of Duties

Qualification

Experience

Date of Last Employment Employment

% of shares

Sr Vice PresidentFinance & Systems

3,272,277

Service

Finance & Systems

Chartered Accountant

24 years

2-Apr-07

Group Chief Financial Officer , India Today Group (1 year)

M

56

Sr Vice PresidentFinance

3,217,773

Service

Finance

Chartered Accountant

31 years

Wul-82

Delhi Automobile Pvt Ltd, Delhi (4 years)

0.02%

VijayWanchoo

50

Sr Vice PresidentDevetopment

3,117,672

Service

Development

Diploma in Hotel Management

29 years

1-Mar-07

ITC(tyear)

M

4

Anjali Upadhyay

47

General Manager-

2,566,266

Service

HR

MBA-HRDS International Marketing

21 years

25JUI-07

Keane India Ltd (3 years)

N

5

Surajit Sengupta

51

Vice PresidentProjects

3,206,833

Service

Projects

BScEngg Civil (REC, Kurukshetra)

22years

7-Apr-08

Era Constructions(lyear)

tt

6

Captain V.K.Singh

39

Chief Pilots Director Aviation

5,412,327

Service

Aviation

Qualified Pilot

21 years

30-NOV-02

GovtofJSK(lyear),

M

7

VivekShukla

35

General ManagerDeH

3,410,500

Service

Operations

Diploma in Hotel Management

18 years

13-Apr-05

Hyatt International, Mumbai ( 2 years, Executive Assistant Manager Rooms)

M

8

Sudhendu M Pandit

47

General ManagerMumbai

3,261,999

Service

Operations

Diploma in Hotel Management

27 years

21-NOV-07

Chelsea Tower Hotel Apartments, Dubai ( 1 year, General Manager)

M

9

ShrikantWakharkar

41

General ManagerGte

3,034,092

Service

Operations

Diploma in Hotel Management

20 years

l-Nov-07

Taj Group of Hotels ( 1 7 years)

M

10

Mark Wilson

46

Executive ChefMumbai

3,614,101

Contractual

Food Production

Qualified Chef

23 years

15-jan-O?

Serena Hotel, ( 2 years, Executive Chef) Pakistan Radisson Hotels International (Resigned in Sept 2007)

M

B

EMPLOYED FOR PART OF THE YEAR

1

ShobhuMathew

46

Vice PresidentSales & Marketing

42,808

ServKe

Sales S Marketing

M.Sc (Economics)

20 years

25-Mar-09

Tristar(lyear)

M

2

Renu Kapoor

57

Sr Vice PresidentSales & Marketing

3225094

Service

Sales i Marketing

Diploma in communcation, advertising & public relations

28 years

Wan-08

Claridges(2yrs) (Resigned on 5th March 2009)

M

3

Harinder Singh

55

General ManagerBangalore

2,958,066

Service

Operations

Diploma in Hotel Management

21 years

S-Jun-07

Surover Park Plaza( 1 year) (Resigned on 20th February 2009)

N

4

Farhat Jamal

52

Presidents Chief Operating Officer

9,157,466

Service

Operations

Diploma in Hotel Management

31 years

B-Oct-07

Taj Mahal S Palace TowersApollo Bunder, Mumbai ( 30 years) ( Resigned on 21 st Nov 2008)

M

5

Calwin Edwin Oatway

51

Head Corporate FSB

991,703

Contractual

Food Production

MBA (BM), Certifeid Trainer, Certified Chef

34 years

3-F6D-09

1 2

Remuneration comprises of Salary .Allowances and company's contribution to Provident Fund None of the employees mentioned above is a relative of any Director of the Company

Age

Designation

18

Marriot (I year )

M

S.R. BATLIBOI & ASSOCIATES Chartered Accountants Auditors' Report

To The Members of Bharat Hotels Limited 1. We have audited the attached Balance Sheet of Bharat Hotels Limited ('the Company') as at March 31,2009 and also the Profit and Loss Account and the Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit. 2.

We 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.

3.

As required by the Companies (Auditor's Report) Order, 2003 (as amended) issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4.

Further to our comments in the Annexure referred to above, we report that: i. We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit; ii. 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 ; iii The Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account; iv. In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956; v. On the basis of the written representations received from the directors, as on March 31,2009, and taken on record by the Board of Directors, we report that none of the directors is disqualified as on March 31, 2009 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956; and vi. In our opinion and to the best of our information and according to the explanations given to us, the said accounts 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; a) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2009;

19

DHADAT HOTELS Li b) in the case of the Profit and Loss Account, of the profit for the year ended on that date; and c) in the case of Cash Flow Statement, of the cash flows for the year ended on that date. For S.R. BATLIBOI & ASSOCIATES

Chartered Accountants per Raj Agrawal Partner Membership No.: 82028 Place: Gurgaon Date : 27th June, 2009

20

Annexure referred to in paragraph 3 of our report of even date Re: Bharat Hotels Limited ('the Company') (i)

(a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets. (b) All fixed assets were physically verified by the management in the previous year in accordance with a planned programme of verifying them once in three years which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. As informed, no material discrepancies were noticed on such verification. (c) There was no substantial disposal of fixed assets during the year.

(ii)

(a) The management has conducted physical verification of inventory at reasonable intervals during the year. (b) The procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business. (c) The Company is maintaining proper records of inventory and no material discrepancies were noticed on physical verification.

(iii) (a) The following are the particulars of loans granted by the Company to companies, firms and other parties covered in the Register maintained under Section 301 of the Companies Act, 1956: SI. Name of Party No.

Relationship with Company

Maximum Amount Rs.

Year end Balance Rs.

1.

Jyoti Limited

Subsidiary

40,903,127

40,903,127

2.

Udaipur Hotels Limited

Subsidiary

97,219,422

97,219,422

3.

Apollo Zipper Limited

Subsidiary

536,697,857

536,697,857

4.

Prime Cellular Private Limited

Subsidiary

240,037,501

240,037,501

5.

Prima Buildwell Private Limited

Subsidiary

40,342,662

40,342,662

6.

Bharat Hotels (Thailand) Company Limited

Subsidiary

618,755

618,755

7.

Premium Farm Fresh Produce Limited

Company in which director is interested

1,500,000

(b) In our opinion and according to the information and explanations given to us, the rate of interest and other terms and conditions for such loans are not prima facie prejudicial to the interest of the Company. (c) In respect of loans granted, repayment of the principal amount and interest is as stipulated. (e) As informed, the Company has not taken any loans, secured or unsecured from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. (iv) 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 major

21

BHABAT HOTELS LIMITED weakness has been noticed in the internal control system in respect of these areas. (v)

(a) According to the information and explanations provided by the management, we are of the opinion that the particulars of contracts or arrangements referred to in section 301 of the Act that need to be entered into the register maintained under section 301 have been so entered. (b) In respect of transactions made in pursuance of such contracts or arrangements exceeding value of Rupees five lakhs entered into during the financial year, because of the unique and specialized nature of the items involved and absence of any comparable prices, we are unable to comment whether the transactions were made at prevailing market prices at the relevant time .

(vi) The Company has not accepted any deposits from the public. (vii)

In our opinion, the Company has an internal audit system commensurate with the size and nature of its business.

(viii) To the best of our knowledge and as explained, the Central Government has not prescribed maintenance of cost records under clause (d) of sub-section (1) of section 209 of the Companies Act, 1956 for the products of the Company. (ix)

(a) Undisputed statutory dues including provident fund, investor education and protection fund, employees' state insurance, income-tax, sales-tax, wealth-tax, service tax, customs duty, excise duty and cess have generally been regularly deposited with the appropriate authorities though there has been a slight delay in a few cases. (b) According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, investor education and protection fund, employees' state insurance, income-tax, wealthtax, service tax, sales-tax, customs duty, excise duty, cess and other undisputed statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable. (c) According to the records of the Company, the dues outstanding of income-tax, sales-tax, wealth-tax, service tax, customs duty, excise duty and cess on account of any dispute, are as follows:

Name of the statute

Nature of dues

Amount (Fte)

Period to which the amount relates

Forum where dispute is pending

Income tax Act, 1961

Income tax

3,591 ,599

Previous year 2001-02

Delhi High Court

Income tax Act, 1961

Income tax

36,937

Previous year 2006-07

Commissioner of Income tax (Appeals)

Finance Act, 1994

Service tax

8,942,266

2004-05 to 2007-08

Commissioner of Service tax

Finance Act, 1994

Service tax

4,947,499

2006-07

Commissioner of Service tax

Finance Act, 1994

Service tax

8,475,508

2007-08

Commissioner of Service tax

(x)

The Company has no accumulated losses at the end of the financial year and it has not incurred cash losses in the current and immediately preceding financial year.

(xi)

Based on our audit procedures and on the information and explanations given by the management, we are of the opinion that the Company has not defaulted in repayment of dues to any bank or debenture holder. The Company has no outstanding dues in respect of a financial institution.

22

xii)

According to the information and explanations given to us and based on the documents and records produced 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.

(xiii) In our opinion, the Company is not a chit fund or a nidhi / mutual benefit fund / society. Therefore, the provisions of clause 4(xiii) of the Companies (Auditor's Report) Order, 2003 (as amended) are not applicable to the Company. (xiv) In our opinion, the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Companies (Auditor's Report) Order, 2003 (as amended) are not applicable to the Company. (xv)

According to the information and explanations given to us, the Company has given guarantee for loans taken by others from banks; the terms and conditions whereof in our opinion are not prima-facie prejudicial to the interest of the Company.

(xvi) Based on the information and explanations given to us by the management, term loans were applied for the purpose for which the loans were obtained, though idle/surplus funds which were not required for immediate utilization have been gainfully invested in fixed deposits with scheduled banks. The maximum amount of idle/surplus fund invested during the year was Rs 1,299,901,542, of which Rs. 1,160,198,000 was outstanding at the end of the year. (xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that no funds raised on short-term basis have been used for long-term investment. (xviii) The Company has not made any preferential allotment of shares to parties or companies covered in the register maintained under section 301 of the Companies Act, 1956. (xix) According to the information and explanations given to us, during the period covered by our audit report, the Company had issued 1000 debentures of Rs. 1,000,000 each. The Company has created security in respect of debentures issued except for 250 debentures of Rs. 1,000,000 each which have been issued towards the year end. As informed to us, the Company is in the process of creating security for these debentures. (xx) The Company has not raised any money through a public issue during the year. (xxi) We have been informed that one of the employees of the Company had misappropriated funds amounting to Rs. 270,193 and sold rooms at low rates causing a loss of Rs. 1,512,400 during the year under audit. The Company has filed a case and the matter is pending in the High Court of Delhi. The Company has withheld full and final settlement amounting Rs. 18,358, has created provision against remaining amount and has also not recognized the revenues. Other than the above, based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and as per the information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the course of our audit. For S.R. BATLIBOI & ASSOCIATES Chartered Accountants

per Raj Agrawal Partner Membership No.: 82028 Place: Gurgaon Date : 27th June, 2009

23

BHABAT HOTELS LIMITED Balance Sheet as at March 31 , 2009 Schedules

As at March 31, 2009 Rs.

As at March 31, 2008 Rs.

759,911,990 8,883,019,841

759,911,990 6,230,295,497

9,642,931,831

6,990,207,487

3,316,753,960 396,431,702

2,108,691,137

3,713,185,662

2,108,691,137

496,477,767 490,431,165

486,119,022 458,587,130

14,343,026,425

10,043,604,776

10,306,693,185 1,473,070,432

6,223,763,653 1,331,669,579

8,833,622,753

4,892,094,074

1,190,957,767 137,599,844

359,313,421 56,984,312

10,162,180,364

5,308,391 ,807

8

1,609,267,884

1,324,355,716

9 10 11 12 13

90,509,570 150,311,430 1,781,313,751 62,975,449 2,096,790,751

96,367,031 291,880,761 3,084,654,087 73,001,719 1,752,225,581

4,181,900,951

5,298,129,179

872,435,759 755,539,268

904,442,742 986,271,694

1,627,975,027

1,890,714,436

2,553,925,924

3,407,414,743

SOURCES OF FUNDS

Shareholders' funds 1 2

Share capital Reserves and surplus Loan funds Secured loans Unsecured loans

3 4

Deferred payment liabilities (refer note 14 (a) and (b) under schedule 25) Deferred tax liability (net)

5

TOTAL APPLICATION OF FUNDS

Fixed Assets Gross block Less : Accumulated depreciation/amortization

6

Net block Capital work in progress (including capital advance Rs. 453,072,002 (previous year Rs. 173,975,266)) Preoperative expenditure pending allocation

7

Investments Current assets, loans and advances Inventories Sundry debtors Cash and bank balances Other current assets Loans and advances (A) Less: Current liabilities and provisions

Current liabilities Provisions

15

(B)

Net current assets

(A-B) 24

Schedules

Miscellaneous expenditure (to the extent not written off or adjusted)

16

TOTAL Notes to Accounts

As at March 31,2009 Rs.

As at March 31,2008 Rs.

17,652,253

3,442,510

17,652,253

3,442,510

14,343,026,425

10,043,604,776

25

The schedules referred to above and notes to accounts form an integral part of the Balance Sheet.

As per our report of even date For S. R. BATLIBOI & ASSOCIATES Chartered Accountants

For and on behalf of the Board of Directors of Bharat Hotels Limited

per Raj Agrawal Partner Membership No. 82028

Jyotsna Suri Chairperson and Managing Director

Arvind Sachdev Sr. Vice President Finance Place : Gurgaon Date : 27th June, 2009

Place : New Delhi Date : 27th June, 2009

25

Ramesh Suri Hanuwant Singh Dr. M.Y. Khan Vinod Khanna Lalit Bhasin Directors

Madhav Sikka Sr. Vice President Finance & Systems

Vijay K. Verma Sr. Vice President & Company Secretary

DHADAT HOTELS LIMITED Profit and Loss Account for the year ended March 31 , 2009 Schedules

For the year ended For the year ended March 31 , 2009 March 31 , 2008 Rs. Rs.

INCOME Rooms, food, beverages, banquet and other services Other income

17 18

3,409,219,836 575,315,477

4,316,893,849 433,955,953

3,984,535,313

4,750,849,802

315,605,171 566,173,698 2,085,530,720 230,939,977 6,532,677 319,173,916

375,598,023 526,453,043 2,133,273,868 193,637,774 80,230,236 241 ,865,758

3,523,956,159

3,551,058,702

460,579,154 5,759,608

1,199,791,100 63,412,147

454,819,546

1,136,378,953

Current tax (after adjusting reversal of provision Rs. 12, 303,493, previous year Rs. 3,047,546 )

125,196,507

433,047,546

Deferred tax charge/(credit) (including deferred tax credit amounting to Rs. nil, previous year Rs. 1,1 12, 845 for earlier years)

31,844,035

(16,472,870)

Fringe benefit tax (including Rs. nil, previous yearRs. 1,047,321 for earlier years)

10,640,630

14,829,055

Total tax expense

167,681,172

431,403,731

Profit for the year after tax

287,138,374

704,975,222

Balance brought forward from previous year Less: Loss of Khajuraho Hotels Limited upto the year ended March 31 , 2007 Less: Interest charged from Khajuraho Hotels Limited in 2006-07 Add : Transfer from reserve for bad and doubtful debts

2,371,640,692

1,858,422,948

Profit available for appropriation

2,658,779,066

TOTAL EXPENDITURE

Consumption of food and beverages Personnel expenses Operating and other expenses Depreciation/amortization Depreciation/amortization for earlier years Financial expenses

19 20 21 6 6 22

TOTAL

Profit before tax and prior period items Prior period items

23

Profit for the year before tax Tax expense

26

65,360,437 9,434,769 31 ,000,000 2,519,602,964

Schedules

For the year ended March 31,2009 Rs.

For the year ended March 31,2008 Rs.

75,991,199 12,914,704 16,224,208 60,000,000

75,184,642 12,777,630 — 60,000,000

2,493,648,955

2,371,640,692

3.78

9.38

Appropriations: Proposed final dividend Tax on proposed dividend Transfer to debenture redemption reserve Transfer to general reserve Surplus carried to Balance Sheet Earnings per share Basic and Diluted [Nominal value of shares Rs. 10 (previous year Rs. 10)]

24

Notes to Accounts

25

The schedules referred to above and the notes to accounts form an integral part of the Profit and Loss Account. As per our report of even date For S. R. BATLIBOI & ASSOCIATES Chartered Accountants

For and on behalf of the Board of Directors of Bharat Hotels Limited

per Raj Agrawal Partner Membership No. 82028

Jyotsna Suri Chairperson and Managing Director

Arvind Sachdev Sr. Vice President Finance Place : Gurgaon Date : 27th June, 2009

Place : New Delhi Date : 27th June, 2009

27

Ramesh Suri Hanuwant Singh Dr. M.Y. Khan Vinod Khanna Lalit Bhasin Directors

Madhav Sikka Sr. Vice President Finance & Systems

Vijay K. Verma Sr. Vice President & Company Secretary

BHABAT HOTELS LIMITED Cash Flow Statement for the year ended March 31, 2009 For the year ended March 31,2009 Rs.

For the year ended March 31,2008 Rs.

454,819,546

1,136,378,953

237,472,654 6,839,831 151,990

(37,827,446)

273,868,010 4,407,826 26,352,469 (11,335,723) 26,236,869 1,489,609 2,451,565 (26,711,469)

7,421,818

23,852,249

8,763,853

1,621,116

(258,410,190) 7,024,464 283,173,212

(248,504,550)

Operating Profit before working capital changes

700,407,336

1,465,864,145

Movements in working capital: Decrease / (Increase) in sundry debtors Decrease/(Increase) in inventories Decrease / (Increase) in loans and advances Decrease / (Increase) in other current assets Increase / (Decrease) in current liabilities Increase/(Decrease) in provisions

125,942,734 5,857,461 33,417,553 7,616,624 (33,581,176) 37,842,255

(57,617,028) 21,466,355 43,270,659 5,104,914 102,795,275 33,591,184

Cash generated from operations Direct taxes paid (net of refunds)

877,502,787 (264,083,192)

1,614,475,504 (608,276,200)

Net cash from operating activities

613,419,595

1,006,199,304

(2,595,124,146) 16,364,180 (284,912,168)

(979,525,785) 93,507,492 (30,000,000)

A. Cash flow from operating activities Net profit before taxation and after prior period expenses Adjustments for: Depreciation/amortization Loss on sale of fixed assets Fixed assets written off/discarded Profit on sale of the assets Bad debts written off Advances written off Unrealized foreign exchange loss/(gain) Excess provision/ credit balances written back Provision for doubtful debts Provision for doubtful advances Interest income Debenture issue expense Interest expense Amortization of Voluntary retirement scheme expenditure

8,237,600

(17,259,996)

237,535,615 18,221,606

B. Cash flow used in investing activities Purchase of fixed assets* Proceeds from sale of fixed assets Investment in a subsidiary

28

For the year ended March 31, 2009 Rs.

Amalgamation of Khajuraho Hotels Limited Interest received Loans to subsidiaries Movement in investment in long term fixed deposits with banks Net cash used in investing activities

For the year ended March 31, 2008 Rs. 492,208

260,819,836

240,271,499

(526,262,349)

(214,118,696)

2,665,487,207

(1,332,754,516)

(463,627,440)

(2,222,127,798)

C. Cash flow from financing activities Proceeds from issue of equity shares Proceeds from borrowings Repayment of borrowings Interest paid Deferred payment liabilities Dividends paid Tax on dividend paid Share issue expenses Term loan expenses Debenture issue expenses

1,640,000,000 1,809,152,804

200,000,000

(186,610,492)

(221,984,191)

(295,744,972)

(227,207,393)

10,358,745 (75,184,642)

(71,891,199)

(12,777,630)

(12,217,909) (27,528,200)

(16,854,000) (20,800,010)

Net cash from financing activities

1,211,539,803

1,279,171,108

Net increase/ (decrease) in cash and cash equivalents (A+B+C)

1,361,331,958

63,242,614

414,084,712

350,851,560

Cash and cash equivalents at the beginning of the year Adjustment for net increase / (decrease) in cash and cash equivalents of Khajuraho Hotels Limited for the year ended March 31, 2007 Cash and cash equivalents at the end of the year

(9,462) 1,775,416,670

414,084,712

March 31,2009 Rs.

March 31,2008 Rs.

3,415,575

7,314,098

260,668,834

46,600,757

On current accounts

86,621,482

133,771,461

On EEFC accounts

9,073,120

19,991,169

Components of cash and cash equivalents as at Cash on hand Cheques in hand Balances with scheduled banks:

29

BHABAT HOTELS LIMITED March 31,2009 Rs. On cash credit account

March 31,2008 Rs.

91,277,183

On dividend accounts On deposit accounts - Fixed deposits - Margin money held as security Less : Long term deposits Add :Unrealized loss/(gain) on foreign currency cash and cash equivalents

726,035

495,055

1,333,812,055 86,996,650 1,781,313,751 (5,753,267)

2,719,802,146 65,402,218 3,084,654,087 (2,671,240,474)

(143,814)

671,099

1,775,416,670

414,084,712

Note: *1. Additions to fixed assets are stated inclusive of movements of capital work-in-progress (including capital advances) and pre operative expenditure pending allocation and the same has been treated as part of investing activities. 2. The cash flow statement has been prepared under the indirect method as set out in the Accounting Standard 3 "Cash Flow Statement" issued by the Institute of Chartered Accountants of India. As per our report of even date For S. R. BATLIBOI & ASSOCIATES Chartered Accountants

For and on behalf of the Board of Directors of Bharat Hotels Limited

per Raj Agrawal Partner Membership No. 82028

Jyotsna Suri Chairperson and Managing Director

Arvind Sachdev Sr. Vice President Finance Place: Gurgaon Date : 27th June, 2009

Place: New Delhi Date : 27th June, 2009

30

Ramesh Suri Hanuwant Singh Dr. M.Y. Khan Vinod Khanna Lalit Bhasin Directors

Madhav Sikka Sr. Vice President Finance & Systems

Vijay K. Verma Sr. Vice President & Company Secretary

Schedules to the Accounts

As at March 31,2009 Rs.

As at March 31,2008 Rs.

1,000,000,000

1,000,000,000

759,911,990

759,911,990

Schedule 1 : Share capital Authorized 100,000,000 Equity shares (previous year 100,000,000) equity shares of Rs.10/- each Issued and Subscribed 75,991,199 (previous year 75,991,199) equity shares of Rs. 10/- each fully paid Note: Of the above: (i) 1,500,000 (previous year 1,500,000) equity shares of Rs. 10 each were issued consequent to the amalgamation of a subsidiary company, (ii) 5,533,333 (previous year 5,533,333) equity shares of Rs. 10 each were issued as bonus shares by capitalization of profit, (iii) 47,927,466 equity shares (previous year 47,927,466) of Rs. 10 each were issued as bonus shares by capitalization of Securities Premium, (iv) 10,399,998 equity shares (previous year 10,399,998) of Rs. 10 each were issued by way of Global Depository Receipts (GDR) through an international offering.

Schedule 2 : Reserves and surplus Capital reserve (A) Balance as per last account Additions on amalgamation of a subsidiary company

161,928,625 16,573,040 178,501,665

178,501,665 178,501,665

Securities premium account (B) Balance as per last account Additions during the year Less: Utilized for share issue expenses Less: Utilized for debenture issue expenses (net of tax)

General reserve (C) Balance as per last account Additions: Transferred from Profit and Loss Account

2,920,153,140

1,348,681,340 1,599,000,000 27,528,200

13.775.546 2,906,377,594

2,920,153,14CT

700,000,000 60,000.000 760,000,000

760,000,000 60,000,000 820,000,000

Reserve for bad and doubtful debts (D) Balance as per last account Less: Set off against bad and doubtful debts as per last account

31

—

31,000,000

—

(30,576,417)

423,583

BHABAT HOTELS LIMITED As at March 31,2009 Rs. Less: Transferred to Profit and Loss Account Addition: Transferred from provision for doubtful debts

As at March 31,2008 Rs. (31,000,000) 30,576,417

Debenture redemption reserve (E) Additions: Transferred from Profit and Loss Account

16,224,208 16,224,208

Revaluation reserve (F) Additions during the year (refer note 18 under schedule 25) Less : Transferred to Profit and Loss acount

2,468,267,419 2,468,267,419

Profit and Loss Account (G)

2,493,648,955

2,371,640,692

Total (A+B+C+D+E+F+G)

8,883,019,841

6,230,295,497

Schedule 3 : Secured loans Debentures (refer note 6,7,8 & 9 below) 100012.30% Secured Redeemable Non-Convertible Debentures of Rs.1,000,000 each

1,000,000,000

Loans from banks (refer note 1,2,3,4 & 5 below) Term loans from banks Interest accrued and due on above Cash credit facilities

2,204,230,000

2,090,643,350 18,047,787

112,523,960 3,316,753,960

2,108,691,137

Note: 1. Out of above, term loans from banks of Rs. 1,289,000,000 are secured by : (a) Equitable mortgage of land and building and all fixed assets both existing and to be created in future of Mumbai,Goa and Ahmedabad (under construction) units . (b) Hypothecation of plant and machinery and all other movables of Mumbai, Goa, New Delhi, Ahmedabad (under construction) units, Udaipur Hotels Limited and Apollo Zipper India Limited, subsidiaries of the Company. (c) Hypothecation of movable fixed assets, furniture and fixtures, cutlery, stores and spares and assignment of leasehold rights of land, building and plant and machinery of Bengaluru unit. (d) Hypothecation of the aircraft. Personal guarantee of the promoter directors limited to outstanding loan amount from scheduled banks of Rs. 20,026,000 (previous year Rs. 100,386,000). Corporate guarantee by a shareholder i.e. Deeksha Holding Limited to the extent of outstanding loan amount from scheduled banks Rs. 1,139,030,000 (previous year Rs. 1,139,030,000). In respect of land at Goa, being owned by a shareholder i.e. Deeksha Holding Limited, the Company has obtained approval for mortgaging. 2. Term loans from banks of Rs. 615,230,000 are secured by : (a) Equitable mortgage of land and building and all fixed assets both existing and to be created in future of Mumbai, Goa and Ahmedabad (under construction) units. (b) Hypothecation of all movable assets, stores and spares, accessories and receivable at Bengaluru, Ahmedabad (under

32

As at March 31,2009 Rs.

As at March 31,2008 Rs.

construction) units and Apollo Zipper India Limited, a subsidiary of the Company and assignment of leasehold rights of land, building and plant and machinery of Bengaluru unit. (c) Appropriate form of security of assets to be acquired out of term loan for new projects. Corporate guarantee by a shareholder i.e. Deeksha Holding Limited to the extent of outstanding loan amount from scheduled banks Rs. 615,230,000 (previous year Rs.642,399,998). In respect of land at Goa, being owned by a shareholder i.e. Deeksha Holding Limited, the Company has obtained approval for mortgaging 3. Term (a) (b) (c)

loans from banks of Rs. 300,000,000 are secured by : Equitable mortgage of land of Jaipur unit (under construction). Hypothecation of plant and machinery and all other movables of Jaipur unit (under construction) Appropriate form of security of assets to be acquired out of term loan for new projects.

4. Cash credits limits are secured by hypothecation of current assets at Mumbai, Goa, New Delhi units and book debts of the company as a whole. 5. Term loans repayable within one year Rs. 194,825,000 6. (i) (ii)

(previous year Rs.186,610,492).

Debentures of Rs. 750,000,000 are redeemable at par in three annual installments starting from December, 2011. Debentures of Rs 250,000,000 are redeemable at par in three annual installments starting from February, 2012.

7. Debenture of Nominal value Rs. 1,000,000,000 are held by trustee for the debenture holders. 8. Subsequent to year end, Debenture amounting to Rs. 750,000,000 have been secured by the land at Mouje Maharajapura, Kadi Taluka, Gujrat and mortgage of immovable assets at Mumbai and Goa units and hypothecation of movable assets of Mumbai and Goa units. Company is in the process of getting charge registered in favour of trustee for debentures amounting to Rs. 250,000,000. 9. Non convertible debentures have been listed on the Bombay stock exchange (wholesale debt market).

Schedule 4 : Unsecured loans Short-term loans from a bank

396,431,702 396,431,702

Schedule 5 : Deferred tax liability (net) Deferred tax liabilities Differences in depreciation and other differences in block of fixed assets as per tax books and financial books

552,365,669

519,165,161

Gross deferred tax liabilities

552,365,669

519,165,161

12,433,133 20,532,515 14,443,474

9,014,488 14,054,406 8,059,001

14,525,382

29,450,136

Gross deferred tax assets

61,934,504

60,578,031

Deferred tax liability (net)

490,431,165

458,587,130

Deferred tax assets Provision for doubtful debts and advances Provision for gratuity Provision for leave compensation Effect of expenditure debited to profit and loss account in the current year but allowed for tax purposes in following years

33

Schedule 6: Fixed assets

OtJ

Land freehold

Land leasehold

Building freehold

Building •

Plant and machinery

Furniture and fixtures

Computers

Speedboats

Alrcrafts

Vehicles

Software

Total

leasehold

Previous Year

401,075,153

610,365,232

1,409,662,559

1,175,529,903

1,771,866,447

384,471,112

59,424,992

10,339,248

270,405,685

113,458,103

17,165,219

6223,763,653

5,736,456,550

-

-

-

-

-

-

-

-

-

-

-

-

2,468267,419 1,737267,942

a

Gross block As at April 1,2008 Assets acquired on amalgmation (1 ) Additions on account of revalution (refer note 18 undet Schedule 25) Additions

-

-

2,030,436,110

-

437,831,309

-

-

-

184,507,770

-

2,686,363

69,173

163272,110

40,824,204

5,452,786

2,283,972

-

94,636,704

20,213,345

629,237

-

610,365,232

1,847,896,259

1,175,599,076

1.840,501,853

405,081,971

64,24*541

10,339248

6,960,642

101,385,566

3,346,694

Deletions/adjustments

-

As at March 31,2009

2,616,019,033

-

1,323,886,122

141,895,096

723,054,877

7240,260

9,329,154

4,811,031

31,540

122,605,829

377,642,870

1,594291,807

115,887,332

26,462*33

10,306,693,185

6223,763,653

11,998,329

74,605,466

13,653,978

1,331,669,579

1,312,323,074

-

-

-

6,455,901

10,918.605

3,587,596

240,802,671

277,601,416

3,094,784

31,540

99,401,818

264,710,812

Depreciation / amortization As at April 1,2008 Assets acquired on amalgmation ( 1 )

213,142,116

696,010,709

178,394,757

32.171,322

-

-

-

-

-

23,104,923

21,370,133

97,387,730

30,391,271

9,028,425

195,451

-

76,640,819

18,994,670

444,554

-

11,930,030

124,295,038

234,512,249

716,757,620

189,791,358

40,755,193

4,077,679

51,311,944

82,429287

17,210,034

1,473,070,432

1,331,669,579

5,548,418

25,408,576

26,176,160

106,449,465

59,079,600

9205,322

1,582,466

11,998,329

25,848,635

6,304,445

277,601,416

(232,348,153)

4,969,388

For the period Deletions /adjustments

-

As at March 31, 2009

-

730,985

39,313,615

For previous year -depredation charged/provided Net block As at March 31, 2009

2,616,019,033

598,435202

1,723,601221

941,066,827

1,123,744233

215290,613

23,493,348

6261,569

1,542,979,863

33,458,045

9252,799

8333,622,753

4,891094,074

As at March 31, 2008

401,075,153

603,404,590

1,308276,993

962,387,787

1,075,855,738

206,076,355

27253,670

6,992,554

258,407,356

38,852,637

3,511,241

4,892,094,074

4,424,133,476

Notes: 1. 2. 3. 4.

Taken over on amalgmation consequent to the Scheme of Amalgmation of Khajuraho Hotel Limited , including additions of Rs. 141,895,096 to gross block and Rs. 6,455,901 to accumulated depreciation. Depreciation for year includes Rs. 3,330,017 (previous year Rs. 3,733,406) transferred to the Preoperative expenditure pending allocation under Schedule 7. Depreciation for rhe year includes Rs. 6,532,677 (previous year Rs. 80,230,236) provided for earlier years. Land includes certain agricultural land acquired for Rs. 140,011,188 (previous year Rs. 140,011,188). The Company has initiated the process for necessary approvals for change in land use from appropriate authorities.

As at March 31, 2009 Rs.

As at March 31,2008 Rs.

56,984,312

23,713,543

10,504,086 417,355 323,439 3,330,017 20,028,486 69,262 616,402 1,084,119 1,048,702 292,548 8,351,573 15,558,030 1,205,665 863,969

2,478,966 119,622

Schedule 7 : Preoperative expenditure pending allocation Balance as per last account Additions during the year: Salaries, wages and bonus Contribution to provident fund and other payments Workmen and staff welfare expenses Depreciation/ amortization Lease rent Power, fuel and water Repairs and maintenance - others Insurance Rates and taxes Communication costs Traveling and conveyance Legal and professional fees Sub contracting expenses Freight and cartage Miscellaneous expenses Bank charges Interest on Term Loan

2,705,955 17,900,289 141,284,209

Less: expensed off during the year Less : Interest earned (net of tax expense of Rs. 1,897,161 (previous year Nil))

3,733,406 2,468,241 166,147 142,498 1,071,884 8,173,809 389,216 12,502,517 570,488 13,588 289,721 3,129,690 58,963,336 1,979,024

3,684,365

Closing balance

137,599,844

56,984,312

310,789,478

310,789,478

63,757,829

63,757,829

521,308,409

521,308,409

Schedule 8: Investments Long term investments in subsidiary companies Unquoted , trade- fully paid up (At cost) Jyoti Limited (62,998 (previous year 62,998) equity shares of Rs. 100 each) (refer note 12 (a) under schedule 25) Udaipur Hotels Limited (607,370 (previous year 607,370) equity shares of Rs. 10 each) (refer note 12 (b) under schedule 25) Apollo Zipper India Limited (727,832 (previous year 727,832) equity shares of Rs. 10 each) (refer note 12(c) and 16 under schedule 25) Prime Cellular Limited (3,984,000 (previous year 3,984,000) equity shares of Rs. 100 each) (refer note 12 (d) under schedule 25)

35

398,400,000

398,400,000

BHADAT HOTELS LIMITED As at March 31,2009 Rs.

As at March 31,2008 Rs.

Prima Buildwell Private Limited (3,010,000 (previous year 3,010,000) equity shares of Rs. 10 each)

30,100,000

30,100,000

Long term investments in subsidiary companies Unquoted , trade- partly paid up (At cost) Bharat Hotels (Thailand) Company Limited (5,399,300 equity shares of Baht 100 each, Baht 40 paid up)

284,912,168 1,609,267,884

1,324,355,716

50,764,574

58,868,100

12,468,228 27,276,768

11,473,285 26,025,646

90,509,570

96,367,031

3,582,617 25,695,027

8,433,031 24,795,126

1,665,406 145,063,407 498,800

1,006,810 282,440,920

176,505,257

316,675,887

26,193,827 26,193,827

24,795,126

150,311,430

291,880,761

3,415,575 260,668,834

7,314,098 46,600,757

Schedule 9: Inventories (at lower of cost and net realizable value) Stores, cutlery, crockery, linen, provisions and others (including stock in transit Rs nil, previous year Rs. 380,875) Food and beverage (excluding liquor and wine) (including stock in transit Rs. nil, previous year Rs. 82,947) Liquor and wine

Schedule 10: Sundry debtors Debts outstanding for a period exceeding six months Unsecured, considered good Unsecured, considered doubtful Other debts Secured, considered good Unsecured, considered good Unsecured, considered doubtful Less: Provision for doubtful debts

24,795,126

Schedule 11: Cash and bank balances Cash in hand Cheques on hand

36

Balances with scheduled banks: On current accounts On EEFC accounts On cash credit account On dividend accounts On deposit accounts - Fixed deposits - Margin money held as security

As at March 31,2009 Rs.

As at March 31,2008 Rs.

86,621,482 9,073,120 726,035

133,771,461 19,991,169 91,277,183 495,055

1,333,812,055 86,996,650 1,781,313,751

2,719,802,146 65,402,218 3,084,654,087

50,133,456 1,613,299 11,228,694

52,543,102

62,975,449

73,001,719

955,819,325

429,556,976

65,304,503

78,376,611

17,119,632 185,183,879 10,110,330 11,005,899 124,118,136 5,748,784 732,765,233

17,119,632 199,133,441 500,000 17,722,779 131,950,211 5,554,316 874,037,490

2,107,175,721 10,384,970

1,753,951,456 1,725,875

2,096,790,75?

1,752,225,58?

536,697,857

278,822,459

417,155

66,872

Schedule 12: Other current assets Interest accrued on deposits with banks Assets held for sale Unbilled revenue

20,458,617

Schedule 13: Loans and advances (Unsecured, considered good, except where otherwise stated) Loans to subsidiaries Advances recoverable in cash or kind or for value to be received (including Rs.1,263,854 considered doubtful, previous year Rs. 104,759) Inter-corporate deposits (including Rs.9,121,116 considered doubtful, previous year Rs. 1,621,116) Advance rent Share application money pending allotment Balances with customs, excise, etc. Security deposits VAT credit receivable Advance tax, tax deducted and collected at source Less: Provision for doubtful advances Included in Loans and Advances are: i. Dues from companies under the same management (Maximum amount outstanding during the year Rs. 536,697,857 (previous year Rs. 278,822,459)) ii. Due from an officer of the Company (Maximum amount outstanding during the year Rs.417,155 (previous year Rs. 225,000)) 37

BHAEAT HOTELS LIMITED As at March 31, 2009 Rs.

As at March 31,2008 Rs.

Schedule 14: Current liabilities Sundry creditors - Due to directors - Due to others * Advance from customers Deferred income Investor Education and Protection Fund shall be credited by unpaid dividend (as and when due) Unpaid dividend Sundry deposits payable Interest accrued but not due on debentures Other liabilities

*a) Total outstanding dues of micro enterprises and small enterprises included in sundry creditors b) Total outstanding dues other than micro enterprises and small enterprises included in sundry creditors

879,808 527,761,818 182,145,573 15,334,040

464,000 531,803,704

725,922 68,631,624 5,476,027 71,480,947

495,055 72,608,376 105,368,797

872,435,759'

904,442,742

187,233,103 6,469,707

Nil

Nil

527,761,818

531,803,704

60,407,518 42,493,305 563,732,542 75,991,199 12,914,704

41,348,651 23,709,917 833,250,854 75,184,642 12,777,630

755,539,268

986,271,694

Schedule 15: Provisions Provision for gratuity Provision for leave compensation Provision for taxation Proposed dividend Tax on proposed dividend

Schedule 16 : Miscellaneous expenditure (to the extent not written off or adjusted) Voluntary retirement scheme expenditure (A) Opening balance Amortization Closing balance

— — ~

18,221,606 18,221,606

Ancillary cost of term loans (B) Opening balance Additions during the year Transferred to Pre operative expenditure pending allocation

3,442,510 16,854,000 2,644,257

3,129,690

Closing balance

17,652,253

3,442,510

Total (A+B)

17,652,253

3,442,510

38

6,572,200

For the year ended March 31, 2009 Rs.

For the year ended March 31,2008 Rs.

Schedule 17: Rooms, food, beverages, banquet and other services Turnover (Gross) Room and apartment sales Food and beverage (excluding liquor and wine) Liquor and wine Banquet rentals Other services - Telephone and telex 44,289,614 - Others 126,776,526 Membership programme revenue Total (A) Less: Excise duty Value added tax Service tax Luxury tax Entertainment tax Total (B) Turnover (net) (A-B)

Schedule 18: Other income Maintenance charges Rent Aircraft charter hire charges Interest - Bank deposits (Tax deducted at source Rs.34,768,833, previous year Rs. 36,665,171) - Others (Tax deducted at source Rs. 18,941,320, previous year Rs. 10,057,325) Profit on sale of assets Exchange fluctuation (net) Excess provision/ credit balances written back Miscellaneous income

39

3,130,172,116 1,210,849,613 212,631,831 124,775,939

2,389,161,478 991,189,343 182,563,906 96,847,218 55,312,629 132,908,444 171,066,140 22,635,559

188,221,073 22,931,416

3,853,463,644

4,889,581.988'

2,310,827 145,694,108 50,611,224 244,755,067 872,582

1,930,716 159,927,288 65,442,057 344,495,958 892,120

444,243,808

572,688,139"

3,409,219,836

4,316,893,849

62,679,501 77,161,816 18,450,900

60,121,331 62,476,121 5,994,825

162,042,417

205,773,528

96,367,773 — 98,398,088 39,315,423 20,899,559

42,731,022 11,335,723

575,315,477

433,955,953

26,711,469 18,811,934

BHADAT HOTELS LIMITED For the year ended March 31,2009

Rs.

For the year ended March 31,2008 Rs.

Schedule 19: Consumption of food and beverage * a) Consumption of food and beverage (excluding liquor and wine) Opening stock Add: Stock acquired on amalgamation with Khajuraho Hotels Limited Add: Purchases

11,473,285

10,615,404

280,461,259

224,684 329,905,655

Closing stock

291,934,544 12,468,228

340,745,743 11,473,285

279,466,316"

329,272,458

b) Consumption of liquor and wine Opening stock Add: Purchases

26,025,646 37,389,977

24,036,538 48,314,673

Closing stock

63,415,623 27,276,768

72,351,211 26,025,646

36,138,855

46,325,565

315,605,171

375,598,023

460,063,959 10,510,447 20,370,394 22,627,766 32,018,032 20,583,100

429,111,361 7,845,211 22,546,485 16,535,210 28,894,565 21,520,211

566,173,698

526,453,043

148,115,740 137,168,504 367,872,517 7,351,279 47,730,717 18,239,344

190,177,554 186,364,280 372,770,247 3,074,201 49,666,751 16,679,755

(A)

(B) * net of recoveries from employees

(A+B)

Schedule 20: Personnel expenses Salaries, wages and bonus Staff recruitment & training expenses Gratuity expenses Leave compensation expenses Contribution to provident fund and other payments Workmen and staff welfare expenses

Schedule 21: Operating and other expenses Consumption of stores, cutlery, crockery, linen, provisions and others Lease rent Power, fuel and water Aircraft fuel Banquet and decoration expenses Membership programme expenses

40

Repair and maintenance - Buildings - Plant and machinery - Aircraft - Others Royalty and marketing fees Rates and taxes Insurance Communication costs Printing and stationery Traveling and conveyance Advertisement and business promotion Commission and brokerage Sub contracting expenses Membership and subscriptions Legal and professional fees Bad debts and advances written off Auditor's remuneration - Audit fee Freight and cartage Exchange difference (net) Donations Loss on sale of fixed assets Fixed assets written off/discarded Provision for doubtful debts and advances Directors fees and commission Miscellaneous expenses

For the year ended March 31,2009 Rs.

For the year ended March 31,2008 Rs.

276,120,331 165,967,747 763,469 53,751,391 82,450,354 75,308,964 23,172,470 22,914,030 24,984,861 133,775,654 140,287,929 85,423,486 63,956,707 27,502,284 73,982,016 8,237,600

301,680,919 147,087,098 2,461,517 45,535,065 106,902,736 72,015,955 23,231,106 27,677,077 28,767,495 113,032,607 71,778,562 117,348,312 73,164,991 22,074,326 65,838,116 27,726,478

4,963,500 5,385,026

5,056,200 5,039,280 6,538,976 6,322,940 3,889,275

52,757,278 6,839,831

151,990 16,185,671 5,650,000 8,520,030

25,473,365 790,000

2,085,530,720

2,133,273,868

257,131,063 30,581,507 22,384,815 3,434,862 240,317 5,401,352

216,202,134

319,173,916

241,865,758

63,750 647,700

436,250 13,182,800 4,460

15,108,684

Schedule 22: Financial expenses Interest - on term loans from banks - on debentures - on other credit facilities scheduled banks - on income tax - others Bank charges

7,448,308 13,885,173 4,330,143

Schedule 23: Prior period items Consumption of stores, spares and provisions Lease rent Power fuel and water 41

BHADAT HOTELS LIMITED For the year ended March 31, 2009 Rs. Banquet and decoration expenses Repair and maintenance Rates and taxes Commission and brokerage Advertisement and business promotion Communication costs Salaries, wages and bonus Directors fees Membership and subscriptions Traveling and conveyance Legal and professional fees Loss on sale of fixed assets Fixed assets written off/discarded Exchange difference (net) Miscellaneous expenses Interest- others Interest- income tax Bank charges

155,000 1,732,520 341,516 57,500 9,471

For the year ended March 31,2008 Rs. 755,610 4,357,485 7,081,384 607,335 250,662 4,319,050 240,000

246,000 152,526 105,603

270,686 222,472 2,000,864

462,232

168,360 518,551 26,352,469 2,820,914 1,439,228

169,357 5,759,608

63,412,147

287,138,374

704,975,222

75,991,199

75,184,642

3.78

9.38

287,138,374

704,975,222

75,991,199

75,184,642

3.78

9.38

Schedule 24: Earnings per share ('EPS') Computation of basic earnings per share Net profit as per Profit and Loss Account Weighted average number of equity shares in calculating basic EPS Basic earnings per share in Rupees of face value of Rs. 10 Computation of diluted earning per share Net profit as per Profit and Loss Account used for diluted EPS Weighted average number of equity shares in calculating diluted EPS Diluted earnings per share in Rupees of face value of Rs. 10

42

Schedule 25: Notes to the Accounts 1.

Nature of Operations: Bharat Hotels Limited, ('the Company') is incorporated and engaged in the business of operating hotels. The company has properties in nine locations (including three under construction) and plans to open others either directly or through its subsidiaries and joint ventures.

2.

Statement of Significant Accounting Policies a) Basis of preparation: The financial statements have been prepared to comply in all material aspects with the Notified Accounting Standards by Companies Accounting Standards Rules, 2006 and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared under the historical cost convention on an accrual basis. The accounting policies have been consistently applied by the Company and are consistent with those used in the previous year. b) Use of estimates: The preparation of financial statements are in conformity with generally accepted accounting principles that requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the results of operations during the reporting year end. Although these estimates are based upon management's best knowledge of current events and actions, actual results could differ from these estimates. c) Fixed Assets: Fixed assets are stated at cost (or revalued amounts, as the case may be), less accumulated depreciation and impairment losses, if any. Cost comprises the purchase price and any attributable costs of bringing the asset to its working condition for its intended use. Borrowing costs relating to acquisition of fixed assets which take substantial period of time to get ready are also included to the extent they relate to the period till such assets are ready to be put to use. d) Depreciation: Depreciation is provided on Straight Line Method (SLM) over the estimated useful life of the fixed assets (except referred below) which is in line with the corresponding rates prescribed under Schedule XIV of the Companies Act, 1956. Depreciation on additions is provided on pro-rata basis from the date on which the assets have been put to use and individual assets acquired for less than Rs. 5.000/- are depreciated @ 100% per annum. In the following case, the estimated useful life of the assets determined by the Company has resulted in depreciation rates being higher than that provided under Schedule XIV. Rates Schedule XIV (SLIW Rates (SIM) Fabricated luxury tents (included in Buildings) 25% 1.63% Assets taken on lease are amortized over the period of primary lease or useful life, whichever is lower. Repairs, replacements and all renovation are charged to the Profit and Loss Account, except in situations where these result in a long term economic benefit, in which case these are capitalized. e) Impairment: The carrying amounts of assets are reviewed at each balance sheet date to determine, if there is any indication of impairment based on internal / external factors. An impairment loss is recognized if the carrying

43

DHADAT HOTELS LIMITED amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the asset's net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value at the weighted average cost of capital. 1) Intangible assets: Intangible assets have finite useful lives and are measured at cost. The Company has considered computer software in the nature of software licenses as intangible assets, and is amortized over the license period or three years, being their expected useful economic lives, whichever is lower. g) Leases: Where the Company is the lessee Leases where the lessor effectively retains substantially all the risks and benefits of ownership of the leased item, are classified as operating leases. Operating lease payments are recognized as an expense in the Profit and Loss Account on a straight-line basis over the lease term. Where the Company is the lessor Assets leased under an operating lease are included in fixed assets. Lease income is recognized in the Profit and Loss Account on a straight-line basis over the lease term. Costs, including depreciation are recognized as an expense in the Profit and Loss Account. Initial direct costs such as legal costs, brokerage costs, etc. are recognized immediately in the Profit and Loss Account. h) Investments: Investments that are readily realizable and intended to be held for not more than a year are classified as current investments. All other investments are classified as long-term investments. Current investments are carried at lower of cost and fair value determined on an individual investment basis. Long-term investments are carried at cost. However, provision for diminution in value is made to recognize a decline other than temporary in the value of the investments. i) Inventories: Stores and spares inventory of the Company comprises cutlery, crockery, linen, other store items food and beverage, liquor and wine items in hand, which are valued at lower of cost or net realizable value. Cost is determined on First in first out basis. Circulating stock of crockery and cutlery is charged to the profit and loss account as consumption. Unserviceable / damaged / discarded stocks and shortages observed at the time of physical verification are charged off to Profit & Loss Account. Net realizable value is the estimated selling price in the ordinary course of the business, less estimated costs necessary to make the sale. Inventory of food and beverage items in hand include items used for staff cafeteria and is charged to consumption, net of recoveries, when issued. j) Revenue recognition: Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. Revenue from hotel operations: Revenue from hotel operations comprise sale of rooms and apartments, food and beverages, liquor and wine, banquet rentals and other services relating to hotel operations including telecommunication, laundry, business

44

centre, health centre, etc. Revenue is recognized when the significant risks and rewards of ownership of the goods have passed to the buyer, which coincides with the rendering of the services and are disclosed net of allowances. Taxes, such as excise duty, value added tax, luxury tax, entertainment tax and service tax is deducted from the gross revenue. Aircraft charter: Revenue from hiring of the aircraft is recognized as and when services are used for chartering. Rent:

Income from rent is recognized over the period of the contract on an equitable straight line basis. Maintenance charges: Amounts collectible as maintenance charges are recognized over the period of the contract, on an accrual basis. Corresponding costs are recorded as incurred. Membership programme revenue: Membership revenue is recognized pro rata over the period of the membership term. Joining fee is recorded as income on sale of membership card. Interest:

Revenue is recognized on a time proportion basis taking into account the amount outstanding and the rate applicable. k) Preoperative expenditure pending allocation: Expenditure directly relating to construction activity is capitalized. Indirect expenditure incurred during construction period is recognized as part of the indirect construction cost to the extent to which the expenditure is related to construction or is incidental thereto and is charged to preoperative expenditure pending allocation. Other indirect expenditure (including borrowing costs) incurred during the construction period which is not related to the construction activity nor is incidental thereto is charged to the Profit and Loss Account. Income earned during construction period is deducted from the total of the indirect expenditure during construction period. I) Borrowing costs: Borrowing costs include interest and commitment charges on borrowings, amortization of costs incurred in connection with the arrangement of borrowings and finance charges under leases. Costs incurred on borrowings, directly attributable to development projects, which take a substantial period of time to complete, are capitalized and all other borrowing costs are recognized in the Profit and Loss Account in the period in which they are incurred. m) Foreign currency translation: (i) Initial Recognition: Foreign currency transactions are recorded in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of the transaction. (ii) Conversion: Foreign currency monetary items are reported using the closing rate. Non-monetary items which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction; and non-monetary items which are carried at fair value or other similar valuation denominated in a foreign currency, are reported using the exchange rates that existed when the values were determined.

45

DHADAT HOTELS LIMITED (Hi) Exchange differences: Exchange differences arising on the settlement of monetary items or on reporting monetary items at rates different from those at which they were initially recorded during the year or reported in previous financial statement are recognized as income or as expenses in the year in which they arise. n) Employee benefits: i. Retirement benefit in the form of Provident Fund is a defined contribution scheme and the contributions are charged to the Profit and Loss Account of the year when the contributions to the respective funds are due. There are no other obligations other than the contribution payable to the Provident Fund authorities. ii. Gratuity liability is a defined benefit obligation and is provided for on the basis of an actuarial valuation on projected unit credit method made at the end of each financial year. iii. Long term compensated absences are provided for based on actuarial valuation. The actuarial valuation is done as per projected unit credit method at the end of the each financial year. iv. Actuarial gains/losses are immediately taken to profit and loss account and are not deferred. v. Payments made under the Voluntary Retirement Scheme are charged to the Profit and Loss Account over a period of five years, and the balance amount is disclosed under 'Miscellaneous expenditure' to the extent not written off or adjusted. o) Income taxes: Tax expense comprises of current, deferred and fringe benefit tax. Current income tax and fringe benefit tax is measured at the amount expected to be paid to the tax authorities in accordance with the Income-tax Act, 1961. Deferred income taxes reflect the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years. Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date. Deferred tax assets are recognized only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized. In situations where the Company has unabsorbed depreciation or carry forward tax losses, all deferred tax assets are recognized only if there is virtual certainty supported by convincing evidence that they can be realized against future taxable profits. At each Balance Sheet date, the Company re-assesses unrecognized deferred tax assets. It recognizes deferred tax assets to the extent that it has become reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available against which such deferred tax assets can be realized. The carrying amount of deferred tax assets are reviewed at each balance sheet date. The Company writesdown the carrying amount of a deferred tax asset to the extent that it is no longer reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available against which deferred tax asset can be realized. Any such write-down is reversed to the extent that it becomes reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available. p) Segment Reporting Policies: Identification of the segments: The Company's operating businesses are organized and managed separately according to the nature of products and services provided. Inter-segment transfers

The Company accounts for inter -segment sales and transfers as if the sales or transfers were to third parties at current market prices.

46

Allocation of common costs: Common allocable costs are allocated to each segment according to the relative contribution of each segment to the total common costs. Unallocated items: The corporate and other segments include general corporate income and expense items which are not allocated to any business segment. q) Earnings per share: Basic earnings per share are calculated by dividing the net profit or loss for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the period. The weighted average number of equity shares outstanding during the period are adjusted for events of bonus issue; bonus element in a rights issue to existing shareholders; share split; and reverse share split (consolidation of shares), if any. For the purpose of calculating diluted earnings per share, the net profit or loss for the year attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares, if any. r) Provision, Contingent liabilities and Contingent Assets: As required by Accounting Standard 29 - 'Provisions, Contingent Liabilities and Contingent Assets' (AS 29), issued by the ICAI, provision is recognized when the Company has a present obligation as a result of a past event and it is probable that an outflow of resources will be required to settle the obligation and when a reliable estimate of the amount of the obligation can be made. Provisions are not discounted to its present value and are determined based on best estimates required to settle the obligation at the balance sheet date. Contingent liabilities are recognized only when there is a possible obligation arising from past events due to occurrence or non 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 of resources or where a reliable estimate of the obligation cannot be made. The obligations are reviewed at each balance sheet and adjusted to reflect the current best estimates. Contingent assets are not recognized in the financial statements. s) Cash and cash equivalents: Cash and cash equivalents in the balance sheet comprise cash at bank and on hand and short-term investments with a maturity of three months or less.

3.

Segmental Information Business segments: The Company operates primarily in the segment of Hotels operations (representing sale of rooms and apartments, food and beverages, banquet rentals and other services relating to hotel operations including telecommunication, laundry, business centre, health centre, etc.), Aircraft charter operations along with minor segments (representing renting of premises). Common allocable costs are allocated to each segment according to the relative contribution of each segment to the total common costs. All other costs and expenses are reflected in the corporate segment. Segments have been identified and reported based on the nature of the services, the risks and returns, the organization structure and the internal financial reporting system.

47

BHADAT HOTELS LIMITED (Amount in Rs.) Hotel operations

Aircraft charter operations

For the year ended March 31,2009

For the year ended March 31,2008

External sales

3.409,219,836

Other income

327,352,387

Other activities

Eliminations

For the year ended March 31,2009

For the year ended March 31,2008

For the year ended March 31,2009

For the year ended March 31.2008

For the year ended March 31,2009

4,316,893,849

18,450,900

5,994,825

139541517

122.597,452

-

304,469,682

89^23*75

647,498

893,994

-

3,736,572*23

4,621,363,531

107,474*75

5,994,825

14(^488515

123,491,446

-

(38*38.212)

91,129*38

74,618.361

Total

For the year ended March 31,2008

For the year ended March 31,2009

For the year ended March 31,2008

-

3567512,053

4,445,486,126

-

417,023*60

305,363,676

-

3584,535,313

4,750,849,802 1,326,099,928

Revenue

Total Segment prof it

684.060*70

1*89,719.779

25*39*79

-

-

800,448,787

Unallocated corporate expenses

-

-

-

-

-

-

-

-

345529*41

189,720,975

Tax expense

-

-

-

-

-

-

-

-

167,681,172

431,403,731

Profit for the year after tax

-

-

-

287,138574

704,975,222

13,009,089.490

10,483,822,891

1376,567,134

271,415*31

831*98519

772,142,133

496571,177

470,541,043

15*20583,966

11,056,839,212

Unallocated corporate assets

-

-

-

-

-

-

-

-

732,765*33

874,037,490

Total

-

-

-

-

-

-

-

-

15553,349,199

11,930,876,702 3,564,311,469

Segment assets

-

-

3,326,567,712

121,495,000

-

166.355.000

-

555,132508

541,929.800

496571,177

470541,043

5,185,000,011

Unalkxated corporate labilities

-

-

-

-

-

-

-

-

1,143,069,610

1,379,800,256

Total

-

-

-

-

-

-

-

-

6528,069,621

4,944,111,725

Segment liabilities

5,004,744,180

-

Capital expenditure towards acquisition of fixed assets

1,017367,502

799,770,027

1,631,660518

278,401,685

-

-

-

-

2,649527520

1,078,171,712

Depreciation / amortization

196,414,095

248,313,830

39513515

11,998,329

5574561

17*89*57

-

-

240502,671

277,601,416

31*63,102

75,310,724

-

-

-

31*63,102

75,310,724

Non cash expenses other than depreciation and amortization

-

-

-

Geographical Segments: The operating interests of the company are confined to India in terms of its operations. Accordingly, the figures appearing in these financial statements relate to the company's single geographical segment, being operations in India. 4.

Related Party Disclosures: a) Name of related parties and their relationship: Subsidiary companies

Jyoti Limited Udaipur Hotels Limited Apollo Zipper India Limited Prime Cellular Limited Prima Buildwell Private Limited Bharat Hotels (Thailand) Company Limited

Key managerial personnel

Mrs. Jyotsna Suri, Chairperson cum Managing Director

Relatives of the key managerial personnel

Ms. Deeksha Suri, daughter of Mrs. Jyotsna Suri Ms. Divya Suri Singh, daughter of Mrs. Jyotsna Suri Mr. Keshav Suri, son of Mrs. Jyotsna Suri

Enterprises owned or significantly influenced by key management personnel or their relatives

Deeksha Holding Limited (DHL) Deeksha Human Resource Initiatives Limited (DHRIL) Jyotsna Holding Private Limited

48

-

Mercantile Capital & Financial Services Private Limited Prima Telecom Limited Prima Realtors Private Limited Premium Farm Fresh Produce Limited Premium Exports Limited Responsible Builders Private Limited Rohan Motors Limited Special Protection Services Private Limited Subros Limited Premium Holdings Limited Cavern Hotels and Resort FZCO. FIBCOM India Limited

b) Loans made to the subsidiaries are on mutually agreed terms. c) Transaction with above parties for sale, purchase of goods and fixed assets, rendering or availing of services are in ordinary course of business. d) The term loan (as discussed under Schedule 3) from banks availed by the company has been secured by way of a personal guarantee of Directors and corporate guarantee of Deeksha Holding Limited. e) The guarantees amounting to Rs.75,084,199 (previous year Rs. 67,505,917) given by the Company for the related parties are given in normal course of business and related parties have provided counter guarantees for such guarantees. f)

Udaipur Hotels Limited and Apollo Zipper India Limited have pledged their assets for loan taken by Bharat Hotels Limited.

(g) Transactions with the related parties (Rs.): Particulars

Subsidiaries

Key Management Personnel

For the year ended March 31,2009

For the year ended March 31,2008

For the year ended March 31,2009

Relatives of Key Management Personnel

Enterprises owned or significantly influenced by key management personnel or their relatives

For the year For the year ended March ended March 31,2008 31,2009

For the year ended March 31,2008

For the year For the year ended March ended March 31,2009 31,2008

_

-

-

_

-

_

10,152,729

12,340,134

19,469

-

-

-

-

-

185^34

8,289,363

Sale of fixed assets

841,766

77,758

-

-

-

-

-

2,329,169

Lease rent paid

500,000

500,000

2,073,600

900,000

900,000

12,310,286

11,793,027

Sale of goods /services Purchase of goods

Maintenance charges received

2,073,600

-

-

-

-

-

-

2,356,327

2,457,485

469,091,792

198,733,435

-

-

-

-

-

1,500,000

72,933,062

31,599,256

-

-

-

-

-

-

2,103,750

-

-

-

-

-

10,029,899

21,423,798

Professional charges paid

-

-

-

120,000

120,000

1,686,970

-

Remuneration

-

-

19,348,000

15,646,452

3,709,254

1,720,000

-

-

-

-

-

-

-

2,081,250

Loan providecf(received) Interest received Services received

Security deposit received Security deposit paid/ refunded

-

-

-

-

-

-

150,000

3,500,000

Reimbursement of expenditure paid

-

-

-

-

-

-

8,392,081

12,155,075

6,667,688

4,757,214

-

-

-

-

-

-

1,160,072

818,797

284,912,168

-

-

-

-

-

-

-

-

-

-

-

-

-

6,924

-

Reimbursement of expenditure received Revenue share Investment in shares Amount written off

49

BHADAT HOTELS LIMITED List of material transactions incurred during the year ended March 31,2009 and March 31, 2008 i) Subsidiaries: Name of Company

For the year ended March 31, 2009

For the year ended March 31 , 2008

Jyoti Limited -Lease rent paid -Sale of goods / services -Loan provided/(received)

500,000 1,292,500 917,653

500,000

Udaipur Hotels Limited - Sale of fixed assets -Sale of goods / services -Loan provided/(received) -Interest received

841,766 830,719 (4,131,246) 11,063,202

7,465,398 9,679,407

Apollo Zipper India Limited -Loan provided/(received) -Interest received

219,856,961 49,157,535

173,685,553 20,753,877

Prime Cellular Limited -Loan provided/(received) -Interest received

217,307,650 9,807,574

11,864,798 959,970

34,522,019 2,904,751

3,414,787 206,002

618,755 284,912,168

-

For the year ended March 31, 2009

For the year ended March 31 , 2008

19,348,000 2,073,600

15,646,452 2,073,600

For the year ended March 31, 2009

For the year ended March 31 , 2008

2,379,067 300,000

1 ,360,000 300,000

Prima Buildwell Private Limited -Loan provided/(received) -Interest received Bharat Hotels (Thailand) Company Limited -Loan provided/(received) -Investment in Shares

2,302,899

77,758

ii) Key Management Personnel: Name Ms. Jyotsna Suri -Remuneration -Lease rent paid iii) Relatives of Key Management Personnel: Name Ms. Deeksha Suri -Remuneration -Lease rent paid

50

Name Ms. Divya Suri -Professional charges paid -Lease rent paid Mr. Keshav Suri -Remuneration

For the year ended March 31, 2009

For the year ended March 31, 2008

120,000 600,000

120,000 600,000

1,330,187

360,000

iv) Enterprises owned or significantly influenced by key management personnel or their relatives: Name of Company

For the year ended March 31. 2009

For the year ended March 31 . 2008

Deeksha Holding Limited -Services received -Sale of goods / services -Security deposited provided -Purchase of goods - Sale of fixed assets -Expenditure incurred by BHL and reimbursed by DHL -Lease rent paid -Payment received by BHL on behalf of DHL -Maintenance charges received -Revenue sharing

6,667,688 12,310,286 15,199,363 293,203 1,160,072

1,521,845 2,329,169 4,757,214 11,666,777 12,155,075 304,173 819,797

Deeksha Human Resource Initiatives Limited -Services received -Expenditure incurred by DHRIL and reimbursed by BHL -Maintenance charges received

11,184,216 8,392,081 196,417

14,593,717 7,803,421 203,411

Jyotsna Holding Private Limited -Maintenance charges received -Amount written off

24,365 6,924

107,852

Mercantile Capital & Financial Services Private Limited -Maintenance charges received

72,749

74,272

181,750

106,623

(1,500,000)

1 ,500,000 601 ,988 122,987

Prima Telecom Limited -Sale of goods / services Premium Farm Fresh Produce Limited -Loan provided/deceived) -Reimbursement of expenditure -Sale of goods / services -Share application money paid -Share application money refunded

532,653 2,784,861 150,000 185,834

852,500 40,000,000 40,000,000

Premium Exports Limited -Lease rent paid Responsible Builders Private Limited -Maintenance charges received

51

2,181,565

-

126,250

162,956

170,219

DHADAT HOTELS LIMITED For the year ended March 31, 2009

Name of Company Rohan Motors Limited -Sale of goods / services -Maintenance charges received -Services received Subros Limited -Sale of goods / services -Maintenance charges received -Security deposit received -Security deposit refunded

For the year ended March 31, 2008

356,409 171,557

359,401 152,378 3,653

5,028,461 1,358,818

8,622,211 1,434,496 2,081,250 3,500,000

FIBCOM India Limited -Sale of goods / services -Maintenance charges received

76,262

947,347 10,683

-

6,767,518

Hemkunt Service Station Private Limited -Purchase of goods Balance Outstanding (Rs.)

For the year ended March 31 , 2008

For the year ended March 31, 2009 Receivables Name of Company Subsidiaries Jyoti Limited Udaipur Hotels Limited Apollo Zipper India Limited Prime Cellular Limited Prima Buildwell Private Limited Bharat Hotels (Thailand ) Company Limited

40,903,127 97,219,422 536,697,857 240,037,501 40,342,662 618,755

Payables

Receivables

Payables

- 40,014,426 - 92,001,310 - 278,822,458 - 15,144,673 3,574,109 -

-

Key Management Personnel Ms. Jyotsna Suri

-

2,168,000

-

464,000

Relatives of Key Management Personnel Ms. Deeksha Suri Mr. Keshav Suri

-

960,667 707,667

-

59,800 31 ,700

Enterprises owned or significantly influenced by key management personnel or their relatives Deeksha Holding Limited Deeksha Human Resource Initiatives Limited Jyotsna Holding Private Limited Prima Realtors Private Limited

—

1,855,594 2,139,586 450,987 80,666

-

7,515,391 1,175,260 456,194 80,666

52

"

For the year ended March 31, 2009 Receivables

Payables

Receivables

Payables

— —

327,253 — — 22,887 812,543 — 8,796,823 —

— 70,179 2,051 ,988 — — 728,580 — —

322,968 — —

Mercantile Capital & Financial Services Private Limited Prima Telecom Limited Premium Farm Fresh Produce Limited Responsible Builders Private Limited Rohan Motors Limited Special Protection Services Private Limited Subros Limited FIBCOM India Limited 5.

For the year ended March 31 , 2008

852,500 — — — — 807,128

21,790 875,943 — 10,936,957 149,756

Leases In case of assets taken on non cancellable lease Operating Lease: The Company has entered into Commercial leases for office premises and residence of its employees. The leases have a life of 1 year to 3 years. There is no escalation clause in the lease agreements for the primary lease period. There are no restrictions imposed by the lease arrangement, and there are no sub-leases. The hotel premises at Bengaluru are on an operating lease. The lease rent is payable at 16.5 % of turnover (previous year: 16.5%) subject to a minimum payment which is increased by 20% after every 5 years. The lease term is for 30 years and renewable for further 30 years at the option of the Company. There are no restrictions imposed by lease arrangements. There are no subleases. The hotel premises at Srinagar are on an operating lease. The lease rent payable is Rs. 500,000 p.a. The lease term is up to November 22,2096. There are no restrictions imposed by lease arrangements. There are no subleases.

Lease payments for the year Minimum lease payments: Not later than one year Later than one year but not later than five years Later than five years

For the year ended March 31,2009 Rs.

For the year ended March 31,2008 Rs.

96,500,835

110,576,157

59,613,468 244,102,210

56,093,864 231,516,494

1,764,790,570

1,829,509,320

In case of assets given on lease Operating Lease: The Company has given certain office premises on lease. The lease term is for 3 years. There is no escalation clause in the lease agreements. There are no restrictions imposed by lease arrangements.

Lease rental for the year 53

For the year ended March 31,2009 Rs.

For the year ended March 31,2008 Rs.

70,996,052

54,991,072

BHAKAT HOTELS LIMITED

Minimum lease rentals receivable: Not later than one year Later than one year and not later than five years Later than five years

For the year ended March 31,2009 Rs.

For the year ended March 31, 2008 Rs.

74,865,077 57,756,812 —

70,844,726 99,918,749 —

6. Contingent Liabilities not provided for: a) Income Tax matters: (i) While passing the orders for the income tax assessments, for Assessment year 1988-89 and thereafter, the Assessing Officer has enhanced the taxes payable on account of interest free refundable deposits for World Trade Centre and World Trade Tower by treating these as taxable receipts. This matter has been decided in favour of the Company by CIT (Appeals) and Income Tax Appellate Tribunal ('ITAT). Income tax department has filed appeals against the orders in the High Court of Delhi. Total amount disputed (excluding interest and penalties) in the matter aggregates to Rs. 173,133,092 (previous year Rs. 173,133,092). (ii) For Assessment Years 1988-89 to 2002-03, the Assessing Officer has disallowed claims made by the Company in tax return relating to depreciation on increase in cost of assets due to exchange fluctuation, depreciation on foreign cars (except for AY 1999-00 and 2002-03) and plumbing and sanitary items, depreciation on Commercial building viz. World Trade Centre and World Trade Tower; treating loan received as deemed dividend and disallowance on late deposit of PF/ESI (except for AY 1999-00 and 2002-03). These matters have been decided in favour of the Company by CIT (Appeals) and the ITAT. The Income tax department has filed appeals against the orders in the High Court of Delhi. Total amount disputed (excluding interest and penalties) in the matter aggregates to Rs. 590,074,788 (Previous year Rs. 591,564,179). (iii) For the Assessment Year 2002-03, the Assessing Officer has disallowed commission paid for bank guarantees. CIT (Appeals) and the ITAT have upheld the order of the Assessing Officer. The Company has filed an appeal in the High Court of Delhi. Total amount disputed (excluding penal interest and penalties) in the matter is Rs. 2,034,900 (Previous year Rs. 2,034,900). (iv) For the assessment years 2003-04 to 2006-07, the Assessing Officer has disallowed certain claims i.e. depreciation on Commercial buildings viz. World Trade Centre and World Trade Tower, treating loan as deemed dividend, disallowance on late deposit of PF/ESI, addition in respect of interest paid on loan, depreciation on foreign cars, addition on account of expenditure incurred for projects under construction, Commission paid on Bank Guarantees. Matters are pending at the level of ITAT. Total amount disputed (excluding interest and penalties) in the matter aggregates to Rs. 27,291,182 (previous year Rs. 41,043,040). (v) For the assessment year 2007-08, the Assessing Officer has disallowed claim of depreciation on commercial buildings viz. World Trade Centre and World Trade Tower. The Company has filed appeal before the Commissioner of Income tax (Appeals) which is pending as on date. 54

Total amount disputed (excluding interest and penalties) in the matter is Rs. 28,867 (previous year Rs. Nil). The management, based upon expert analysis, believes that the Company has good chances of success in the above cases from (i) to (v). b) Guarantees As at March 31,2009 Rs.

As at March 31, 2008 Rs.

i. Corporate guarantee given to a Bank on behalf of a subsidiary towards term loan facility. The Company has also pledged the shares of the subsidiary of the face value of Rs. 6,073,700 (Investment value Rs. 63,757,829) with the Bank as security.

30,000,000

30,000,000

ii. Corporate guarantee given to a Bank on behalf of a body corporate (related party - Premium Farm Fresh Limited) towards loan facilities.

30,000,000

30,000,000

iii. Corporate guarantee given on behalf of a Subsidiary to Customs authorities

15,084,199

7,505,917

c) Certain employees have filed cases in the courts/ legal forums against termination/ suspension and have sought relief. The liability, if any, with respect to these claims is not currently ascertainable and in the opinion of the management, would not have material effect on these financial statements. d) The Employees' State Insurance Corporation, under section 85-B of the Employee State Insurance Act, 1948 had claimed damages from the Company for non-payment of the amount due in respect of contribution for the Airport Restaurant, Bengaluru, amounting to Rs. 84,109 (previous year Rs. 84,109). The ESI Court has upheld the contention of the Company and repealed the claim. The ESI Corporation has filed an appeal before the Hon'ble High Court of Bengaluru and the matter is pending for admission. e) Stamp duty and registration fee thereon on a property of the Company is pending final assessment before Revenue Commissioner, Madhya Pradesh. The assessing officer i.e. the District Collector, has assessed the duty & fee being Rs 18,928,453. Management has assessed the liability not to exceed Rs. 18,928,453 and made full provision there against and considers, based on expert analysis, that no further provision would be necessary at this stage. f) Amounts payable to a vendor are accounted for to the extent valid claims have been received together with underlying supporting documents, remaining unsupported claims, in managements view, do not require any provision at this stage. g) Shares of Bharat Hotels (Thailand) Company Limited held as investments partly paid and uncalled liability on such investment is Baht 323,958,000 (equivalent to Rs. 479,814,194) (previous year Nil). h) Demand by Custom Authorities against import of aircraft for Rs. 66,805,372 (previous year Nil). i) The Company has entered into an arrangement with a vendor for purchase of an aircraft for Rs. 1,350,175,000 for which it has paid advance equivalent to 10% of the above value. Subsequent to this, in view of the present financial and economic crisis being experienced all over the world, the Company is negotiating for deferment of the existing payment terms and delivery schedule of the above arrangement. While the Company was

55

BHADAT HOTELS LIMITED negotiating it has also received a written notice of levy of liquidated damages equivalent to 15% of the value of the aircraft in terms of the above arrangement. It simultaneously received proposal for renegotiation of existing terms from the vendor. The Company is confident that it shall be able to resolve the matter and shall not be required to pay any liquidated damages. 7. Capital Commitments:

Estimated amount of contracts remaining to be executed and not provided for aggregates to Rs. 1,977,447,071 (previous year Rs. 471,592,335). 8. Post employment benefits: The Company has an unfunded defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on separation equal to 15 days salary (last drawn salary) for each completed year of continuous service or part thereof in excess of six months. The following table summaries the components of net benefit expense recognized in the Profit and Loss Account. Net employee benefits expense recognized under Personnel expenses: Particulars

For the year ended March 31,2009 Rs.

Net actuarial (gain) / loss recognized in the year Past service cost Net benefit expense

For the year ended March 31,2008 Rs.

8,017,675

14,361,494

20,370,394

22,546,485

Details of defined benefit gratuity plan: Particulars

As at March 31, 2009 Rs.

Defined benefit obligation Fair value of plan assets Present value of unfunded obligations Less: Unrecognized past service cost Plan asset / (liability)

As at March 31 , 2008 Rs.

60,407,518

41 ,348,651

(60,407,518)

(41,348,651)

(60,407,518)

(41,348,651)

Changes in the present value of the defined benefit gratuity plan are as follows: Particulars

For the year ended March 31, 2009 Rs.

Opening defined benefit obligation Interest cost Current service cost Benefits paid Liability assumed on amalgamation Actuarial (gains) / losses on obligation Closing defined benefit obligation

41,348,651 3,924,190 8,428,529 1,311,527 8,017,675 60,407,518

56

For the year ended March 31 , 2008 Rs. 19,418,526 1,487,491 6,697,500 769,975 153,615 14,361,494 41,348,651

The principal assumptions used in determining defined benefit gratuity plan obligations are shown below: Particulars Discount rate Expected rate of return on plan assets Salary Escalation Rate

For the year ended March 31,2009

For the year ended March 31,2008

7%

8%

10% for first 5 years 10% and 7 % thereafter As per table below

Attrition rate:

Attrition rate used for the year ended March 31,2009 and March 31, 2008 are as per the table below:

Age

% Withdrawal

Up to 30 years Up to 44 years Above 44 years

15% 10% 3%

The estimates of future salary increases takes into account the inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market. Gratuity liability as at the year end is as follows: March 31, 2009 Defined benefit obligation Plan assets Surplus / (deficit) Experience adjustments on plan liabilities Experience adjustments on plan assets

9.

March 31 , 2008

60,407,518

41,348,651

(60,407,518) (9,208,538)

(41,348,651) (14,387,999)

Supplementary statutory information: For the year ended March 31,2009 (Rs.) (a) Managerial remuneration Salaries and allowances Contribution to provident fund Commission

For the year ended March 31,2008 (Rs.)

13,440,000 1,008,000 4,900,000

15,646,452 1,173,484

19,348,000

16,819,936

—

Note: -As the future liability for gratuity and leave encashment is provided on an actuarial basis for the Company as a whole, the amount pertaining to the directors is not ascertainable and, therefore, not included above.

57

BHADAT HOTELS LIMITED (b) Computation of Net Profit in accordance with section 349 of the Companies Act, 1956 for calculation of commission payable to directors For the year ended March 31, 2009 (Rs.)

For the year endec March 31, 2008 (Rs.)

454,819,546

1,136,378,953

19,348,000 237,472,654

15,646,452 273,868,010

6,839,831 16,185,671 —

(7,446,448) 25,473,365 —

151,990 91,449

26,352,469 117,097

235,756,712

272,152,068

4,639,898 494,512,531

2,204,556 1,196,033,274

Commission to Managing Director at 1 % of the net profits as calculated above

4,945,125

11,960,333

Commission paid to the Managing Director

4,900,000

—

1,367,998,424

1,810,161,662

96,529,784

106,902,737 5,053,033 7,508,363 1,870,416

Profit before tax (as per Profit and Loss Account)

Add: Directors' remuneration Depreciation as per Profit and Loss account Loss/(Profit) on sale of fixed assets as per Section 349 of the Companies Act, 1956 Provision for doubtful debts and advances Loss on disposal of investments Loss on discard of fixed assets (net) as per Profit and Loss account Wealth tax Less: Depreciation (to the extent specified in section 350 of the Companies Act, 1 956) Advances & debts written off during year from last year provisions Net profit as per Section 349 of the Companies Act, 1956

(c) Earnings in foreign currency (on accrual basis)* Hotel earnings * includes reimbursements to guests (d) Expenditure in foreign currency (on accrual basis) Royalty and marketing fees Legal and professional fees Advertisement and business promotion Traveling and conveyance Membership and subscription Commission and brokerage Miscellaneous expenses

(e) Value of imports calculated on CIF basis Provisions, stores and beverages Component and spares Capital goods

58

5,283,688

5,177,795 583,081 1,202,640

24,347,916

4,520,982 47,532,593 696,286

133,124,904

146,594,327

3,636,308 15,264,513 192,458,702

6,189,170 30,511,747 326,577,446

211,359,524

363,278,363

For the year ended March 31,2009 (Rs.) (f) Net dividend remitted in foreign currency Number of non-resident share holders Number of equity shares held on which dividend was due Amount remitted

For the year ended March 31,2008 (Rs.)

103 5,674,000 5,674,000

99 9,762,245 8,955,688

10. Additional information pursuant to the provisions of paragraphs 3,4C and 4D of Part II of Schedule VI to the Companies Act, 1956 (i) The Company has obtained the approval from the Central Government vide Order No. 46/157/2008-CL-lll dated June 17, 2008 under section 211(4) of the Companies Act, 1956 for non disclosure of quantitative information as required in compliance of Para 3 (i) (a) and 3 (ii) (d) of Part - II Schedule VI of the Companies Act, 1956 for the years ended on March 31, 2008, March 31, 2009 and March 31, 2010. Accordingly, this information has not been disclosed. Imported and indigenous raw materials, components and spare parts consumed:

Food and beverage (excluding liquor and wine): Imported Indigenous

Liquor and wine Imported Indigenous

Components, stores and spares: Imported Indigenous

Value (Rs.)

Percentage of consumption

Value (Rs.)

Percentage of consumption

For the year ended March 31,2009

For the year ended March 31,2009

For the year ended March 31,2008

For the year ended March 31,2008

279,466,316

100%

329,272,458

100%

279,466,316

100%

329,272,458

100%

36,138,855

100%

7,419,040 38,906,525

16.01% 83.99%

36,138,855

100%

46,325,565

100%

694,166 147,421,574

0.47% 99.53%

6,439,321 183,738,233

3.39% 96.61%

148,115,740

100%

190,177,554

100%

59

DHADAT HOTELS LIMITED 11. Details of dues to Micro, Small and Medium Enterprises as per MSMED Act, 2006 to the extent of confirmation received:

As at March 31,2009

As at March 31, 2008

The principal amount and the interest due thereon (to be shown separately) remaining unpaid to any supplier as at the end of each accounting year

Nil

Nil

The amount of interest paid by the buyer in terms of section 16, of the Micro Small and Medium Enterprise Development Act, 2006 along with the amounts of the payment made to the supplier beyond the appointed day during each accounting year

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Details of dues to Micro, Small and Medium Enterprises as per MSMED Act, 2006

The amount of interest due and payable for the period of delay in making payment (which have been paid but beyond the appointed day during the year) but without adding the interest specified under Micro Small and Medium Enterprise Development Act, 2006. The amount of interest accrued and remaining unpaid at the end of each accounting year; and The amount of further interest remaining due and payable even in the succeeding years, until such date when the interest dues as above are actually paid to the small enterprise for the purpose of disallowance as a deductible expenditure under section 23 of the Micro Small and Medium Enterprise Development Act, 2006 12. Investments: a)

The audited financial statements of the wholly owned subsidiary of the Company, Jyoti Limited, having operations at Srinagar (Jammu & Kashmir) shows an accumulated loss of Rs. 37,453,105 as on March 31,2009, which is more than the paid-up share capital of Rs. 6,300,400, resulting in complete erosion of net worth. The Company has an outstanding loan recoverable of Rs. 40,903,127 from the subsidiary. Considering the long term nature of the investment of Rs. 310,789,478, and value of assets held by Jyoti Limited, the Board of Directors of the Company consider that there is no diminution, other than temporary, in the value of investment and accordingly, no provision in these financial statements is considered necessary at present.

b)

The audited financial statements of the wholly owned subsidiary of the Company, Udaipur Hotels Limited, show accumulated losses of Rs. 69,405,430 which is more than the shareholder funds of Rs. 41,669,690 resulting in negative net worth as at March 31,2009. The Company has investments of Rs. 63,757,829 and loan of Rs. 97,219,422 as at March 31,2009. Based on the forecasts of profitability of the operations and the value of assets held by Udaipur Hotels Limited, the Board of Directors of the Company consider that there is no diminution, other than temporary, in the value of investment and accordingly, no provision in these financial statements is considered necessary at present.

c)

The Company holds 90% of the equity capital of Apollo Zipper India Ltd ('AZIL') for Rs. 521,308,409 and has provided a loan of Rs. 536,697,857. AZIL has been vested with the assets of The Lalit Great Eastern Hotel in Kolkata. As at March 31,2009, AZIL has accumulated losses of Rs. 25,119,641, which is more than the paid-up share capital of Rs. 8,087,100. AZIL is expected to commence its operations next year and is currently engaged in the process of complete renovation / re-construction of the property in

60

Kolkata. Considering the long term planning and prospects and value of assets held by the Subsidiary, the Board of Directors of the Company consider that there is no diminution, other than temporary, in the value of investment and accordingly, no provision in these financial statements is considered necessary at present. d)

The Company has an investment of Rs. 398,400,000 and has extended Rs. 240,037,501 as loan to Prime Cellular Limited, a 99.6% subsidiary as at March 31, 2009. Considering Prime Cellular Limited has entered in to a Joint Venture for setting up a hotel property at Chandigarh, management is confident (accumulated losses being Rs.9,485,768) that diminution in value, if any, is temporary and accordingly, no provision is considered necessary at this stage.

13. Derivative instruments and un-hedged foreign currency exposure: The Company does not use derivative financial instruments such as forward exchange contracts and interest rate swaps to hedge its risks associated with foreign currency fluctuations and interest rate or for trading/ speculation purpose. Particulars of un-hedged foreign currency exposure as at March 31, 2009 and at March 31, 2008: Particulars

As at March 31,2009 Rs. 901,445 720,198 344,703,108 — 8,445,879

Creditors Debtors Advance - given Advance-received EEFC bank balances

As at March 31,2008 Rs. 37,315,438 41,535,929 1,985,432 3,265,378 19,991,170

14. a)

The Company has taken land on license of 99 years from New Delhi Municipal Corporation with effect from March 11,1981. The Company has constructed Hotel and Commercial towers on the abovementioned land. The Company is paying annual license fee of Rs. 14,500,000 to the NDMC which is subject to revision after every 33 years. The Company has further sub- licensed the commercial towers and taken deposits (shown as deferred payment liabilities) from the tenants in World Trade Centre and World Trade Tower at New Delhi. These deposits amounting to Rs. 486,119,022 (Previousyear Rs. 486,119,022) are refundable at the end of the license period which coincides with the end of the license period of Company's agreement with New Delhi Municipal Corporation and are due to be paid on March 10,2080.

b)

Deferred payment liability amounting to Rs. 10,358,745 (Previous year Rs. Nil) includes provision for lease rent for extended moratorium period granted to Company in respect of lease of land for Bekal unit.

15. The Company had entered into a land lease agreement with New Okhla Industrial Development Authority ('NOIDA') for a period of 90 years w.e.f. January 1,2007. The Company paid an initial premium amounting to Rs. 195,360,000 and incurred stamp duty and registration charges on land amounting to Rs. 20,793,650. The Secretary of the Industrial Development Authority, U.P. and the Chief Executive Officer, NOIDA subsequently issued orders dated August 1,2007 and August 3,2007, canceling allotment of the said land. The Company filed a writ petition in the Allahabad High Court against these orders and the High Court in its order dated May 13,2008 has quashed both the orders and has remanded back the matter to the State Government for taking a fresh decision in the case. The Company has now filed a special leave petition before the Hon'ble Supreme Court of India challenging the above order of the High Court, which is pending before it for disposal. The cost

61

DHADAT HOTELS LIMITED of said land has been capitalized in these financial statements and the advance lease rent paid relating to the land of lease agreement has been accounted for considering that the lease is valid on the date of signing these financial statements. 16. The Company had acquired 90% of the equity capital of Apollo Zipper India Ltd. (AZIL) w.e.f. November 30, 2005. AZIL has been vested with the assets of The Great Eastern Hotel Kolkata. The Company vide nondisposal agreement dated November 30,2005 entered with the State Government of West Bengal in respect of investment in AZIL, cannot transfer the legal or beneficial ownership or any other rights and obligations for a period of three years. For this purpose the Company had pledged its investment of Rs. 521,308,409 in AZIL with State Government of West Bengal. Since the completion of the renovation/refurbishment of The Great Eastern Hotel Kolkata is still not complete. The Company is in process of extending the pledge of shares of AZIL to the State Government of West Bengal. 17. The Company during the year has been allotted additional land adjacent to the existing land in Ahmedabad. The management is of the view, that with such allotment, it is in position to commence construction activity for its project. In view of this, the management does not anticipate any problem in obtaining revised timelines from the State Government of Gujarat for completion of the project. 18. The Company appointed Government Registered Estate Valuer to assess the fair market value of the land and building at Mumbai unit and accordingly revalued the book value of Land and building to Rs. 2,338,256,110 and Rs. 1,632,130,500 compared to original value of Rs. 307,820,000 and 1,194,299,191 respectively as at March 31,2009. This has resulted in creation of revaluation reserved aggregating Rs. 2,468,267,419. 19. Previous year comparatives Previous year figures have been regrouped wherever necessary to conform to this year's classification. As per our report of even date For S. R. BATLIBOI & ASSOCIATES Chartered Accountants

For and on behalf of the Board of Directors of Bharat Hotels Limited

per Raj Agrawal Partner Membership No. 82028

Jyotsna Suri Chairperson and Managing Director

Arvind Sachdev Sr. Vice President Finance Place : Gurgaon Date : 27th June, 2009

Place : New Delhi Date : 27th June, 2009

62

Ramesh Suri Hanuwant Singh Dr. M.Y. Khan Vinod Khanna Lalit Bhasin Directors

Madhav Sikka Sr. Vice President Finance & Systems

Vijay K. Verma Sr. Vice President & Company Secretary

Information pursuant to Part IV of Schedule VI to the Companies Act, 1956 Balance Sheet abstract and Company's general business profile : I

Registration Details Registration No.: Balance Sheet Date:

11274 31.03.2009

55

State Code:

II Capital raised during the year (Amount in Rs. Thousands) Public Issue Nil Rights Issue Bonus Issue Nil Private Placement

Nil Nil

III Position of mobilisation and deployment of funds (Amount in Rs. Thousands) Total Assets Total Liabilities 15,971,001

15,971,001

Sources of Funds Paid up Capital Secured loan Unsecured Loan Applications of Funds Net Fixed Assets (Including Capital work in progress and Pre operative expenses) Net Current Assets

759,912 3,316,754 396,432

Reserves & Surplus Deferred payment liabilities Deferred tax liabilities

8,883,020 496,478 490,431

10,162,180 2,553,926

Investments Miscellaneous Expenditure

1,609,268 17,652

Total Expenditure Profit (+)/ Loss(-) after tax Dividend (in%)

3,529,716 287,138

IV Performance of the Company (Amount in Rs. Thousands) Turnover 3,984,535 Profit (+)/ Loss(-) before tax 454,820 Earning per share (in Rs.) 3.78

10

V Generic Names of Principal Products/Services of the Company as per monetary terms Item Code No. (ITCCode) 591001006 Product Description Hotels Item Code No. (ITCCode) 390001002 Product Description Restaurants For and on behalf of the Board of Directors of Bharat Hotels Limited Jyotsna Suri Chairperson and Managing Director

Arvind Sachdev Sr. Vice President Finance Place: New Delhi Date : 27th June, 2009 63

Ramesh Suri Hanuwant Singh Dr. M.Y. Khan Vinod Khanna Lalit Bhasin Directors

Madhav Sikka Sr. Vice President Finance & Systems

Vijay K. Verma Sr. Vice President & Company Secretary

BHABAT HOTELS LIMITED STATEMENT PURSUANT TO SECTION 212 OF THE COMPANIES ACT, 1956, RELATING TO SUBSIDIARY COMPANY Name of Subsidiary 1

Financial Year of the Subsidiary ended

2

Shares of the subsidiary held by Bharat Hotels Limited on the above date a

Number and face value

b

Extent of holding

Jyofl Limited

Apollo Zipper India Ltd. 31.03.2009

Prima Buildwell

31.03.2009

Udaipur Hotels Ltd. 31.03.2009

62,998 shares of Rs100/-each, fully Paid up

607,370 shares of Rs10/-each, fully Paid up

727,832 shares of Rs10/-each, fully paid up

3,009,999 shares of Rs10/-each, fully paid up

99.99%

99.99%

90.00%

P. Ltd. 31.03.2009

Prime Cellular Ltd. 31.03.2009

Bharat Hotels (Thailand) Co Limited' 31.03.2009

3,984,000 shares of 5,399,300 equity Rs100/-each, shares of Baht 100 each, fully paid up Baht 40 paid up 99.60%

89.99%

Net aggregate amount of profit / (losses) of the subsidiaries for the above financial years so far as they concern the members of Bharat Hotels Ltd. a

Dealt within the accounts of Bharat Hotels Limited for the year ended 31 st March, 2009

Nil

Nil

Nil

Nil

Nil

Nil

b

Not dealt within the accounts of Bharat Hotels Limited for the year ended 31 st March, 2009

(937,384)

(7,173,720)

(6,897,174)

5,290,453

1,216,384

(808,213)

Nil

Nil

Nil

Nil

Nil

Nil

36,401,721

(62,231,710)

(15,710,503)

(586,824)

(10,664,209)

Nil

Nil

Nil

Nil

Nil

Net aggregate amount of Profits / (losses) for previous financial year of the subsidiary company since it became subsidiary so far as they concern members of Bharat Hotels Limited a

Dealt within the accounts of Bharat Hotels Limited for the year ended 31 st March, 2009

b

Not dealt within the accounts of Bharat Hotels Limited for the year ended 31 st March, 2009

Changes in the interest of Bharat Hotels Limited between the end of Financial Year of the subsidiary Company and that of Bharat Hotels Limited's Financial Year.

Nil

Material changes between the end of financial year of the Subsidiary company and the Bharat Hotels Limited's Financial Year in respect of: a

Fixed Assets of Subsidiary

Nil

Nil

Nil

b

Investments of Subsidiary

Nil

Nil

Nil

Nil

Nil

Nil

c

Money lent by the Subsidiary

Nil

Nil

Nil

Nil

Nil

Nil

d

Money borrowed by the Subsidiary Company for any purpose other than that of meeting current liabilities.

Nil

Nil

Nil

Nil

Nil

Nil

'For Bharat Hotels (Thailand) Co Um/ted 1 Baht is taken equivalent tofts. 1.4811 {exchangerateason31stMarch, 2009) For and on behalf of the Board of Directors of Bharat Hotels Limited Jyotsna Suri Chairperson and Managing Director

Ramesh Suri Hanuwant Singh Dr. M.Y. Khan Vinod Khanna LalitBhasin Directors

Arvind Sachdev Sr. Vice President Finance Place: New Delhi Date: 27th June, 2009

64

MadhavSikka

Sr. Vice President Finance & Systems

Vijay K. Verma Sr. Vice Presidents Company Secretary

DIRECTORS' REPORT TO THE MEMBERS

Your Directors have pleasure in presenting 45th Annual Report together with the Audited Accounts of the company for the year ended 31st March, 2009. FINANCIAL RESULTS

The Annual Accounts for the year ended 31st March 2009 have shown a net loss of Rs.9.37 lacs (Previous Year Net Profit Rs.2.01 lacs) and after considering earlier loss amounting of Rs.364.01 lacs a deficit amount of Rs.373.39 lacs (Previous Year Rs.364.01 Lacs) has been carried over to the Balance Sheet. DIVIDEND

In view of the financial position of the Company, your Directors do not recommend any dividend for the period ended 31st March, 2009. DIRECTORS

As per the provisions of the Companies Act, 1956 read with Articles of Association of the Company, Ms Jyotsna Suri, retire by rotation and being eligible offers herself for re-appointment at this Annual General Meeting. 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 had been followed along with proper explanation relating to material departures;

(ii) the directors had selected such accounting policies and applied consistently and made judgments and estimates 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) the directors had taken proper and sufficient care 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 directors had prepared the Annual Accounts on a going concern basis. AUDITORS M/s R.C.Gupta & Co., Chartered Accountants, Jammu who are Auditors of the Company, hold office until the conclusion of the forthcoming Annual General Meeting and being eligible, offer themselves for re-appointment.

AUDITORS' OBSERVATIONS

The observation of the Auditors have been suitably explained in the notes on Accounts and do not call for any further comments.

65

JYOTI LIMITED FIXED DEPOSITS

Your Company has not accepted/invited any deposits from the Public for the year under review within the meaning of Section 58A of the Companies Act, 1956 and the rules made there under. SECRETARIAL COMPLIANCES

In terms of Section 383A of the Companies Act, 1956, the Company has obtained the Secretarial Compliance Certificate from a Practicing Company Secretary. A copy of the said Certificate is attached and form part of this Report. INFORMATION U/S. 217(1 )(e) OF THE COMPANIES ACT, 1956 READ WITH THE COMPANIES (DISCLOSURE OF PARTICULARS IN THE REPORT OF BOARD OF DIRECTORS) RULES, 1988.

a)

Conservation of Energy : The operations of the company involve low energy consumption. Adequate measures have, however, been taken to conserve energy.

b) Technology Absorption: Since business and technologies are changing constantly, investment in research and development activities is of paramount importance. Your Company continues its focus on quality up gradation of product and services development. c)

Foreign Exchange earnings and outgo: During the period under review there was no earning and outgo on account of foreign exchange.

PARTICULARS OF EMPLOYEES

During the period under review or part thereof, there was no employee covered under Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 as amended from time to time. ACKNOWLEDGEMENT

The Directors express their gratitude to the shareholders and Banks for their continued support during the year under review. for and on behalf of the Board

(JYOTSNASURI) CHAIRPERSON

Place: New Delhi Dated: 27th June, 2009

66

SECRETARIAL COMPLIANCE CERTIFICATE COMPANY REGN. NO. NOMINAL CAPITAL

: :

07-286 Rs. 100 LACS

To, The Members, JYOTI LIMITED We have examined the registers, records, books and papers of Jyoti Limited (the Company) as required to be maintained under the Companies Act, 1956, (the Act) and the rules made thereunder and also the provisions contained in the Memorandum and Articles of Association of the Company for the financial year ended on 31st March, 2009 (the said period). In our opinion and to the best of our information and according to the examinations carried out by us explanations furnished to us by the company, its officers and agents, we certify that in respect of the aforesaid financial year: 1.

The Company has kept and maintained all registers as stated in Annexure 'A' to this certificate, as per the provisions and the rules made thereunder and all entries therein have duly recorded.

2.

The Company has duly filed the forms and returns as stated in Annexure 'B' to this certificate, with the Registrar of Companies, Regional Director, Central Government, Company Law Board or other authorities within the time prescribed under the Act and the rules made there under.

3.

The Company, being a Public Limited Company comments are not required.

4.

The Board of Directors duly met 4 times on 09.06.2008,08.08.2008,15.12.2008 and 28.03.2008 in respect of which meetings proper notices were given and the proceedings were properly recorded and signed in the Minutes Book maintained for the purposes.

5.

The Company has not closed its Register of Members during the said period.

6.

The Annual General Meeting for the financial year ended on 31 * March, 2009 was held on 16.09.2008 after giving due notice to the members of the company and the resolutions passed thereat were duly recorded in Minutes Book maintained for the purpose.

7.

No Extra-Ordinary General Meeting was held during the said period.

8.

The Company has not advanced any loans to its Directors or persons or firms or companies referred in the Section 295 of the Act during the said period.

9.

The Company has duly complied with the provisions of Section 297 of the Act in respect of contracts specified in that Section.

10. The Company has made necessary entries in the register maintained under Section 301 of the Act. 11. As there was no instance falling within the purview of Section 314 of the Act, the company has not obtained any approvals from the Board of Directors, members or Central Government, as the case may be. 12. The Company has not issued any duplicate share certificate during the said period.

67

JYOTI LIMITED 13. The Company has: (i) (ii) (iii) (iv)

not made any allotment or transfer /transmission of shares during the year. not deposited any amount in a Separate Bank Account as no dividend was declared during the year. not posted warrants to any member of the company as no dividend was declared. duly complied with the requirement of Section 217 of the Act.

14. The Board of Directors of the company is duly constituted. There was no appointment of additional directors, alternate directors and directors to fill casual vacancy during the financial year. 15. The Company has not appointed any Managing Director / Whole-time Director / Manager during the said period. 16. The Company has not appointed any sole-selling agents during the said period. 17. The Company was not required to obtain any approvals of the Central Government, Company Law Board, Regional Director, Registrar or such other authorities as may be prescribed under the various provisions of the Act. 18. The directors have disclosed their interest in other firms / companies to the Board of Directors pursuant to the provisions of the Act and the rules made thereunder. 19. The Company has not issued any equity share or any other securities during the said period. 20. The Company has not bought back any shares during the financial year. 21. There was no redemption of preference shares or debentures during the financial year. 22. There was no transaction necessitating the company to keep in abeyance the rights to dividend, rights shares and bonus shares pending registration of transfer of shares. 23. The Company has not invited/accepted any deposit including any unsecured loan falling within the purview of Section 58A during the said period. 24. The amount borrowed by the Company from Banks/ holding company during the financial year 31.03.2009 are within borrowing limits and that necessary resolutions have been passed. 25. The Company has not made loans or advances or given guarantees or provided securities to other bodies corporate and consequently no entries have been made in the register kept for the purpose. 26. The Company has not altered the provisions of the memorandum with respect of situation of the company's registered office from one state to another during the period under scrutiny. 27. The Company has not altered the provisions of the memorandum with respect to the objects of the company during the period under scrutiny. 28. The Company has not altered the provisions of the memorandum with respect to the name of the company during the year under scrutiny. 29. The Company has not altered the provisions of the memorandum with respect to share capital of the company during the period under scrutiny.

68

30. The Company has not altered its Articles of Association during the financial year. 31. There was no prosecution initiated against or show cause notices received by the company during the financial year, for offences under the Act. 32. The Company has not received any money as security from its employees during the said period. 33. The Company has not created any trust of PF for its employees under Section 418 of the Act. For R S M & C o Company Secretaries (RAVI SHARMA) Partner (C.P.No. 3666)

Place: New Delhi Dated: 27th June, 2009

69

JYOTI LIMITED Annexure 'A' to Secretarial Compliance Certificate REGISTERS AS MAINTAINED BY THE COMPANY Under Section

SI.No.

Name of Register

1.

Register of Members

150

2.

Register of Share Transfer

108

3.

Register of Particulars of contracts, companies and firms in which directors are interested

301

4.

Register of Directors, Managing Director, Manager and Secretary

303

5.

Register of Directors' Shareholdings

307

6.

Books of Accounts

209

7.

Minutes of Meetings of Board of Directors

193

8.

Minutes of General Meetings

193

9.

Register of Mortgage and charges

143

Annexure 'B' to Secretarial Compliance Certificate FORMS AND RETURNS AS FILED BY THE COMPANY WITH THE REGISTRAR OF COMPANIES DURING THE FINANCIAL YEAR ENDING ON 31ST MARCH, 2009. Forms/ Returns

Under Section

For

Form 20 B (Annual Return)

159

The AGM held on 1 6.09.2008 filed on 1 2. 1 1 .2008.

Form 23AC & Form 23ACA (Annual Report)

220

The financial year 2007-08 filed on 1 5. 1 0.2008.

Form 66 (Compliance Certificate)

383A

The financial year 2007-08 filed on 1 3. 1 0.2008

(There was no other Forms and Returns was filed by the company with the Regional Director, Central Government or other Authorities during the Financial Year ending on 31st March, 2009 under the Act.) For R S M & Co Company Secretaries

Place: New Delhi Dated: 27th June, 2009

(RAVI SHARMA) Partner(C.P.No. 3666)

70

R.C.GUPTA & CO. CHARTERED ACCOUNTANTS

DURBARGARH ROAD J AMMU -180001

Auditor's Report to Shareholders We have audited the annexed Balance Sheet as at 31 * March 2009 and also the Profit and Loss account for the year ended on that date of Jyoti Limited. These Financial statements are the responsibility of the Companies 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. These 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 test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principal used and significant estimates made by the Management, as well as evaluating the overall financial statement presentation. We believe that our Audit provides a reasonable basis for our opinion. a)

We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purpose of our opinion.

b)

In our opinion proper books; of account as required by law; have been kept by the Company as far as appears from our examination of those books.

c)

The Balance Sheet and Profit and Loss account dealt with this report are in agreement with the books of account.

d)

In our opinion the Balance Sheet and the Profit & Loss Account comply with the accounting standards referred to in section 211 (3C) of the Companies Act 1956, to the extent applicable.

e)

In our opinion and as far information obtained, none of the Directors is disqualified from being appointed as a Director in terms of section 274 (1) (g) of the Companies Act.

f)

In our opinion and to the best of our information and according to the explanations given to us, the accounts, subject to notes on accounts, give the information required by the Companies Act 1956 in the manner so required and give a true and fair view: I. In the case of Balance Sheet of the state of affairs of the Company as at 31 * March 2009,and II. In the case of Profit and Loss Account of the loss of the Company for the year ended on that date.

g)

As required by the Companies (Auditor's Report) Order 2003 issued by the Central Government and on the basis of such checks as we considered appropriate we enclose a statement on the matters specified in the said order. For R. C. GUPTA & CO. Chartered Accountants

Omesh Gupta Partner Membership No. 10917 Place: Jammu Date : 27th June, 2009

71

JYOTI LIMITED ANNEXURE REFERRED TO IN PARAGRAPH 7 OF AUDITORS REPORT OF EVEN DATE TO THE MEMBERS OF JYOTI LIMITED ON THE ACCOUNTS FOR THE YEAR ENDED MARCH 31,2009 1.

The Company has maintained proper records to show full particulars, including quantitative details and situation, of its fixed assets. We have been informed that the fixed assets of the Company are physically verified by the Management according to a phased program designed to cover all the items, which in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to the program, physical verification was carried out during the year and no material discrepancies were noticed.

2.

During the year, the company has not disposed off any part of fixed assets, which has affected the going concern.

3.

There is no inventory of the Company.

4.

The Company has no inventory, there is no requirement of physical verification.

5.

The Company has no inventory, hence no record thereof is required.

6.

The Company has not granted any loan secured or unsecured to parties covered in the register maintained under section 301 of the Act.

7.

a) The company has taken loan from a company covered in the register maintained under section 301 of the Act. The maximum amount involved during the year and the year end balance of such loan aggregates to Rs 4.09 crores. b) In our opinion, the terms and conditions of such loans are not prima facie prejudicial to the interest of the company as the loans are interest free. c)

In respect of the aforesaid loan, which is from the holding company, there is no stipulation as to its repayment.

8.

There are adequate internal control procedures commensurate with the size of the Company and the nature of its business with regard to the purchases of fixed assets and sale of services.

9.

On the basis of our examination of the books of account, the company has entered the particulars of contract in the register maintained pursuant to the Section 301 of the Act and price paid as per prevailing market price.

10.

The Company has not accepted deposits under the provisions of Section 58A and 58AA of the Act and the rules framed there under.

11.

In our opinion, the Company's present internal audit system is commensurate with its size and nature of business.

12.

We are of the opinion that, prima facie, the cost records have not been prescribed by the Central Government of India under Section 209(1 )(d) of the Act for the business that the company is engaged in.

13.

According to the books and records as produced and examined by us there are no undisputed statutory dues in respect of Provident Fund, Employees' State Insurance dues, Investor Education and Protection Fund, Income Tax, Wealth Tax.

72

14.

As at March 31,2009, there have been no disputed dues with the respective authorities in respect of Income Tax, Wealth Tax, Excise Duty and Cess.

15.

The Company has accumulated losses as at March 31,2009 amounting to Rs. 373.39 lakhs which is excess of its paid up capital and free reserves but it has not incurred cash loss whether during the financial year ended on that date or in the immediately preceding financial year.

16.

According to the records of the Company, it has not defaulted in payment of loan to any financial institution.

17.

The Company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures and other securities.

18.

In our opinion, the provisions of any special statute applicable to chit fund/ nidhi/mutual benefit fund/ societies are not applicable to it.

19.

The Company has not dealt or traded in shares, securities, debentures or other investments during the year.

20.

As per information provided, the Company has not given any guarantees for loans taken by others.

21.

The company has not obtained any term loan.

22.

On the basis of review of utilization of funds which is based on an overall examination of the balance sheet of the company, related information as made available to us and as represented to us by the management, funds have been raised from holding company and these have been utilized for both term and short term investment.

23.

The Company has not made any preferential allotment during the year.

24.

The Company has not issued debentures.

25.

The company has not raised money by public issue during the year.

26.

As per the information and explanation given to us and on the basis of examination of records, no fraud by the Company was noticed or reported during the year For R. C. GUPTA & CO. Chartered Accountants

Omesh Gupta Partner Membership No. 10917 Place: Jammu Date : 27th June, 2009

73

JYOTI LIMITED Balance Sheet as at March 31, 2009 Schedules

March 31,2009 Rs.

March 31,2008 Rs.

SOURCES OF FUNDS

Shareholders' Funds Share capital Loan funds Unsecured loans TOTAL

6,300,400

6,300,400

6,300,400

6,300,400

40,903,127

40,014,426

40,903,127

40,014,426

47,203,527

46,314,826

12,369,394

12,369,394

4,208,231

4,122,090

8,161,163

8,247,304

118,439

120,124

APPLICATION OF FUNDS

Fixed Assets Gross block Less: Accumulated Depreciation Net block Current Assets, Loans and Advances Cash and bank balances Loans and advances

4 5

(A)

Less: Current Liabilities and Provisions Current liabilities Provision for taxation (B)

Net Current Assets Profit and Loss Account

(A-B)

TOTAL

1,931.327

1,830,027

2,049,766

1,950,151

224,507

162,350

122,000

122,000

346,507

284,350

1,703,259

1,665,801

37,339,105

36,401,721

47,203,527

46,314,826

Notes to Accounts The schedules referred to above and notes to accounts form an integral part of the Balance Sheet. As per our report of even date For R. C. GUPTA & CO. Chartered Accountants

per Omesh Gupta Partner Membership No. 10917 Place: Jammu Date: 27th June, 2009

For and on behalf of the Board of Directors of Jyoti Limited

Jyotsna Suri Director

Place: New Delhi Date: 27th June, 2009

74

Divya Suri Singh Director

Profit and Loss Account for the year ended March 31, 2009 Schedules

March 31, 2009 March 31,2008 Rs. Rs.

INCOME Licence Fees

500,000

500,000

500,000

500,000

1,351,243

59,053

86,141

86,141

1,437,384

145,194

EXPENDITURE Operating and other expenses

7 3

Depreciation TOTAL Profit before tax

(937,384)

354,806

Provision for Tax

122,000

Income Tax Paid

32,200

Net Profit

(937,384)

200,606

Balance brought forward from previous year

(36,401,721)

(36,602,327)

Deficit carried to Balance Sheet

(37,339,105)

(36,401,721)

Earnings per share

8

Basic [Nominal value of shares Rs. 100 (previous year: Rs. 100)]

(14.88)

Notes to Accounts

3.18

9

The schedules referred to above and the notes to accounts form an integral part of the Profit and Loss Account. As per our report of even date For R. C. GUPTA & CO. Chartered Accountants

per Omesh Gupta Partner Membership No. 10917 Place: Jammu Date: 27th June, 2009

For and oni behalf of the Board of Directors of Jyoti Limited

Jyotsna Suri Director

Place: New Delhi Date: 27th June, 2009

75

Divya Suri Singh Director

JYOTI LIMITED Cash Flow Statement as at March 31, 2009 March 31,2009 Rs. A. Cash flow from operating activities Net Profit before taxation Adjustments for: Depriciation Operating profit before working capital changes Movements in working capital: (Increase)/Decrease in loans and advances Increase / (Decrease) in current liabilities Cash from operating activities

March 31,2008 Rs.

(937,384)

354,806

86,141 (851,243)

86,141

440,947

12,000 62,157

12,000 2,000

(777,086)

454,947

Income Tax Paid

(113,300)

(2,371,300)

Net cash from investing activities

(890,386)

(1,916,353)

888,701

1.916,197 1,916,197

B. Cash flow from financing activities Proceeds from Holding Company Net cash from financing activities

888,701

Net increase/ (decrease) in cash and cash equivalents (A+B) Cash and cash equivalents at the beginning of the year Cash and cash equivalents at the end of the year Components of cash and cash equivalents : Cash on hand Balances with scheduled banks: On current accounts

(1,685) 120,124 118,439

120,280

118,439 118,439

120,124 120,124

(156) 120,124

As per our report of even date For R. C. GUPTA & CO. Chartered Accountants

per Omesh Gupta Partner Membership No. 10917 Place: Jammu Date: 27th June, 2009

For and on behalf of the Board of Directors of Jyoti Limited

Jyotsna Suri Director Place: New Delhi Date: 27th June, 2009 76

Divya Suri Singh Director

Schedules to the Accounts March 31,2009 Rs.

March 31,2008 Rs.

10,000,000

10,000,000

6,300,400

6,300,400

Schedule 1 : Share capital Authorised 100,000 equity shares (previous year: 100,000) equity shares of Rs.100/- each Issued and Subscribed 63,004 (previous year: 63,004) equity shares of Rs. 10O/- each fully paid up

6,300,400 6,300,400 Of the above: 62,998 (previous year: 62,998) equity shares are held by Bharat Hotels Limited, the Holding Company.

Schedule 2 : Unsecured Loans From Holding Company

40,903,127

40,014,426

40,903,127

40,014,426

Schedule 3 : Fixed assets Building

Total

Previous year

12,369,394

12,369,394

12,369,394

12,369,394

12,369,394

12,369,394

4,122,090

4,122,090

4,035,949

86,141

86,141

86,141

4,208,231

4,208,231

4,122,090

As at March 31, 2009

8,161,163

8,161,163

8,247,304

As at March 31 , 2008

8,247,304

8,247,304

8,333,445

Gross Block As at April 1,2008 Additions As at March 31, 2009 Depreciation / amortization As at April 1 , 2008 For the period As at March 31 , 2009 Net block

77

JYOTI LIMITED March 31,2009 Rs.

March 31,2008 Rs.

118,439

120,124

118,439

120,124

1,051,727 15,000 864,600

1,063,727 15,000

1,931,327

1,830,027

— 192,360

162,350

Schedule 4 : Cash and Bank Balances Balances with scheduled banks: On current accounts

Schedule 5: Loans and Advances Unsecured, considered good Advance Rent Security Deposit TDS /Advance Tax

751,300

Schedule 6 : Current Liabilities Sundry creditors - total outstanding dues to Micro and Small Enterprises - total outstanding dues of creditors other than Micro and Small Enterprises Other liabilities

32,147 224,507

162,350

12,000 1,562 1,292,500 5,096 2,000

12,000

Schedule 7 : Operating and Other Expenses Lease Rent Rates & Taxes Travelling Printing & Stationery Professional Charges Auditor's remuneration - Audit fee Bank Charges

2,072 13,262 5,720 5,843

36,400 1,685

20,000

1,351,243

59,053

(937,384) 63,004 (14.88)

200,606 63,004 3.18

156

Schedule 8 : Earnings per share (EPS) Net Profit for calculation of earnings per share Number of equity shares in calculating EPS Basic and diluted earnings per share

78

Schedule 9: Notes to the Accounts: 1.

The financial statements have been prepared to comply in all material respects in respect with the Notified Accounting Standards by Companies Accounting standards Rules,2006 and relevant provisions of the Companies Act, 1956.The financial statements have been prepared under the historical cost convention on an accrual basis.

2.

Depreciation has been calculated on WDV method in accordance with Schedule XIV to the Companies Act.

3.

Related Party Disclosures i) Holding Company: Bharat Hotels Ltd ii) Key Management Personnel: 1. Mr Ramesh Suri 2. Mrs Jyotsna Suri iii) Transaction with above parties in ordinary course of business are as follows Amount in Rs 'lacs 2008-09

2007-08

Lease Income from Bharat Hotels Ltd

500,000

500,000

Loan received/( repaid)

917,653

2,302,899

1,292,500

—

Services received 4.

The Company has no employee, hence provision of gratuity are not applicable.

5.

In view of Brought Forward losses, deferred tax asset has not been provided for.

6.

Previous year figures have been regrouped wherever necessary to conform to this year's classification.

As per our report of even date For R. C. GUPTA & CO. Chartered Accountants

per Omesh Gupta Partner Membership No. 10917 Place : Jammu Date: 27th June, 2009

For and on behalf of the Board of Directors of Jyoti Limited

Jyotsna Suri Director Place : New Delhi Date: 27th June, 2009

79

Divya Suri Singh Director

JYOTI LIMITED Information Pursuant to Part IV of Schedule VI of the Companies Act, 1956 Balance Sheet Abstract and Company's General Business Profile I.

II.

III.

IV.

V.

Registration Details Registration Number State Code Balance Sheet Date

286 07 31.03.2009

Capital raised during year (Amount in Rs. Thousand) Public Issue Rights Issue Bonus Issue Private Placement

NIL NIL NIL NIL

Position of mobilisation and deployment of funds (Amount in Rs. Thousand) Total Liabilities Total Assets Sources of Funds Paid up Capital Reserves & Surplus Secured Loans Unsecured Loans Applications of Funds Net Fixed Assets Investments Net Current Assets Miscellaneous Expenditure Accumulated Losses Performance of Company (Amount in Rs. Thousand) Turnover Total Expenditure Profit(+)/Loss (-) before tax Profit(+)/Loss (-) aftertax Earning Per Share (in Rs.) Dividend (in %)

47,550.03 47,550.03 6,300.40 — — 40,903.13 8,161.16 — 1,703.26 — 37,339.11

500.00 1,437.38 (937.38) (937.38) (14.88) —

Generic Names of Principal Products/Services of the company as per monetary terms 591001006 Hotels 390001002 Restaurants

Item Code No. (ITC Code) Product Description Item Code No. (ITC Code) Product Description

For and on behalf of the Board of Directors of Jyoti Limited

Place: New Delhi Date: 27th June, 2009

Jyotsna Suri Director 80

Divya Suri Singh Director

DIRECTORS' REPORT TO THE MEMBERS

Your Directors have pleasure in presenting 8th Annual Report together with the Audited Accounts of the company for the year ended 31st March, 2009. FINANCIAL RESULTS

The Annual Accounts for the year ended 31st March 2009 have shown a net loss of Rs.71.74 lacs (Previous YearNet Loss of Rs. 62.47 Lacs) and after considering earlier loss amounting of Rs.622.32 lacs an amount of loss of Rs.694.05 lacs (Previous Year Rs. 622.32 Lacs) has been carried over to the Balance Sheet. DIVIDEND

In view of the financial position of the Company, your Directors do not recommend any dividend for the period ended 31st March, 2009. DIRECTORS

As per the provisions of the Companies Act, 1956 read with Articles of Association of the Company, Ms. Jyotsna Suri, retire by rotation and being eligible offers herself for re-appointment at this Annual General Meeting. 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 had been followed along with proper explanation relating to material departures;

(ii) the Directors had selected such accounting policies and applied consistently and made judgments and estimates 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 loss of the company for that period; (iii) the Directors had taken proper and sufficient care 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 Directors had prepared the Annual Accounts on a going concern basis. AUDITORS M/s. S.R. Batliboi & Company, Chartered Accountants, Gurgaon, retire at the ensuing Annual General Meeting and, being eligible, offer themselves for re-appointment. The company has received a certificate from them pursuant to Section 224(1 B) of the Companies Act, 1956 confirming their eligibility for re-appointment. AUDITORS' OBSERVATIONS

The observation of the Auditors have been suitably explained in the notes on Accounts and do not call for any further comments.

81

UDAIPUD HOTELS LIMITED FIXED DEPOSITS

Your Company has not accepted/invited any deposits from the Public for the year under review within the meaning of Section 58A of the Companies Act, 1956 and the rules made there under. INFORMATION U/S. 217(1)(e) OF THE COMPANIES ACT, 1956 READ WITH THE COMPANIES (DISCLOSURE OF PARTICULARS IN THE REPORT OF BOARD OF DIRECTORS) RULES, 1988.

Conservation of Energy, Technology Absorption, Foreign Exchange earnings and Outgo: a)

Conservation of Energy : The operations of the company involve low energy consumption. Adequate measures have, however, been taken to conserve energy.

b) Technology Absorption: Since business and technologies are changing constantly, investment in research and development activities is of paramount importance. Your Company continues its focus on quality up gradation of product and services development. c)

Foreign Exchange earnings and outgo: During the period under review, hotel earning in foreign exchange amounted to Rs. 24.85 lacs (Previous Year -Rs. 47.24 lacs) , whereas foreign exchange outgo was -Nil (Previous Year-Nil).

PARTICULARS OF EMPLOYEES

During the period under review or part thereof, there was no employee covered under Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 as amended from time to time. SECRETARIAL COMPLIANCES

In terms of Section 383A of the Companies Act, 1956, the Company has obtained the Secretarial Compliance Certificate from a Practicing Company Secretary. A copy of the said Certificate is attached and form part of this Report. ACKNOWLEDGEMENT

The directors take the opportunity to express their appreciation for the whole hearted and sincere cooperation the company received from the various departments of Central and State Government, Bankers, Customers, Travel Agents, suppliers and Contractors as well as shareholders of the company during the year under review. The directors also wish to place on records the appreciation for the contribution made by all the employees of all levels and hope that with their continued commitment and dedication the company could look forward to more profitable operations ahead. for and on behalf of the Board

(JYOTSNASURI) CHAIRPERSON

Place: New Delhi Dated: 27th June, 2009

82

SECRETARIAL COMPLIANCE CERTIFICATE COMPANY REGN. NO. NOMINAL CAPITAL

: :

55-112153 Rs. 70 LACS

To, The Members, UDAIPUR HOTELS LIMITED We have examined the registers, records, books and papers of Udaipur Hotels Limited (the Company) as required to be maintained under the Companies Act, 1956, (the Act) and the rules made thereunder and also the provisions contained in the Memorandum and Articles of Association of the Company for the financial year ended on 31st March, 2009 (the said period). In our opinion and to the best of our information and according to the examinations carried out by us explanations furnished to us by the company, its officers and agents, we certify that in respect of the aforesaid financial year: 1.

The Company has kept and maintained all registers as stated in Annexure 'A to this certificate, as per the provisions and the rules made thereunder and all entries therein have duly recorded.

2.

The Company has duly filed the forms and returns as stated in Annexure 'B' to this certificate, with the Registrar of Companies, Regional Director, Central Government, Company Law Board or other authorities within the time prescribed under the Act and the rules made thereunder.

3.

The Company, being a Public Limited Company comments are not required.

4.

The Board of Directors duly met 5 times on 9.06.2008,19.07.2008,8.08.2008,15.12.2008 and 28.03.2009 and in respect of which meetings proper notices were given and the proceedings were properly recorded and signed in the Minutes Book maintained for the purposes.

5.

The Company has not closed its Register of Members during the said period.

6.

The Annual General Meeting for the financial year ended on 31st March, 2008 was held on 15.09.2008 after giving due notice to the members of the company and the resolutions passed thereat were duly recorded in Minutes Book maintained for the purpose.

7.

No Extra-Ordinary General Meetings were held during the financial year.

8.

The Company has not advanced any loans to its Directors or persons or firms or companies referred in the Section 295 of the Act during the said period.

9.

The Company has duly complied with the provisions of Section 297 of the Act in respect of contracts specified in that Section.

10. The Company has made necessary entries in the register maintained under Section 301 of the Act. 11. As there was no instance falling within the purview of Section 314 of the Act, the company has not obtained any approvals from the Board of Directors, members or Central Government, as the case may be. 12. The Company has not issued any duplicate share certificate during the said period.

83

UDAIPUB HOTELS LIMITED 13. The Company has: (i) (ii) (iii) (iv)

not made any allotment or transfer /transmission of share during the year. not deposited any amount in a Separate Bank Account as no dividend was declared during the year. not posted warrants to any member of the company as no dividend was declared. duly complied with the requirement of section 217 of the Act.

14. The Board of Directors of the company is duly constituted. There was no appointment of additional directors, alternate directors and directors to fill casual vacancy during the financial year. 15. The Company has not appointed any Managing Director/Whole-time Director / Manager during the said period. 16. The Company has not appointed any sole-selling agents during the said period. 17. The Company was not required to obtain any approvals of the Central Government, Company Law Board, Regional Director, Registrar or such other authorities as may be prescribed under the various provisions of the Act. 18. The directors have disclosed their interest in other firms / companies to the Board of Directors pursuant to the provisions of the Act and the rules made thereunder. 19. The Company has not issued any equity share or any other securities during the said period. 20. The Company has not bought back any share during the financial year. 21. There was no redemption of preference shares or debentures during the financial year. 22. There was no transaction necessitating the company to keep in abeyance the rights to dividend, rights shares and bonus shares pending registration of transfer of shares. 23. The Company has not invited/accepted any deposit including any unsecured loan falling within the purview of Section 58A during the said period. 24. The amount borrowed by the Company from Banks/ holding company during the financial year 31.03.2009 are within borrowing limits and that necessary resolutions have been passed. 25. The Company has not made loans or advances or given guarantees or provided securities to other bodies corporate during the year and consequently no entries have been made in the register kept for the purpose. 26. The Company has not altered the provisions of the memorandum with respect of situation of the company's registered office from one state to another during the period under scrutiny. 27. The Company has not altered the provisions of the memorandum with respect to the objects of the company during the period under scrutiny. 28. The Company has not altered the provisions of the memorandum with respect to the name of the company during the year under scrutiny. 29. The Company has not altered the provisions of the memorandum with respect to share capital of the company during the period under scrutiny.

84

30. The Company has not altered its Articles of Association during the financial year. 31. There was no prosecution initiated against or show cause notices received by the company during the financial year, for offences under the Act. 32. The Company has not received any money as security from its employees during the said period. 33. The Company has not created any trust of PF for its employees under Section 418 of the Act, however company has been generally depositing both employee's and employer's contribution to Provident Fund with prescribed authorities regularly. For R S M & C o Company Secretaries (Ravi Sharma) Partner-C.P.No. 3666

Place: New Delhi Date: 27th June, 2009

85

UDAIPUE HOTELS LIMITED Annexure 'A' to Secretarial Compliance Certificate REGISTERS AS MAINTAINED BY THE COMPANY SI. No. Name of Register

Under Section

1.

Register of Members

150

2.

Register of Share Transfer

108

3.

Register of Particulars of contracts, companies and firms in which directors are interested

301

4.

Register of Directors, Managing Director, Manager and Secretary

303

5.

Register of Directors' Shareholdings

307

6.

Books of Accounts

209

7.

Minutes of Meetings of Board of Directors

193

8.

Minutes of General Meetings

193

9.

Register of Mortgage and charges

143

Annexure 'B' to Secretarial Compliance Certificate FORMS AND RETURNS AS FILED BY THE COMPANY WITH THE REGISTRAR OF COMPANIES DURING THE FINANCIAL YEAR ENDING ON 31ST MARCH, 2009. Forms/ Returns

Under Section

For

Form 20B (Annual Return)

159

the AGM held on 15.09.2008 filed on 12.11.2008.

Form 23AC & Form 23ACA (Annual Report)

220

the financial year 2007-08 filed on 13.10.2008.

Form 66 (Compliance Certificate)

383A

the financial year 2007-08 filed on 13.10.2008.

(There was no other Forms and Returns was filed by the company with the Regional Director, Central Government or other Authorities during the Financial Year ending on 31st March, 2009 under the Act.) For R S M & C o Company Secretaries

Place: New Delhi Date: 27th June, 2009

(Ravi Sharma) Partner-C.P.No. 3666

86

S.R. BATLIBOI & ASSOCIATES

Chartered Accountants Auditors' Report

To The Members of Udaipur Hotels Limited 1. We have audited the attached Balance Sheet of Udaipur Hotels Limited ('the Company') as at March 31, 2009 and also the Profit and Loss Account and 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. 2. 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. 3. As required by the Companies (Auditor's Report) Order, 2003 (as amended) issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order. 4. Further to our comments in the Annexure referred to in para 3 above, we report that: i.

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;

ii.

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;

iii.

The Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account;

iv.

In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956;

v

On the basis of the written representations received from the Directors, as on March 31, 2009, and taken on record by the Board of Directors, we report that none of the directors is disqualified as on March 31,2009 from being appointed as a Director in terms of clause (g) of Sub Section (1) of Section 274 of the Companies Act, 1956.

vi.

As explained in Note 2 under Schedule 5, the Company has not apportioned book value Rs.23,898,912 to land and building and accordingly, the land has not been separately depicted. Matter had been qualified during the previous year also. We are unable to assess the impact, if any, of these apportionments.

vii.

in our opinion and to the best of our information and according to the explanations given to us, subject to our comments in paragraph 3(vi) above regarding land value not having been separately ascertained, the said accounts 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;

87

UDAIPUD HOTELS LIMITED a) b) c)

in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2009, in the case of the Profit and Loss Account, of the loss for the year ended on that date, and in the case of Cash Flow Statement, of the cash flows for the year ended on that date.

For S.R. BATLIBOI & ASSOCIATES Chartered Accountants

per Raj Agrawal Partner Membership No.: 82028 Place: Gurgaon Date: 27th June, 2009

88

Annexure referred to in paragraph 3 of our report of even date Re: Udaipur Hotels Limited (i)

(a)

The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets, except for certain fixed assets, aggregating to net book value of Rs. 4,64 7,732 where the records are maintained for group of similar assets and not for each individual asset separately and also except for building of the net book value ofRs. 23,898,912 where the cost of land has not been separately determined and recorded.

(b)

Fixed assets have been physically verified by the management during the year and as informed, no material discrepancies were identified on such verification.

(c)

There was no substantial disposal of fixed assets during the year.

(ii) (a)

The management has conducted physical verification of inventory at reasonable intervals during the year.

(b)

The procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c)

The Company is maintaining proper records of inventory and no material discrepancies were noticed on physical verification.

(iii) (a)

The Company has not granted any loans, secured or unsecured to Companies, firms or other parties covered in the register maintained under section 301 of the Comapnies Act, 1956. Accordingly, the requirements of para (iii) (a) to (d) of the aforesaid order are not applicable.

(e)

The Company has taken a loan from Bharat Hotels Limited, the holding company covered in the register maintained under section 301 of the Companies Act, 1956. The maximum amount outstanding during the year was Rs. 97,219,422 and the year-end outstanding balance of loan taken from such Company was Rs. 97,219,422.

(f)

In our opinion and according to the information and explanations given to us, the rate of interest and other terms and conditions for such loan are not prima facie prejudicial to the interest of the Company.

(g)

In respect of loan taken, repayment of the principal amount is as stipulated and payment of interest have been regular.

(iv)

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 major weakness has been noticed in the internal control system in respect of these areas.

(v) (a)

Based on the audit procedures applied by us and according to the information and explanations provided by the management, we are of the opinion that the transactions that need to be entered into the register maintained under section 301 have been so entered.

(b)

In our opinion and according to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements exceeding value of Rupees five lakhs have been entered

89

UDAIPUD HOTELS LIMITED into during the financial year at prices which are reasonable having regard to the prevailing market prices at the relevant time. (vi)

The Company has not accepted any deposits from the public.

(vii)

In our opinion, the Company has an internal audit system commensurate with the size and nature of its business.

(viii)

To the best of our knowledge and as explained, the Central Government has not prescribed maintenance of cost records under clause (d) of sub-section (1) of section 209 of the Companies Act, 1956 for the products/services of the Company.

(ix) (a)

Undisputed statutory dues including provident fund, employees' state insurance, income-tax, salestax, wealth-tax, service tax, investor education and protection fund, custom duty, excise duty and cess, have generally been regularly deposited with the appropriate authorities though there has been a slight delay in a few cases.

(b)

According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, employees' state insurance, income-tax, service tax, sales tax, customs duty, investor education and protection fund, cess and other undisputed statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable, except as follows:

(c)

Name of the statute

Nature of dues

Amount (Rs)

Period to which the amount relates

ESI Act

Employee contribution

269,350

1997-1999

According to the records of the Company, the dues outstanding of income tax, wealth tax, service tax, sales tax, customs duty and cess, on account of any dispute, are as follows Name of the statute

Nature of dues

Amount (Rs)

Period to which the Forum where amount relates dispute is pending

ESI Act

Employee contribution

440,417

1997-1999

Udaipur ESI Court

(x)

The Company's accumulated losses at the end of the financial year are more than fifty percent of its net worth. The Company has incurred cash loss during the year. In the immediately preceding financial year the Company had not incurred cash loss.

(xi)

Based on our audit procedures and the information and explanations given by the management, we are of the opinion that the Company has not defaulted in repayment of dues to any bank. The Company did not have any dues in respect of a financial institution or debenture holder.

(xii)

According to the information and explanations given to us and based on the documents and records produced 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.

90

(xiii)

In our opinion, the Company is not a chit fund or a nidhi / mutual benefit fund / society. Therefore, the provisions of clause 4(xiii) of the Companies (Auditor's Report) Order, 2003 (as amended) are not applicable to the Company.

(xiv)

In our opinion, the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Companies (Auditor's Report) Order, 2003 (as amended) are not applicable to the Company.

(xv)

According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from bank or financial institutions.

(xvi)

Based on the information and explanations given to us by the management, term loans were applied for the purpose for which the loans were obtained.

(xvii)

According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that no funds raised on short-term basis have been used for longterm investment.

(xviii)

The Company has not made any preferential allotment of shares to parties or companies covered in the register maintained under section 301 of the Companies Act, 1956.

(xix)

The Company did not have any outstanding debentures during the year.

(xx)

The Company has not raised any money through a public issue during the year.

(xxi)

Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and as per the information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the course of our audit.

For S.R. BATLIBOI & ASSOCIATES Chartered Accountants

per Raj Agrawal Partner Membership No.: 82028 Place: Gurgaon Date:27th June, 2009

91

UDAIPUD HOTELS LIMITED Balance Sheet as at March 31 , 2009 (Amount in Rs.) As at March 31 2008

Schedules

As at March 31 2009

SOURCES OF FUNDS Shareholders' funds Share capital Reserve and surplus

1 2

6,074,060 35,595,630 41,669,690

6,074,060 35,595,630 41,669,690

Loan funds Secured loan Unsecured loan

3 4

8,300,000 97,219,422 105,519,422

14,427,594 92,001,310 106,428,904

147,189,112

148,098,594

96,657,223 28,373,565 68,283,658

88,192,471 23,845,773 64,346,698

4,240,717 72,524,375

— 64,346,698

2,872,636 4,684,579 6,445,639 727,436 7,879,243

2,648,981 13,780,402 24,524,232 307,131 5,985,205

22,609,533

47,245,951

16,132,235 1,926,135 18,058,370 4,551,163

24,210,358 2,931,695 27,142,053 20,103,898

708,144

1,416,288

69,405,430 147,189,112

62,231,710 148,098,594

TOTAL APPLICATION OF FUNDS Fixed assets Gross block Less: Accumulated depreciation/amortization Net block Capital work in progress (including capital advance Rs. 4,240,717 (previous year Rs. Nil ))

5

Current assets, loans and advances Inventories Sundry debtors Cash and bank balances Other current assets Loans and advances

6 7 8 9 10

(A) Less : Current liabilities and provisions Current liabilities Provisions (B) Net current assets (A-B)

11 12

Miscellaneous expenditure (to the extent not written off or adjusted) Profit and Loss Account

TOTAL Notes to accounts '&. The schedules referred to above and notes to accounts form an integral part of the Balance Sheet. As per our report of even date For S. R. BATLIBOI & ASSOCIATES Chartered Accountants per Raj Agrawal Partner Membership No. 82028 Place: Gurgaon Date:27th June, 2009

For and on behalf of the Board of Directors of Udaipur Hotels Limited Jyotsna Suri Director Place: New Delhi Date:27th June, 2009 92

Divya Suri Singh Director

Profit and Loss Account for the year ended March 31, 2009 (Amount in Rs.) For the year ended March 31,2008

Schedules

For the year ended March 31,2009

Rooms, food, beverages, banquet and other services

14

66,317,897

87,161,090

Other income

15

3,431,951

6,096,446

69,749,848

93,257,536~

7,812,178

9,020,835

INCOME

TOTAL EXPENDITURE

Consumption of food and beverage

16

Personnel expenses

17

13,114,594

11,092,930

Operating and other expenses

18

38,354,396

55,677,723

5

4,455,787

4,171,225

19

12,540,831

11,581,542

TOTAL

76,277,786

91,544,255"

(Loss) / Profit before tax and prior period items

(6,527,938)

1,713,281

398,778

23,139

(6,926,716)

1,690,142

247,004

215,000

Depreciation / amortization Financial expenses

Prior period items

20

(Loss) / Profit for the year before tax and after prior period items Fringe benefit tax Deferred tax charge/ (credit)

7,722,243

Total tax expense

247,004

7,937,243

(7,173,720)

(6,247,101)

(Loss) brought forward from earlier years

(62,231,710)

(55,984,609)

(Loss) carried to the Balance Sheet

(69,405,430)

(62,231,710)

(11.81)

(10.28)

(Loss) after tax

Earnings per share

21

Basic and Diluted [Nominal value of shares Rs. 10 (Previous Year Rs. 10)] Notes to accounts

22

The schedules referred to above and the notes to accounts form an integral part of the Profit and Loss Account. As per our report of even date For S. R. BATLIBOI & ASSOCIATES Chartered Accountants per Raj Agrawal Partner Membership No. 82028 Place: Gurgaon Date: 27th June, 2009

For and on behalf of the Board of Directors of Udaipur Hotels Limited Jyotsna Suri Director Place: New Delhi Date:27tn June, 2009

93

Divya Suri Singh

Director

UDAIPUD HOTELS LIMITED Cash Flow Statement for the year ended March 31, 2009 For the year ended March 31,2009 A. Cash flow from/fused in) operating activities Net profit/(loss) before taxation Adjustments for: Depreciation /amortisation Miscellaneous expenditure written off Provision for doubtful debts and advances Provision for doubtful advance written back Profit on sale of assets Fixed assets written off Capital work in progress written off Unrealised foreign exchange loss / (gain) Interest income Excess provisions written back Interest expense Operating profit before working capital changes Movements in working capital: Decrease/ (Increase) in sundry debtors Decrease/ (Increase) in inventories Decrease / (Increase) in other current assets Decrease / (Increase) loans and advances Increase / (Decrease) in current liabilities Increase/ (Decrease) in provisions Cash generated from/(used in) operations Direct taxes paid (net of refunds) Net cash from/(used in) operating activities B. Cash flows from/(used in) investing activities Purchase of fixed assets Sale of fixed assets Interest received Movement in investment in long term fixed deposits with banks Net cash used in investing activities

94

(Amount in Rs.) For the year ended March 31,2008

(6,926,716)

1,690,142

4,702,346 708,144 1,510,037 (298,907) (11,381)

3,980,428 925,438 3,380,981 (841,956)

(487) (703,853) (1,531,419) 12,429,911

1,244,637 572,064 (10,936) (1,389,529) (2,185,463) 11,457,738

9,877,675

18,823,544

7,884,693 (223,655) (426,193) (899,407) (5,302,550) (1,042,760) 9,867,803 (1,204,435) 8,663,368

(1,426,088) (851,259) 44,927 (531,138) 8,766,139 1,247,047 26,073,172 (1,911,166) 24,162,006

(14,542,355) 440,495 709,741 9,040,604 (4,351,515)

(8,510,379) 503,923 1,600,437 969,396 (5,436,623)

For the year ended March 31, 2009 Rs.

For the year ended March 31,2008 Rs.

Repayment of borrowings

(6,000,000)

(6,000,000)

Repayment of unsecured loans

(4,131,246)

—

Proceeds from unsecured loans

9,349,358

6,287,164

(12,557,505)

(11,511,175)

Net cash used in financing activities (13,339,393) Net (decrease) / increase in cash and cash equivalents (A + B + C) (9,027,540)

(11,224,011) 7,501,372

C. Cash flows from / (used in) financing activities

Interest paid

Cash and cash equivalents at the beginning of the year Cash and cash equivalents at the end of the year

Components of cash and cash equivalents as at

11,472,692

3,971,320

2,445,152

11,472,692

March 31,2009

March 31,2008

Cash on hand

158,133

136,504

Cheques in hand

126,295

4,048,705

Balances with scheduled banks On current accounts

2,161,211

7,298,419

On deposit accounts

4,000,000

13,040,604

6,445,639

24,524,232

(4,000,000)

(13,040,604)

(487)

(10,936)

2,445,152

11,472,692

Less: Long term deposits Less: Unrealised loss/(gain) on foreign currency cash and cash equivalents Net cash and cash equivalents

Note: 1. The cash flow statement has been prepared under the indirect method as set out in the Accounting Standard 3 "Cash Flow Statement" issued by the Institute of Chartered Accountants of India. 2. Additions to fixed assets are stated inclusive of movements of capital work-in-progress (including capital advances) and the same has been treated as part of Investing Activities. As per our report of even date ForS. R. BATLIBOI & ASSOCIATES Chartered Accountants per Raj Agrawal Partner Membership No. 82028 Place: Gurgaon Date:27th June, 2009

For and on behalf of the Board of Directors of Udaipur Hotels Limited Jyotsna Suri Director Place: New Delhi Date:27th June, 2009

95

Divya Suri Singh Director

UDAIPUD HOTELS LIMITED Schedules to the Accounts As at March 31 2009

(Amount in Rs.) As at March 31 2008

Schedule 1 : Share capital Authorized 700,000 (Previous year 700,000) equity shares of Rs.10/- each Issued, Subscribed and paid-up 607,406 (Previous year 607,406) equity shares of Rs. 10/- each fully paid

7,000,000

7,000,000

6,074,060

6,074,060

6,074,060 6,074,060 Of the above (i) 607,370(Previous year: 607,370) equity shares are held by Bharat Hotels Limited, the Holding Company. (ii) 597,406 (Previous year: 597,406) equity shares of Rs.10 each were allotted as fully paid up to erstwhile shareholders pursuant to the Order of Department of Company Affairs, Ministry of law, Justice & Company Affairs, Government of India dated 22nd February, 2002 under the Scheme of Arrangement without payment being received in cash . Schedule 2: Reserves and surplus Capital Reserve

35,595,630

35,595,630

35,595,630

35,595,630

8,300,000

14,300,000 127,594

8,300,000

14,427,594

97,219,422

92,001,310

97,219,422

92,001,310

Schedule 3 : Secured loan Loan from a bank - term loan - interest accrued and due (Secured by hypothecation of plant & machinery, furniture & fixtures and other fixed assets, present & future.) Amount repayable within one year is Rs.6,000,000 (Previous year Rs. 6,127,594)

Schedule 4 : Unsecured loan Loan from holding company Amount repayable within one year is Rs.Nil (Previous year Rs. Nil)

96

Schedule 5 : Fixed Assets Building

Plant and Computers machinery

Office Furniture Equipment and fixtures

Vehicles

Intangibles

Total

Previous year

Gross block As at April 1, 2008

29,854,663

38,901,195

1,988,814

881,361

15,884,776

72,670

608,992

88,192,471

81,602,256

-

4,989,129

1,713,400

417,813

1,186,231

83,500

678,347

9,068,420

10,264,418

Additions Deductions/(Adjustments)

—

533,217

—

29,854,663

44,423,541

3,702,214

1,299,174

17,071,007

5,357,921

9,714,137

992,036

164,267

597,830

2,297,516

499,069

138,459

—

107,626

—

5,955,751

12,119,279

As at March 31, 2009

23,898,912

As at March 31, 2008

24,496,742

As at March 31, 2009

-

—

603,668

3,674,203

85,719 1,287,339

70,451

—

96,657,223

88,192,471

6,832,183

69,147

716,082

23,845,773

21,790,988

1,182,085

6,823

(19,436)

4,702,346

3,980,428

-

-

66,928

-

174,554

1,925,643

1,491,105

302,726

8,014,268

9,042

696,646

28,373,565

23,845,773

32,304,262

2,211,109

996,448

9,056,739

76,677

590,693

68,283,658

64,346,698

29,187,059

996,779

717,094

9,052,593

3,523

(107,090)

64,346,698

59,811,268

Depreciation / amortisation As at April 1, 2008 For the period Deductions/jAdjustment) As at March 31, 2009

Net block

1.

The above depreciation includes prior period depreciation of Rs. 246,559/- [previous year Rs. (190,797)].

2.

Value of building, inter alia, includes the cost of freehold land . No separate cost of land has been depicted / accounted for in absence of details as the asset was acquired at a consolidated figure.

3.

As per past practice depreciation has been provided on the total value of Building as separate value towards freehold land is not ascertainable at present

As at March 31,2009

As at March 31,2008

Schedule 6 : Inventories Food and beverage Stores, cutlery, crockery, linen and others

1,450,133 1,422,503

1,519,162 1,129,819

2,872,636

2,648,981

190,525 8,616,229

367,491 7,057,593

4,494,053 370.972 13,671,780

13,412,911 718,478 21,556,473

8,987,201

7,776,071

4,684,579

13,780,402

Schedule 7 : Sundry debtors Debts outstanding for a period more than six months Unsecured, considered good Considered doubtful Other debts Unsecured, considered good Considered doubtful Less: Provision for doubtful debts

97

UDAIPUD HOTELS LIMITED As at March 31,2009 Rs.

As at March 31,2008 Rs.

Schedule 8 : Cash and bank balances Cash in hand

158,133

Cheques in hand

126,295

4,048,705

2,161,211 4,000,00

7,298,419 13,040,604

6,445,639

24,524,232

185,479 116,366

191,367 115,764

Balances with scheduled banks: On current accounts On deposit accounts

136,504

Schedule 9 : Other current assets Interest accrued on deposits with scheduled banks Unbilled revenue Asset held for sale

425,591 727,436

307,131

Schedule 10 : Loans and advances (Unsecured, considered good, except where otherwise stated) Advances recoverable in cash or in kind or for value to be received (Refer note 11 of Schedule 22) (including Rs. 1,267,635 considered doubtful, Previous year Rs. 1,267,635)

3,546,966

2,686,419

2,732,836

1,738,205

Security deposits

2,867,076

2,828,216 7,252,840

Less: Provision for doubtful advances

9,146,878 1,267,635

Advance tax/tax deducted at source /tax credit receivable

1,267,635

7,879,243

5,985,205

10,080,312 1,347,680 1,317,138 3,387,105

16,806,315 2,064,175 2,369,983 2,969,885

16,132,235

24,210,358

17,256

Nil

10,063,056

16,806,315

Schedule 11 : Current liabilities Sundry creditors Advance from customers Security deposit payable Other liabilities

a) Total outstanding dues of micro enterprises and small enterprises included in Sundry creditors (also refer note 9 under Schedule 22) b) Total outstanding dues other than micro enterprises and small enterprises included in Sundry creditors

98

As at March 31,2009 Rs.

As at March 31,2008 Rs.

Schedule 12: Provisions

Provision for current tax

28,000

28,000

Provision for fringe benefit tax

37,200

—

1,158,090

1 ,779,282

702,845

1,124,413

1,926,135

2,931,695

1,416,288

2,341,726

708,144

925,438

708,144

1,416,288

Provision for gratuity Provision for leave compensation

Schedule 13: Miscellaneous expenditure (to the extent not written off or adjusted) Voluntary retirement scheme expenditure Balance at the beginning of the year Less: Amortized during the year

For the year ended March 31, 2009 Rs.

For the year ended March 31,2008 Rs.

Schedule 14 : Rooms, food, beverages, banquet and other services Turnover (Gross) Room and apartment sales Food and beverage (excluding liquor and wine) Liquor, wine and tobacco Banquet rentals Other services -Telephone & telex -Others

44,250,349 23,654,296 2,614,604

40,089 1,653,679

Total (A)

1,693,768

63,639,963 25,656,821 3,630,333 600,000 125,508 1,193,407

1,318,915

72,213,017

94,846,032

Less:Value added tax Luxury tax Service tax

2,890,542 2,994,725 9,853

3,018,564 4,557,095 109,283

Total (B)

5,895,120

7,684,942

66,317,897

87,161,090

Turnover (Net) (A-B)

99

UDAIPUD HOTELS LIMITED For the year ended March 31, 2009 Rs.

For the year ended March 31,2008 Rs.

168,750

168,748

703,853

1,389,529

1,531,419

2,185,463

Provision for doubtful debts writen back

298,907

841,956

Exchange difference (net)

181,644

261,856

Schedule 15 : Other income Rental income Interest on bank deposit [IDS Rs.72,062 (Previous year Rs. 161,775)] Excess liabilities written back

Profit on sale of asset

11,381

Miscellaneous income

535,997

1,248,894

3,431,951

6,096,446

201,808

125,157

7,353,102

7,971,112

7,554,910

8,096,269

519,342

201,808

7,035,568

7,894,461

1,317,354

753,482

390,047

1,690,246

1,707,401

2,443,728

930,791

1,317,354

776,610

1,126,374

7,812,178

9,020,835

Schedule 16 : Consumption of food and beverage (net of recoveries from employees) a)

Consumption of food and beverages (excluding wine and liquor) (A)

Opening stock Add: (i) Purchases Less: Closing stock

b) Consumption of wine and liquor (B) Opening stock Add: (i) Purchases Less: Closing stock

100

For the year ended March 31, 2009 Rs.

For the year ended March 31,2008 Rs.

Schedule 17 : Personnel expenses Salary wages and bonus

10,939,213

9,379,523

Staff recruitment and training expenses

111,772

121,281

Contribution to provident and other funds

889,563

731,410

1,174,046

860,716

13,114,594

11,092,930

3,352,007 47,628 1,471,342 9,399,201 3,863,042 422,025

3,588,760 428,427 1,979,019 8,292,881 2,155,329 342,919

2,110,502 720,111 2,059,332 2,804,822 2,799,265 1,854,890 1,412,174 1,376,299 740,733

17,354,533 1,217,358 5,416,690 1 ,957,767 2,695,524 607,831 1,281,181 497,606 581 ,235

551,500 1,029,311 — — 1,510,037 830,175

561,800 431,040 1 ,244,637 572,064 3,380,981 1,090,141

38,354,396

55,677,723

Workmen and staff welfare expenses

Schedule 18 : Operating and other expenses Consumption of stores, cutlery, crockery, linen, provisions and others Rent Banquet and decoration expenses Power, fuel and water Rates and taxes Insurance Repairs and maintenance - Building - Plant and machinery - Others Traveling and conveyance Sub contracting expenses Advertisement and business promotion Commission and brokerage Printing and stationery Postage and communication costs Auditor's remuneration - Audit fee Legal and professional fees Fixed assets written off Capital work-in-progress written off Provision for doubtful debts and advances Miscellaneous expenses

101

UDAIPUD HOTELS LIMITED For the year ended March 31, 2009 Rs.

For the year ended March 31,2008 Rs.

Schedule 19 : Financial expenses Interest on term loans-bank

1,364,053

1,778,331

11,065,858

9,679,407

110,920

123,804

12,540,831

11,581,542

Depreciation

246,559

(190,797)

Repairs and maintenance-others

152,219

213,936

398,778

23,139

(7,173,720)

(6,247,101)

Weighted Average Number of Equity Shares for calculating Basic EPS

607,406

607,406

Earning per share (in Rs.) - Basic and diluted

(11.81)

(10.28)

-others Bank charges

Schedule 20: Prior period items

Schedule 21 : Earnings per share Net (Loss) after tax

102

Schedules to the Accounts Schedule 22: Notes to Accounts 1.

Nature of operations Udaipur Hotels Limited (The Company') is a subsidiary of Bharat Hotels Limited. It owns and operates The Lalit Laxmi Vilas Palace, Udaipur. The Registered office of the Company is in New Delhi.

2.

Significant accounting policies a)

Basis of preparation

The financial statements have been prepared to comply in all material respects with the Notified Accounting Standards by Companies Accounting Standards Rules, 2006 and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared under the historical cost convention on an accrual basis. The accounting policies have been consistently applied by the Company are consistent with those used in the previous year. As at March 31, 2009, the total assets are Rs. 95,133,908 (Previous year Rs. 111,592,649) whereas total liabilities are Rs. 123,561,436 (Previous year Rs. 133,570,957) [including amounts payable to the parent company Rs. 97,219,422 (Previous year Rs. 92,001,310)]. Further accumulated losses at year-end are Rs. 69,405,430 (Previous year 62,231,710). Management's budgets suggest profit in ensuing period of twelve months. The management has obtained commitment of its parent company to continuously for continued financial and operating support and considers it appropriate to prepare these financial statements on going concern basis. b)

Use of estimates

The preparation of financial statements are in conformity with generally accepted accounting principles that requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the results of operations during the reporting year end. Although these estimates are based upon management's best knowledge of current events and actions, actual results could differ from these estimates. c)

Fixed assets

Fixed assets are stated at cost (or revalued amount as the case may be), less accumulated depreciation and impairment losses, if any. Cost comprises the purchase price and any attributable cost of bringing the asset to its working condition for its intended use. Borrowing costs relating to acquisition of fixed assets which take substantial period of time to get ready are also included to the extent they relate to the period till such assets are ready to be put to use. d)

Depreciation

Depreciation is provided on Straight Line Method (SLM) over the estimated useful life of the fixed assets which is in line with the corresponding rates prescribed under Schedule XIV of the Companies Act, 1956. Depreciation on additions is provided on pro-rata basis from the date on which the assets have been put to use and individual assets acquired for less than Rs. 5,0007- are depreciated @ 100% per annum.

103

UDAIPUD HOTELS LIMITED Repairs, replacements and renovation are charged to the Profit and Loss Account, except in situations where these result in a long term economic benefit, in which case these are capitalized. e)

Impairment

The carrying amounts of assets are reviewed at each balance sheet date to determine, if there is any indication of impairment based on internal / external factors. An impairment loss is recognized if the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the asset's net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value at the weighted average cost of capital. f)

Intangibles

Intangible assets have finite useful lives and are measured at cost. The Company has considered computer software in the nature of software licenses as intangible assets, and the same is amortized over the license period or three years, being their expected useful economic lives, whichever is lower. g)

Leases

Where the Company is the lessee Leases where the lessor effectively retains substantially all the risks and benefits of ownership of the leased items are classified as operating leases. Operating lease payments are recognized as an expense in the Profit and Loss account of a straight -line basis over the lease term. h)

Inventories

Stores and spares inventory of the Company comprises cutlery, crockery, linen, other store items and food and beverage, liquor and wine items in hand , which are valued at lower of cost or net realizable value. Cost is determined on First in first out basis. Circulating stock of crockery and cutlery is charged to the profit and loss account as consumption. Unserviceable / damaged / discarded stocks and shortages observed at the time of physical verification are charged off to Profit & Loss Account. Net realizable value is the estimated selling price in the ordinary course of the business, less estimated costs necessary to make the sale. Inventory of food and beverage items in hand include items used for staff cafeteria and the same is charged to consumption, net of recoveries, when issued. i)

Revenue recognition

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. Revenue from hotel operations: Revenue from hotel operations comprise sale of rooms and apartments, food and beverages, liquor and wine, banquet rentals and other services relating to hotel operations including telecommunication, laundry, business centre, health centre, etc. Revenue is recognized when the significant risks and rewards of ownership of the goods have passed to the buyer, which coincides with the rendering of the services and are disclosed net of allowances. Taxes, such as excise duty, value added tax, luxury tax, entertainment tax and service tax is deducted from the gross revenue.

104

Rent: Income from rent is recognized over the period of the contract on an equitable straight line basis. Interest: Revenue is recognized on a time proportion basis taking into account the amount outstanding and the rate applicable. j)

Foreign currency transactions

/

Initial Recognition:

Foreign currency transactions are recorded in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of the transaction. /'/"

Conversion:

Foreign currency monetary items are reported using the closing rate. Non-monetary items which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction; and non-monetary items which are carried at fair value or other similar valuation denominated in a foreign currency are reported using the exchange rates that existed when the values were determined. ;'/'/

Exchange Differences:

Exchange differences arising on the settlement of monetary items or on reporting monetary items at rates different from those at which they were initially recorded during the year, or reported in previous financial statement recognized as income or as expenses in the year in which they arise. k)

Employee benefits:

i.

Retirement benefit in the form of Provident Fund is a defined contribution scheme and the contributions are charged to the Profit and Loss Account of the year when the contributions to the respective funds are due. There are no other obligations other than the contribution payable to the Provident Fund authorities.

ii.

Gratuity liability is a defined benefit obligation and is provided for on the basis of an actuarial valuation on projected unit credit method made at the end of each financial year.

iii.

Long term compensated absences are provided for based on actuarial valuation. The actuarial valuation is done as per projected unit credit method

iv.

Actuarial gains/losses are immediately taken to profit and loss account and are not deferred.

v.

Payments made under the Voluntary Retirement Scheme are charged to the Profit and Loss Account over a period of five years, and the balance amount is disclosed under 'Miscellaneous expenditure' to the extent not written off or adjusted.

I)

Income taxes:

Tax expense comprises of current, deferred and fringe benefit tax. Current income tax and fringe benefit tax is measured at the amount expected to be paid to the tax authorities in accordance with the Income-tax Act, 1961. Deferred income taxes reflect the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years.

105

UDAIPUR HOTELS LIMITED Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date. Deferred tax assets are recognized only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized. In situations where the Company has unabsorbed depreciation or carry forward tax losses, all deferred tax assets are recognized only if there is virtual certainty supported by convincing evidence that they can be realized against future taxable profits. At each Balance Sheet date, the Company re-assesses unrecognized deferred tax assets. It recognizes deferred tax assets to the extent that it has become reasonably certain or virtually certain, as the case may be that sufficient future taxable income will be available against which such deferred tax assets can be realized. The carrying amount of deferred tax assets are reviewed at each balance sheet date. The Company writesdown the carrying amount of a deferred tax asset to the extent that it is no longer reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available against which deferred tax asset can be realized. Any such write-down is reversed to the extent that it becomes reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available. MAT credit is recognized as an asset only when and to the extent there is convincing evidence that the Company will pay normal income tax during the specified year. In the year in which the Minimum Alternative Tax (MAT) credit becomes eligible to be recognized as an asset in accordance with the recommendations contained in Guidance Note issued by the Institute of Chartered Accountants of India, the said asset is created by way of a credit to the profit and loss account and shown as MAT Credit Entitlement. The Company reviews the same at each balance sheet date and writes down the carrying amount of MAT Credit Entitlement to the extent there is no longer convincing evidence to the effect that Company will pay normal Income Tax during the specified year. m) Segment reporting policies Identification of the segments: The Company's operating businesses are organized and managed separately according to the nature of products and services provided. Inter-segment transfers: The Company accounts for inter-segment sales and transfers as if the sales or transfers were to third parties at current market prices. Allocation of common costs: Common allocable costs are allocated to each segment according to the relative contribution of each segment to the total common costs. Unallocated items: The corporate and other segment includes general corporate income and expense items which are not allocated to any business segment. n)

Earnings per share

Basic earnings per share are calculated by dividing the net profit or loss for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the period. The weighted average number of equity shares outstanding during the period are adjusted for events of bonus issue; bonus element in a rights issue to existing shareholders; share split; and reverse share split (consolidation of shares), if any.

106

For the purpose of calculating diluted earnings per share, the net profit or loss for the year attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares, if any. o)

Provision, Contingent Liabilities and Contingent Assets:

As required by Accounting Standard 29 - 'Provisions, Contingent Liabilities and Contingent Assets' (AS 29), issued by the ICAI, provision is recognized when the Company has a present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation and when a reliable estimate of the amount of the obligation can be made. Provisions are not discounted to its present value and are determined based on best estimate required to settle the obligation at the balance sheet date. Contingent liabilities are recognized only when there is a possible obligation arising from the past events due to occurrence or non 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 of resources or where a reliable estimate of the obligation cannot be made. The obligations are reviewed at each balance sheet and adjusted to reflect the current best estimates. Contingent assets are not recognized in the financial statements. p)

Cash and cash equivalents

Cash and cash equivalents in the balance sheet comprise cash at bank and on hand and short-term investments with a maturity of three months or less. 3.

Segmental Reporting Business segments The primary reporting of the Company has been prepared on the basis of business segments. The Company has only one business segment, which is hotel operations and allied business services and operates in a single business segment based on the nature of the products, the risks and returns, the organization structure and the internal financial reporting systems. Accordingly, the figures appearing in these financial statements relate to the Company's single business segment. Geographical segments Secondary segmental reporting is prepared on the basis of the geographical location its operations. The operating interests of the Company are confined to India in terms its operations. Accordingly, the figures appearing in these financial statements relate to the Company's single geographical segment being operations in India.

4.

Related party disclosure (i)

Names of related parties Holding Company

Bharat Hotels Limited

Key management personnel

Mrs. Jyotsna Suri, Director

Relatives of the Key Managerial Personnel

Mrs. Divya Singh, daughter of Mrs. Jyotsna Suri

(ii) Enterprises over which key management personnel exercise significant influence 1. Jyotsna Holding Pvt. Ltd. 2. Deeksha Holding Limited 3. Responsible Builders Pvt. Ltd. 4. Special Protection Services Pvt. Ltd. 107

UDAIPUK HOTELS LIMITED 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. iii) iv)

Premium Exports Ltd. Prima Telecom Ltd. Premium Holding Ltd. Rohan Motors Ltd. Subros Ltd Hemkunt Services Station Pvt. Ltd. Mercantile Finance and Capital Services Ltd. Deeksha Human Resource Initiative Ltd. Premium Farm Fresh Produce Ltd. Jyoti Limited Apollo Zipper India Ltd. Prima Buildwell Private Ltd.

Transaction with above parties for sale, purchase of goods and fixed assets, rendering or availing of services is in ordinary course of business, Loans from holding company are on mutually agreed terms.

During the year, the Company entered into transactions with related parties. The value of such transactions, along with related balances as at March 31, 2009 and March 31, 2008 are presented in the following table: (Amount in Rs.) Holding company

Particulars

For the year ended March 31,2009 Rooms, food, beverages, banquet and other services - Deeksha Holding Limited Rohan Motors Limited - Subros Limited Services received - Bharat Hotels Limited Professional services taken - Deeksha Human Resource initiative Limited Fixed assets purchased from - Bharat Hotels Limited Unsecured loan taken/ (repaid) - Bharat Hotels Limited Interest on unsecured loan - Bharat Hotels Limited Balance outstanding as at the year end Unsecured loan Bharat Hotels Limited Sundry Debtors - Deeksha Holding Limited - Subros Limited Sundry Creditors Deeksha Holding Limited - Deeksha Human Resource initiative Limited

Enterprises over which key management personnel exercise significant influence

For the year ended March 31,2008

For the year ended March 31,2009

For the year ended March 31,2008

914,913 1,147,781 17,549 830,719

167,336

841,766

77,758

(4,131,246)

7,465,398

11,063,202

9,679,407

97,219,422

92,001,310 906,693 17,549 4,497 42,799

108

5.

Leases In case of assets taken on lease The Company has entered into non cancellable operating lease arrangements for Airport and restaurant services. The future minimum payments required are as follows: March 31, 2009 Rs. 3,122,054

Lease payments for the year

March 31,2008 Rs. 1,500,887

Minimum lease payments at the year end in case of balance fixed non-cancelable lease term. Not later than one year

364,000

364,000

Later than one year but not later than five years Later than five years Contingent rent 6.

As at March 31,2009 Rs.

Capital commitments Estimated amount of contracts remaining to be executed on capital account and not provided for

7.

As at March 31,2008 Rs.

32,548,451

Contingent Liabilities not provided for a)

Income tax matters While making the income tax assessments, for Assessment year 2002-03, the Assessing Officer has enhanced the taxes payable on account of disallowance of the loss pertaining to the period of operation with ITDC and deferred revenue expenditure. CIT (Appeals) has upheld the decision of the Assessing officer. The Company has filed appeal in the Income Tax Appellant Tribunal. Total amount disputed (excluding interest and penalties) in the matter amounts to Rs. 11,429,594 (previous year Rs. 11,429,594).

b)

8.

A show cause notice has been issued by the Collectors of Stamps, Udaipur in respect of stamp duty on transfer of Laxmi Vilas Palace Hotel, the erstwhile unit of India Tourism Development Corporation Limited which is being contested by the Company. Management feels, based on expert analysis, that there is no requirement for provision at this stage.

Supplementary statutory information 8.1 Director's remuneration

For the year ended March 31,2009 Rs. Nil

Salaries

109

For the year ended March 31,2008 Rs. Nil

UDAIPUD HOTEU LIMITED 8.2 Expenditure in foreign currency (on accrual basis) For the year ended March 31,2009 Rs. Expenses Nil

For the year ended March 31,2008 Rs. Nil

8.3 Earnings in foreign currency (on accrual basis) For the year ended March 31,2009 Rs. 2,485,107

Hotel earnings

9.

For the year ended March 31,2008 Rs. 4,723,753

Details of dues to Micro, Small and Medium Enterprises as per MSMED Act,2006 to the extent of confirmation received Details of dues to Micro, Small and Medium Enterprises as per MSMED Act,2006

As at March 31, 2009

The principal amount and the interest due thereon (to be shown separately) remaining unpaid to any supplier as at the end of each accounting year

17,256 (inclusive of interest amounting to Rs. 2,656)

As at March 31, 2008 Nil

The amount of interest paid by the buyer in terms of section 16, of the Micro Small and Medium Enterprise Development Act, 2006 along with the amounts of the payment made to the supplier beyond the appointed day during each accounting year

Nil

Nil

The amount of interest due and payable for the period of delay in making payment (which have been paid but beyond the appointed day during the year) but without adding the interest specified under Micro Small and Medium Enterprise Development Act, 2006.

Nil

Nil

2,656

Nil

Nil

Nil

The amount of interest accrued and remaining unpaid at the end of each accounting year; and The amount of further interest remaining due and payable even in the succeeding years, until such date when the interest dues as above are actually paid to the small enterprise for the purpose of disallowance as a deductible expenditure under section 23 of the Micro Small and Medium Enterprise Development Act, 2006

10. During the year, the Company has received a demand of security deposit from Airport Authority of India against the restaurant premises in the Airport amounting to Rs. 2,592,063 on May 22,2008. The Company has not deposited the same with the authority as on date. Management is of the view that the non payment of security deposit will not attract any penalty and the amount shall be deposited with in due course of time.

110

11. During the year, the Company has received a demand of interest of Rs. 880,793 from ESI department for late deposit of ESI demand pertaining to year 1997-1999. The ESI due was deposited in the previous year. The Company has filed an appeal with Udaipur ESI court for waiver of the said interest and deposited Rs. 440,417 under protest. The amount has been shown under 'Advance recoverable in cash or kind' under the head 'Loans and Advances'. 12. Quantitative disclosure The Company has obtained the approval from the Central Government vide Order No 46/155/2008-CL-lll dated June 11, 2008 under section 211(4) of the Companies Act, 1956 for non disclosure of quantitative information as required in compliance of Para 3 (i) (a) and 3 (ii) (d) of Part - II Schedule VI of the Companies Act, 1956 for the years ended on March 31, 2008, March 31, 2009 and March 31, 2010. Accordingly, this information has not been disclosed. 13.1

Imported and indigenous raw materials, components and spare parts consumed: Value (Rs.)

Percentage of consumption For the year For the year ended ended March 31, 2009 March 31, 2009 Food and beverage (excluding liquor and wine): Imported Indigenous

Liquor and wine Imported Indigenous

Components, stores and spares: Imported Indigenous

Value (Rs.) For the year ended March 31,2008

Percentage of consumption For the year ended March 31, 2008

—

—

—

—

7,035,568

100%

7,894,461

100%

7,035,568

100%

7,894,461

100%

776,610

100%

1,126,374

100%

776,610

100%

1,126,374

100%

3,352,007

100%

3,588,760

100%

3,352,007

100%

3,588,760

100%

13.2 Value of Imports calculated on GIF basis in respect of:

Capital Goods Total

Year ended March 31,2009 Rs. — —

Year ended March 31,2008 Rs. — —

14 Post employment benefits The Company has an unfunded defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on separation equal to 15 days salary (last drawn salary) for each completed year of continuous service or part thereof in excess of six months.

111

UDAIPUD HOTELS LIMITED The following table summaries the components of net benefit expense recognized in the Profit and Loss Account. Net employee benefit expense recognized under Salary, wages and bonus Particulars

For the year ended March 31, 2009 Rs.

For the year ended March 31,2008 Rs.

Current service cost

199,026

202,274

Interest cost on benefit obligation

139,300

124,743

(485,392)

491,155

(147,066)

818,172

As at March 31, 2009 Rs.

As at March 31, 2008 Rs.

1,158,090

1,779,282

1,158,090

1,779,282

(1,158,090)

(1,779,282)

Expected return on plan assets Net actuarial( gain) / loss recognized in the year Past service cost Net benefit expense

Details of defined benefit gratuity plan Particulars Defined benefit obligation Fair value of plan assets Present value of unfunded obligations Less: Unrecognized past service cost Plan asset / (liability)

Changes in the present value of the defined benefit gratuity plan are as follows: For the year ended March 31, 2009 Rs.

For the year ended March 31, 2008 Rs.

1,779,282

1 ,046,295

Interest cost

139,300

124,743

Current service cost

199,026

202,274

Benefits paid

474,126

85,185

Actuarial (gains) / losses on obligation

(485,392)

491,155

Closing defined benefit obligation

1,158,090

1,779,282

Particulars

Opening defined benefit obligation

112

The principal assumptions used in determining defined benefit gratuity plan obligations is shown below: Particulars

For the year ended March 31,2009

For the year ended March 31,2008

7%

8%

Salary Escalation Rate

10% for first 5 years & 7% thereafter.

10%

Attrition rate:

As per table below

As per table below

Discount rate Expected rate of return on plan assets

Attrition rate used for the year ended March 31, 2008 are as per the table below: % Withdrawal 2009

% Withdrawal 2008

Up to 30 years

15%

15%

Up to 44 years

10%

10%

Above 44 years

3%

3%

Age

The estimates of future salary increases takes into account the inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market. Amounts for the current and previous year are as follows:

Defined benefit obligation

Gratuity March 31, 2009

Gratuity March 31,2008

1,158,090

1,779,732

(1,158,090)

(1,779,732)

(407,161)

(51,806)

Plan assets Surplus/(deficit) Experience adjustments on plan liabilities Experience adjustments on plan assets Notes: 1. As per the transitional provisions of AS-15(R), the Company has continued to amortize the termination benefits in the form of voluntary retirement cost, earlier deferred over the estimated payback period of 60 months, subject to the amortization till March 31, 2010. 15. Derivative instruments and unhedged foreign currency exposure The Company does not use derivative financial instruments such as forward exchange contracts and interest rate swaps to hedge its risks associated with foreign currency fluctuations and interest rate or for trading/ speculation purpose. There is no unhedged foreign currency exposure on the balance sheet date.

113

UDAIPUD HOTELS LIMITED 16. Income tax and deferred tax Consequent to the adoption of the provisions of Accounting Standard 22 'Accounting for taxes on income', the Company would have a net deferred tax asset, primarily comprising of accumulated tax losses. However, as the management is not virtually certain of subsequent realization of the asset, no deferred tax asset has been computed or recognized in these financial statements. 17. Previous Year Comparatives Previous year figures have been regrouped wherever necessary to conform to this year's classification. As per our report of even date For S. R. BATLIBOI & ASSOCIATES Chartered Accountants per Raj Agrawal Partner Membership No. 82028 Place: Gurgaon Date: 27th June, 2009

For and on behalf of the Board of Directors of Udaipur Hotels Limited Jyotsna Suri Director Place: New Delhi Date: 27th June, 2009

114

Divya Suri Singh Director

Information pursuant to Part IV of Schedule VI to the Companies Act, 1956 Balance Sheet abstract and Company's General Business Profile: (I)

Registration Details Registration Number State Code Balance Sheet Date

(II)

U55101 DL2001 PTC 112153 055 31.03.2009

Capital raised during the year

(Amount in Rs. thousands)

Public Issue Rights Issue Bonus Issue Private Placement (III)

Nil Nil Nil Nil

Position of mobilisation and deployment of funds Total Liabilities Total Assets

(Amount in Rs. thousands) 165,247.48 165,247.48

Sources of Funds Paid up Capital Reserves & Surplus Secured Loans Unsecured Loans

6,074.06 35,595.63 8,300.00 97,219.42

Applications of Funds Net Fixed Assets Investments Net Current Assets Miscellaneous Expenditure Accumulated Losses

72,524.38 — 4,551.16 708.14 69,405.43

(IV)

Performance of the Company Turnover Total expenditure Profit(+)/Loss(-) before tax Profit(+)/Loss(-) after tax Earning Per Share (in Rs.) Dividend (in%)

(Amount in Rs. thousands) 69,749.85 76,676.56 (6,926.72) (7,173.72) (11-81) —

(V)

Generic Names of Principal Products/Services of the Company as per monetary terms Item Code No. (ITC Code) 591001006 Product Description Hotels Item Code No. (ITC Code) 390001002 Product Description Restaurants For and on behalf of the Board of Directors of Udaipur Hotels Limited Jyotsna Suri Director

Place: New Delhi Date: 27th June, 2009 115

Divya Suri Singh Director

APOLLO ZIPPED INDIA LIMITED DIRECTORS' REPORT TO THE MEMBERS

Your Directors have pleasure in presenting sixth Annual Report together with the Audited Accounts of the company for the year ended 31st March, 2009. FINANCIAL RESULTS

The company did not carry on any business activity during the period under review. COMPANY'S BUSINESS During the year under review, the Hotel has been renamed as 'The LaLiT Great Eastern, Kolkata". Renovation of the Hotel is now in full swing and it is likely that Hotel's Block -I would be operational by June 2010 and the whole Hotel will be operational by December 2010. DIVIDEND

Since the company is yet to commence its operations and currently is investing in renovation of the property, your Directors do not recommend any dividend for the period ended 31st March, 2009. DIRECTORS

Mr.Ramesh Suri and Mr.Lalit Bhasin, Directors of the Company, retire by rotation, and being eligible, offer themselves for reappointment. During the year under review, Ms. Jyotsna Suri was re-appointed as Managing Director by the Board of Directors of the company for a period of 5 years w.e.f. November 30, 2008 subject to the approval of shareholders of the company in the forthcoming General Meeting. AUDITORS

M/s S. R. Batliboi & Associates, Chartered Accountants retires at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment. The Company has received a certificate from the auditors to the effect that their re-appointment if made, would be in accordance with the provisions of Section 224(1 B) of the Companies Act, 1956. AUDITORS' OBSERVATIONS

The observations of the Auditors have been suitably explained in the notes on Accounts and do not call for any further comments. FIXED DEPOSITS

The company has not accepted any fixed deposit within the meaning of Company's (Acceptance of Deposit) Rules, 1975 during the year. PARTICULARS OF EMPLOYEES

During the period under review or part thereof, there was no employee covered under Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 as amended from time to time. 116

INFORMATION REGARDING CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION

The information required under Section 217(1 )(e) of the Companies Act, 1956, read with Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 were not applicable to the company during the period under review. FOREIGN EXCHANGE EARNING AND OUTGO During the period under review the company has not earned any foreign exchange whereas foreign exchange outgo was Rs.268.64 lacs (Previous year- Rs.280.15 lacs). 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 no material departures have been made from the same;

(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 or loss 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 and detecting fraud and other irregularities; (iv) The annual accounts have been prepared on a going concern basis; COMPLIANCE CERTIFICATE

The Company has obtained the Compliance Certificate from Practicing Company Secretary as per the Provisions of Section 383A of the Companies Act, 1956 to the effect that the Company has complied with all the Provisions of the Companies Act, 1956. A copy of the said Certificate is attached to this Report. ACKNOWLEDGEMENT

The Directors express their gratitude to Government of West Bengal, members, employees and Company's Bankers for their continuous support. For and on behalf of the Board (RAMESH SURI)

CHAIRMAN Place: New Delhi Dated: 27th June 2009.

117

APOLLO ZIPPED INDIA LIMITED SECRETARIAL COMPLIANCE CERTIFICATE COMPANY REGN. NO. NOMINAL CAPITAL

: :

21-97656 Rs. 100 LACS

To,

The Members APOLLO ZIPPER INDIA LIMITED We have examined the registers, records, books and papers of Apollo Zipper India Limited (the Company) as required to be maintained under the Companies Act, 1956, (the Act) and the rules made thereunder and also the provisions contained in the Memorandum and Articles of Association of the Company for the financial year ended on 31st March, 2009 (the said period). In our opinion and to the best of our information and according to the examinations carried out by us explanations furnished to us by the company, its officers and agents, we certify that in respect of the aforesaid financial year: 1.

The Company has kept and maintained all registers as stated in Annexure 'A' to this certificate, as per the provisions and the rules made thereunder and all entries therein have duly recorded.

2.

The Company has duly filed the forms and returns as stated in Annexure 'B' to this certificate, with the Registrar of Companies, Regional Director, Central Government, Company Law Board or other authorities within the time prescribed under the Act and the rules made thereunder.

3.

The Company, being a Public Limited Company comments are not required.

4.

The Board of Directors duly met 4 times on 24-06-2008,28-07-2008,26-12-2008, and 28-03-2009 in respect of which meetings proper notices were given and the proceedings were properly recorded and signed in the Minutes Book maintained for the purposes.

5.

The Company has not closed its Register of Members during the said period.

6.

The Annual General Meeting for the financial year ended on 31st March, 2008 was held on 11 -09-2008 after giving due notice to the members of the company and the resolutions passed thereat were duly recorded in Minutes Book maintained for the purpose.

7.

No Extra-Ordinary General Meeting was held during the said period.

8.

The Company has not advanced any loans to its directors or persons or firms or companies referred in the Section 295 of the Act during the said period.

9.

The Company has duly complied with the provisions of Section 297 of the Act in respect of contracts specified in that Section.

10. The Company has made necessary entries in the register maintained under Section 301 of the Act. 11. As there was no instance falling within the purview of Section 314 of the Act, the company has not obtained any approvals from the Board of Directors, members or Central Government, as the case may be. 12. The Company has not issued any duplicate share certificate during the said period.

118

13. The Company has: (i) (ii) (iii) (iv)

not made any allotment or transfer /transmission of shares during the year. not deposited any amount in a Separate Bank Account as no dividend was declared during the year. not posted warrants to any member of the company as no dividend was declared. duly complied with the requirement of Section 217 of the Act.

14. The Board of Directors of the company is duly constituted and the appointments of additional/casual/alternate Director(s) have been duly made. 15. The Company has re-appointed Managing Director for a period of 5 years during the said period and complied with provisions of the Act. 16. The Company has not appointed any sole-selling agents during the said period. 17. The Company was not required to obtain any approvals of the Central Government, Company Law Board, Regional Director, Registrar or such other authorities as may be prescribed under the various provisions of the Act. 18. The directors have disclosed their interest in other firms / companies to the Board of Directors pursuant to the provisions of the Act and the rules made there under. 19. The Company has not issued any equity share or any other securities during the said period. 20. The Company has not bought back any shares during the financial year. 21. There was no redemption of preference shares or debentures during the financial year. 22. There was no transaction necessitating the company to keep in abeyance the rights to dividend, rights shares and bonus shares pending registration of transfer of shares. 23. The Company has not invited/accepted any deposit including any unsecured loan falling within the purview of Section 58A during the said period. 24. The amount borrowed by the Company from bank or others during the financial year are with in borrowing limits of the company and that necessary resolutions have been passed. 25. The Company has not made loans or advances or given guarantees or provided securities to other bodies corporate during the year and consequently no entries have been made in the register kept for the purpose. 26. The Company has not altered the provisions of the memorandum with respect of situation of the company's registered office from one state to another during the period under scrutiny. 27. The Company has not altered the provisions of the memorandum with respect to the objects of the company during the period under scrutiny. 28. The Company has not altered the provisions of the memorandum with respect to the name of the company during the year under scrutiny. 29. The Company has not altered the provisions of the memorandum with respect to share capital of the company during the period under scrutiny.

119

APOLLO ZIPPED INDIA LIMITED 30. The Company has not altered its Articles of Association during the year. 31. There was no prosecution initiated against or show cause notices received by the company during the financial year, for offences under the Act. 32. The Company has not received any money as security from its employees during the said period. 33. The Company has not created any trust of PF for its employees under Section 418 of the Act, however company has been generally depositing both employee's and employer's contribution to Provident Fund with prescribed authorities regularly. For R S M & C o Company Secretaries

Place: New Delhi Dated: 27th June 2009

(RAVI SHARMA) Partner (C.P.No. 3666)

120

Annexure 'A' to Secretarial Compliance Certificate REGISTERS AS MAINTAINED BY THE COMPANY SI.No.

Name of Register

Under Section

1.

Register of Members

150

2.

Register of Share Transfer

108

3.

Register of Particulars of contracts, companies and firms in which directors are interested

301

4.

Register of Directors, Managing Director, Manager and Secretary

303

5.

Register of Directors' Shareholdings

307

6.

Books of Accounts

209

7.

Minutes of Meetings of Board of Directors

193

8.

Minutes of General Meetings

193

Annexure 'B' to Secretarial Compliance Certificate FORMS AND RETURNS AS FILED BY THE COMPANY WITH THE REGISTRAR OF COMPANIES DURING THE FINANCIAL YEAR ENDING ON 31ST MARCH, 2009.

Forms/ Returns

Under Section

For

Form 20 B (Annual Return)

159

theAGM held on 11 -09-2008 filed on 07-11-2008.

Form23AC&23ACA (Annual Report )

220

the financial year 2007-08 filed on 1 3-1 0-2008.

383A

the financial year 2007-08 filed on 1 0- 1 0-2008.

Form 66 (Compliance Certificate ) Form 23

192

Re-Appointment of Managing Director filed on 09-02-2009.

Form 25C

269

Re-Appointment of Managing Director filed on 09-02-2009.

(There was no other Forms and Returns was filed by the company with the Regional Director, Central Government or other Authorities during the Financial Year ending on 31st March, 2009 under the Act)

For R S M & Co. Company Secretaries Place: New Delhi Dated: 27th June 2009.

(RAVI SHARMA) Partner(C.P.No. 3666)

121

APOLLO ZIPPED INDIA LIMITED S.R. BATLIBOI & ASSOCIATES Chartered Accountants Auditors' Report To The Members of Apollo Zipper India Limited 1.

We have audited the attached Balance Sheet of Apollo Zipper India Limited ('the Company') as at March 31, 2009 and also the Profit and Loss Account and the Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

2.

We 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.

3.

As required by the Companies (Auditor's Report) Order, 2003 (as amended) issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4.

Further to our comments in the Annexure referred to above, we report that: i. ii. iii. iv.

v.

vi.

a) b) c)

We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit; In our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of those books; The Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account; In our opinion, the Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956. On the basis of the written representations received from the directors, as on March 31,2008, and taken on record by the Board of Directors, we report that none of the directors is disqualified as on March 31, 2009 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956. In our opinion and to the best of our information and according to the explanations given to us, the said accounts 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; in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2009; in the case of the Profit and Loss Account, loss for the year ended on that date; and in the case of Cash Flow Statement, of the cash flows for the year ended on that date.

For S.R. BATLIBOI & ASSOCIATES Chartered Accountants per Raj Agrawal Partner Membership No.: 82028 Place: Gurgaon Date: 27th June, 2009

122

Annexure referred to in paragraph 3 of our report of even date Re: Apollo Zipper India Limited ('the Company') (i)

(a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets. (b) All fixed assets were physically verified by the management in the previous year in accordance with a planned programme of verifying them once in three years which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. As informed, no material discrepancies were noticed on such verification. (c) There was no substantial disposal of fixed assets during the year.

(ii)

The Company had no trading goods, raw materials or consumables during the year. Accordingly, clause (ii) of the Companies (Auditor's Report) Order, 2003 (as amended) is not applicable to the Company.

(iii) (a) As informed, the Company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956 and hence clauses (iii) (a) to (d) of the Companies (Auditor's Report) Order, 2003 (as amended) are not applicable to the Company. (e) The Company has taken a loan from Bharat Hotels Limited, the Holding Company and a Company covered in the register maintained under section 301 of the Companies Act, 1956. The maximum amount outstanding during the year was Rs. 536,697,857 and the year-end outstanding balance of loan taken from such company was Rs. 536,697,857. (f)

In our opinion and according to the information and explanations given to us, the rate of interest and other terms and conditions for such loan are not prima facie prejudicial to the interest of the Company.

(g) In respect of loan granted, repayment of the principal amount is as stipulated and payment of interest have been regular. (iv)

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 fixed assets. During the course of our audit, no major weakness has been noticed in the internal control system in respect of this area. The Company has not made any purchases of inventory and has also not sold any goods and services during the year and hence clause (iv) of the Companies (Auditor's Report) Order, 2003 (as amended) is not applicable to the Company with respect to purchase of inventory and sale of goods and services.

(v)

(a) According to the information and explanations provided by the management, we are of the opinion that the particulars of contracts or arrangements referred to in section 301 of the Act that need to be entered into the register maintained under section 301 have been so entered. (b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements exceeding value of Rupees five lakhs have been entered into during the financial year at prices which are reasonable having regard to the prevailing market prices at the relevant time.

(vi)

The Company has not accepted any deposits from the public.

123

APOLLO ZIPPED INDIA LIMITED (vii)

In our opinion, the Company has an internal audit system commensurate with the size and nature of its business.

(viii)

To the best of our knowledge and as explained, the Central Government has not prescribed maintenance of cost records under clause (d) of sub-section (1) of section 209 of the Companies Act, 1956 for the products of the Company.

(ix) (a) Undisputed statutory dues including provident fund, employees' state insurance, income-tax, sales-tax, service tax, customs duty investor education and protection fund, wealth-tax, excise duty and cess have generally been regularly deposited with the appropriate authorities. (b) According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, employees' state insurance, income-tax, sales-tax, service tax, customs duty, investor education and protection fund, wealth-tax, excise duty, cess and other undisputed statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable. (c) According to the information and explanation given to us, there are no dues of income-tax, sales-tax, service tax, customs duty, wealth-tax and excise duty and cess which have not been deposited on account of any dispute. (x)

The Company's accumulated losses at the end of the financial year are more than fifty percent of its net worth. The Company has incurred cash losses during such financial year as well as in the immediately preceding financial year.

(xi)

The Company has no transaction with financial institutions, banks or debenture holders.

(xii)

According to the information and explanations given to us and based on the documents and records produced 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.

(xiii)

In our opinion, the Company is not a chit fund or a nidhi / mutual benefit fund / society. Therefore, the provisions of clause 4(xiii) of the Companies (Auditor's Report) Order, 2003 (as amended) Order are not applicable to the Company.

(xiv)

In our opinion, the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Companies (Auditor's Report) Order, 2003 (as amended) are not applicable to the Company.

(xv)

According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from bank or financial institutions.

(xvi)

The Company did not have any term loans outstanding during the year.

(xvii)

According to the information and explanations given to us and on an overall examination of the balance sheet o1 the Company, we report that no funds raised on short-term basis have been used for long-term investment.

(xviii)

The Company has not made any preferential allotment of shares to parties or companies covered in the register maintained under section 301 of the Companies Act, 1956.

(xix)

The Company did not have any outstanding debentures during the year.

124

(xx)

The Company has not raised any money through a public issue during the year.

(xxi)

Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and as per the information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the course of our audit. For S.R. BATLIBOI & ASSOCIATES Chartered Accountants

per Raj Agrawal Partner Membership No.: 82028 Place: Gurgaon Date: 27th June, 2009

125

APOLLO ZIPPED INDIA LIMITED Balance Sheet as at March 31, 2009

Schedules SOURCES OF FUNDS Shareholders' Funds Share capital Reserves and surplus

1 2

Loan funds Unsecured loans TOTAL APPLICATION OF FUNDS Fixed Assets Gross block Less: Accumulated depreciation Net block Capital work-in-progress (including capital advances of Rs. 64,196,045 (previous year Rs. 14,741,413)) Preoperative expenditure pending allocation Current Assets, Loans and Advances Cash and bank balances Other current assets Loans and advances

Net Current Assets Profit and Loss Account TOTAL Notes to Accounts

As at March 31,2008 Rs.

8,087,100 597,037,720 605,124,820

8,087,100

536.697.857 536,697,857 1,141,822,677

278,822,458 278,822,458 286,909,558

8,087,100

603,070,190 1,306,162 601,764,028

6 7 8

(A) Less: Current Liabilities and Provisions Current liabilities Provisions

As at March 31, 2009 Rs.

9 10

(B) (A-B)

6,032,470 993,987 5,038,483~

340,008,018 217,297,425 1,159,069,47?

132,689,345 148,672,742 286,400,570

4,042,333 196,812 2,007,348

4,537,726 65,605 1,708,610

6,246,493"

6,311,941

47,674,362 938,566 48,612,928 (42,366,435) 25,119,641 1,141,822,677

22,524,974 734,093 23,259,067 (16,947,126) 17,456,114 286,909,558

17

The schedules referred to above and notes to accounts form an integral part of the Balance Sheet. As per our report of even date For S. R. BATLIBOI & ASSOCIATES Chartered Accountants

per Raj Agrawal Partner Membership No. 82028 Place: Gurgaon Date : 27th June, 2009

For and on behalf of the Board of Directors of Apollo Zipper India Limited

Jyotsna Suri Managing Director Place: New Delhi Date : 27th June, 2009

126

Ramesh Suri Chairman

Lalit Bhasin Ashok Pahwa Keshav Suri Narinder Batra Directors

Profit and Loss Account for the year ended March 31, 2009

Schedules

For the year ended March 31, 2009 Rs.

For the year ended March 31,2008 Rs.

11

185,587

4,905,484

185,587

4,905,484

3,999,016

5,646,443

3,053,666

4,636,812

107,201

144,652

513,757

414,166

7,673,640

10,842,073

(7,488,053)

(5,936,589)

15,000

1,829,696

(7,503,053)

(7,766,285)

160,474

250,299

(7,663,527)

(8,016,584)

Balance brought forward from previous year

(17,456,114)

(9,439,530)

Deficit carried to Balance Sheet

(25,119,641)

(17,456,114)

(9.48)

(9.91)

INCOME Other income TOTAL EXPENDITURE

12 13 4 14

Personnel expenses Operating and other expenses Depreciation Financial expenses TOTAL Profit/(loss) before tax and prior period items Prior period items

15

Profit/(loss) for the year before tax Fringe benefit tax Net loss after tax

Earning/(Loss) per share Basic and Diluted [Nominal value of shares Rs. 10 (Previous Year: Rs. 10)]

16

Notes to Accounts

17

The schedules referred to above and the notes to accounts form an integral part of the Profit and Loss Account. As per our report of even date For S. R. BATLIBOI & ASSOCIATES Chartered Accountants

per Raj Agrawal Partner Membership No. 82028 Place :Gurgaon Date : 27th June, 2009

For and on behalf of the Board of Directors of Apollo Zipper India Limited

Jyotsna Suri Managing Director Place: New Delhi Date : 27th June, 2009

127

Ramesh Suri Chairman

Lalit Bhasin Ashok Pahwa Keshav Suri Narinder Batra Directors

APOLLO ZIPPER INDIA LIMITED Cash Flow Statement for the year ended March 31, 2009 For the year ended March 31, 2009 Rs.

For the year ended March 31,2008 Rs.

(7,503,053)

(7,766,285)

107,201 (185,587) 450,800

144,652 (97,792) 397,540

(7,130,639)

(7,321,885)

Movements in working capital: (Increase) in other current assets (Increase) in loans and advances Increase in provisions Increase/(decrease) in current liabilities

(131,207) (260,649) 291,556 6,414,305

(65,605) (1,051,590) — (349,098)

Cash generated from/(used in) operations Direct taxes paid Fringe benefit tax paid

(816,634) (38,089) (247,557)

(8,788,178) (17,020) (175,355)

(1,102,280)

(8,980,553)

(208,296,564) 185,587 1,420,000

(161,142,311) 97,792 (3,510,000)

(206,690,977)

(164,554,519)"

257,424,599 (48,706,735)

189,339,061 (20,356,337)

208,717,864

168,982,724

Net increase/ (decrease) in cash and cash equivalents (A+B+C) Cash and cash equivalents at the beginning of the year

924,607 1,027,726

(4,552,348) 5,580,074

Cash and cash equivalents at the end of the year

1,952,333

1,027,726

A. Cash flow (used in)/from operating activities Net loss before taxation and after prior period expenses Adjustments for: Depreciation Interest income Interest cost

Net cash from/(used in) operating activities B. Cash flow from/(used in) investing activities Purchase of fixed assets * Interest received Movement in investment in long term fixed deposits with banks Net cash from/(used in) investing activities C. Cash flow from financing activities Proceeds from long term borrowings Interest paid Net cash from financing activities

128

Components of cash and cash equivalents as at

March 31, 2009

March 31,2008

Cash on hand Balances with scheduled banks: On current accounts Margin money held as security

2,664

30,899

1,949,669 2,090,000

996,827 3,510,000

Less : Long term deposits

4,042,333 2,090,000

4,537,726 3,510,000

1,952,333

1,027,726

Notes: *1. Additions to Fixed Assets are stated inclusive of movements of Capital work-in-progress (including capital advances) and Preoperative expenditure pending allocation and the same has been treated as part of Investing Activities. 2. The cash flow statement has been prepared under the indirect method as set out in the Accounting Standard 3 "Cash Flow Statement" issued by the Institute of Chartered Accountants of India.

As per our report of even date For S. R. BATLIBOI & ASSOCIATES Chartered Accountants

per Raj Agrawal Partner Membership No. 82028 Place :Gurgaon Date : 27th June, 2009

For and on behalf of the Board of Directors of Apollo Zipper India Limited

Jyotsna Suri Managing Director Place: New Delhi Date : 27th June, 2009

129

Ramesh Suri Chairman

Lalit Bhasin Ashok Pahwa Keshav Suri Narinder Batra Directors

APOLLO ZIPPED INDLV LIMITED Schedules to the Accounts As at March 31,2009 Rs.

As at March 31,2008 Rs.

10,000,000

10,000,000

6,067,100

6,087,100

Schedule 1 : Share capital Authorised 1,000,000 (previous year: 1,000,000) equity shares of Rs. 10/- each Issued and Subscribed 808,710 (previous year: 808,710) equity shares of Rs. 10/- each fully paid

Of the above: (i) 727,832 (previous year 727,832) equity shares are held by Bharat Hotels Limited, the Holding Company, (ii) 798,710 (previous year 798,710) equity shares of Rs.10 each were issued as fully paid up for consideration other than cash.

Schedule 2 : Reserves and surplus Revaluation reserve Additions during the year (refer note 13 under schedule 17)

597,037,720 597,037,720

Schedule 3 : Unsecured loans From Holding Company Amount repayable within one year Rs. Nil (Previous year Rs. Nil)

130

536,697,857

278,822,458

536,697,857

278,822,458

Schedule 4 : Fixed assets (Amount in Rs.) Land Freehold

Building

Furniture Office Computers Vehicles and fixtures equipment

Total

Previous year

Gross Block As at April 1, 2008

3,692,280

71,968

32,500

444,490

242,288

1,548,944

6,032,470

5,949,218

597,037,720

—

—

—

—

—

597,037,720

—

Additions

—

—

—

—

—

—

—

83,252

Deductions

—

—

—

—

—

—

—

—

600,730,000

71,968

32,500

444,490

242,288

1,548,944

603,070,190

6,032,470

As at April 1, 2008

—

9,327

4,593

132,393

126,860

720,814

993,987

538,208

For the year *

—

3,132

5,051

43,410

46,179

214,403

312,175

455,779

Deletions

—

—

—

—

—

—

-

—

As at March 31, 2009

—

12,459

9,644

175,803

173,039

935,217

1,306,162

993,987

For for previous year

—

9,327

4,593

141,514

117,739

720,817

993,990

538,208

600,730,000

59,509

22,856

268,687

69,249

613,727

601,764,028

5,038,483

3,692,280

62,641

27,907

312,097

115,428

828,130

5,038,483

5,411,010

Additions on account of revalution (refer note 13 under schedule 17)

As at March 31, 2009 Depreciation

Net block As at March 31, 2009 As at March 31, 2008

* including depreciation amounting to Rs. 204,974 (previous year: Rs. 311,127) transferred to Preoperative expenditure pending allocation Note: The Company has created equitable mortgage of its property together with building, structures, fixtures and machineries, both present and future, in favour of the Holding Company's bankers viz. Canara Bank and the Jammu & Kashmir Bank, for the loans availed by the Holding Company.

As at March 31,2009 Rs.

As at March 31,2008 Rs.

148,672,742

45,217,501

6,560,085

3,752,840

Schedule 5 : Preoperative expenditure pending allocation Balance as per last account Additions during the year: Salaries, wages and bonus Gratuity expenses

61,883

Leave compensation expenses

155,675

Contribution to provident fund and other payments

412,179

183,575

3,862,084

9,502,917

Legal and professional fees Workmen and staff welfare expenses

345,970

Lease rent

588,400

198,000

Power and fuel

577,177

462,345

Rates and taxes

162,715

50,440,609

131

APOLLO ZIPPED INDIA LIMITED

Insurance Repairs and maintenance

As at March 31,2009 Rs.

As at March 31,2008 Rs.

1,612,468

1,620,197

247,886

381,619

Freight and cartage

259,066

Sub-contracting expenses

2,802,650

3,255,767

Travelling and conveyance

996,842

1,255,538

Depreciation

204,974

311,127

1,326,960

13,305,000

48,706,735

20,356,337

217,297,425

150,502,438

Expenses incurred for vacation of shops and offices (Refer note no. 7 in Schedule 17) Interest on loans Less: expensed off during the year

1,829,696

Closing balance

217,297,425

148,672,742

2,664

30,899

1,949,669

996,827

2,090,000

3,510,000

4,042,333

4,537,726

196,812

65,605

196,812

65,605

847,239

873,590

1,105,000

818,000

55,109

17,020

2,007,348

1,708,610

Schedule 6 : Cash and bank balances Cash in hand Balances with scheduled banks: On current accounts On deposit accounts - Margin money held as security

Schedule 7 : Other current assets Interest accrued on deposits with banks

Schedule 8 : Loans and advances Unsecured, considered good: Advances recoverable in cash or kind or for value to be received Security deposits Advance taxes

132

As at March 31, 2009 Rs.

As at March 31,2008 Rs.

Sundry creditors - total outstanding dues of Micro and Small Enterprises (Refer note 12 under schedule 17) - total outstanding dues of creditors other than Micro and Small Enterprises

35,003,307

17,234,707

Other liabilities

12,671,055

5,290,267

47,674,362

22,524,974

14,862

101,945

Provision for gratuity

343,061

240,300

Provision for leave compensation

580,643

391,848

938,566

734,093

For the year ended March 31, 2009 Rs.

For the year ended March 31,2008 Rs.

Schedule 9 : Current liabilities

Schedule 10: Provisions Provision for fringe benefit tax

Schedule 11 : Other income Sale of scrap

5,000,000

Less: Value added tax

192,308 4,807,692

Interest: Bank deposits (Tax deducted at source Rs.38,089, previous year Rs.17,020)

185,587

97,792

185,587

4,905,484

3,374,781

4,069,428

40,878

147,615

Leave compensation expenses

102,836

401,293

Contribution to provident fund and other payments

178,220

286,427

Workmen and staff welfare expenses

302,301

741,680

3,999,016

5,646,443

Schedule 12 : Personnel expenses Salaries, wages and bonus Gratuity expenses

133

APOLLO ZIPPEP INDIA LIMITED For the year ended March 31, 2009 Rs.

For the year ended March 31 , 2008 Rs.

181,712

—

27,650

83,176

Lease rent

273,920

336,902

Rates and taxes

612,534

660,112

74,114

28,101

198,319

252,690

62,412

239,767

—

41 ,090

Travelling and conveyance

356,499

1 ,507,343

Communication costs

221,606

328,577

Printing and stationery

81,186

69,668

318,647

348,261

Books and periodicals

7,350

6,799

Fees and subscription

17,822

19,382

210,000

220,000

330,900

337,080

Exchange difference (net)

35,999

94,967

Miscellaneous expenses

42,996

62,897

3,053,666

4,636,812

450,800

397,540

62,957

16,626

513,757

414,166

Schedule 13 : Operating and other expenses Sub-contracting expenses Power and fuel

Insurance Repairs and maintenance : - Others Advertisement and business promotion Commission and brokerage

Legal and professional fees

Directors fees Auditors Remuneration : - Audit fee

Schedule 14 : Financial expenses Interest - others Bank charges

134

Schedule 15 : Prior period items Lease rent

10,000

Rates and taxes

891,439

Advertisement and business promotion

90,000

Travelling and conveyance

216,087

Communication costs

153,445

Printing and stationery

52,594

Legal and professional fees

15,000

Miscellaneous expenses

272,763

Fringe benefit tax

143,368 15,000

1,829,696

(7,663,527)

(8,016,584)

808,710

808,710

10

10

(9.48) (9.48)

(9.91) (9.91)

Schedule 16: Earnings/floss) per share Net loss for the year as per Profit and Loss Account Weighted average number of equity shares in calculating basic & diluted EPS Nominal value of equity share Loss per share - Basic - Diluted

135

APOLLO ZIPPED INDIA LIMITED Schedule 17 Notes to Accounts 1.

Nature of Operations The Company is in the business of constructing and operating hotels. The Company is yet to commence any operations and is currently engaged in the process of complete renovation / re-construction of The Lalit Great Eastern Hotel, Kolkata.

2.

Statement of Significant Accounting Policies a)

Basis of preparation

The financial statements have been prepared to comply in all material aspects with the Notified Accounting Standards by Companies Accounting Standards Rules, 2006 and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared under the historical cost convention on an accrual basis. The accounting policies have been consistently applied by the Company and are consistent with those used in the previous year. As at March 31,2009, the total assets of the Company are Rs. 1,165,315,964 (inclusive of revalued amount of land, Rs. 597,037,720) (Previous year Rs. 292,712,511) whereas total liabilities are Rs. 585,310,785 (Previous year Rs. 302,081,525 [including amounts payable to the parent company Rs. 536,697,857 (Previous year Rs. 278,822,458)]. Further, the accumulated losses at year-end are Rs. 25,119,641 (Previous year 17,456,114). The management has obtained commitment of its parent company for continued financial and operating support and considers it appropriate to prepare these financial statements on going concern basis. b)

Use of estimates

The preparation of financial statements are in conformity with generally accepted accounting principles that requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the results of operations during the reporting year end. Although these estimates are based upon management's best knowledge of current events and actions, actual results could differ from these estimates. c)

Fixed Assets

Fixed assets are stated at cost (or revalued amounts, as the case may be), less accumulated depreciation and impairment losses if any. Cost comprises the purchase price and any attributable cost of bringing the asset to its working condition for its intended use. Borrowing costs relating to acquisition/construction of fixed assets, which takes substantial period of time to get ready for its intended use are also included to the extent they relate to the period till such assets are ready to be put to use. d)

Depreciation

Depreciation is provided on Written down Value (WDV) over the estimated useful life of the fixed assets which coincides with the corresponding rates prescribed under Schedule XIV of the Companies Act, 1956. Depreciation on additions is provided on pro-rata basis from the date on which the assets have been put to use and individual assets acquired for less than Rs. 5,000/- are depreciated @ 100% per annum.

136

Assets taken on lease are amortized over the period of primary lease or useful life, whichever is lower. Repairs, replacements and renovation are charged to the Profit and Loss Account, except in situations where these result in a long term economic benefit, in which case, these are capitalized. e)

Impairment

The carrying amounts of assets are reviewed at each balance sheet date to determine, if there is any indication of impairment based on internal / external factors. An impairment loss is recognized wherever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the asset's net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value at the weighted average cost of capital. f)

Leases

Leases where the lessor effectively retains substantially all the risks and benefits of ownership of the leased item, are classified as operating leases. Operating lease payments are recognized as an expense in the Profit and Loss account on a straight-line basis over the lease term. g)

Revenue recognition

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. Revenue is recognized when the significant risks and rewards of ownership of the goods have passed to the buyer. Value added tax is deducted from turnover (gross) is the amount that is included in the amount of turnover (gross) and not the entire amount of liability arised during the year. Interest Revenue is recognized on a time proportion basis taking into account the amount outstanding and the rate applicable. h)

Foreign currency translation

i) Initial Recognition Foreign currency transactions are recorded in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of the transaction. li) Conversion Foreign currency monetary items are reported using the closing rate. Non-monetary items which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction; and non-monetary items which are carried at fair value or other similar valuation denominated in a foreign currency, are reported using the exchange rates that existed when the values were determined. Hi) Exchange Differences Exchange differences arising on the settlement of monetary items or on reporting monetary items at rates different from those at which they were initially recorded during the year, or reported in previous financial statement are recognized as income or as expenses in the year in which they arise.

137

APOLLO ZIPPED INDIA LIMITED i)

Employee benefits

i.

Retirement benefit in the form of Provident Fund is a defined contribution scheme and the contributions are charged to the Profit and Loss Account of the year when the contributions to the respective funds are due. There are no other obligations other than the contribution payable to the Provident Fund authorities. ii. Gratuity liability is a defined benefit obligation and is provided for on the basis of an actuarial valuation on projected unit credit method made at the end of each financial year. iii. Long term compensated absences are provided for based on actuarial valuation. The actuarial valuation is done as per projected unit credit method at the end of the each financial year. iv. Actuarial gains/losses are immediately taken to profit and loss account and are not deferred j)

Income taxes

Tax expense comprises of current, deferred and fringe benefit tax. Current income tax and fringe benefit tax is measured at the amount expected to be paid to the tax authorities in accordance with the Indian Income Tax Act. Deferred income taxes reflects the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years. Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date. Deferred tax assets are recognised only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised. In situations where the company has unabsorbed depreciation or carry forward tax losses, all deferred tax assets are recognised only if there is virtual certainty supported by convincing evidence that they can be realised against future taxable profits. At each balance sheet date the Company re-assesses unrecognised deferred tax assets. It recognises unrecognised deferred tax assets to the extent that it has become reasonably certain or virtually certain, as the case may be that sufficient future taxable income will be available against which such deferred tax assets can be realised. The carrying amount of deferred tax assets are reviewed at each balance sheet date. The company writesdown the carrying amount of a deferred tax asset to the extent that it is no longer reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available against which deferred tax asset can be realised. Any such write-down is reversed to the extent that it becomes reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available. k)

Preoperative expenditure pending allocation

Expenditure directly relating to construction activity is capitalized. Indirect expenditure incurred during construction period is recognized as part of the indirect construction cost to the extent to which the expenditure is related to construction or is incidental thereto and is charged to preoperative expenditure pending allocation. Other indirect expenditure (including borrowing costs) incurred during the construction period which is not related to the construction activity nor is incidental thereto is charged to the Profit and Loss Account. Income earned during construction period is deducted from the total of the indirect expenditure during construction period. I)

Borrowing costs

Borrowing costs include interest and commitment charges on borrowings, amortization of costs incurred in connection with the arrangement of borrowings and finance charges under leases. Costs incurred on borrowings, directly attributable to development projects, which take a substantial period of time to complete, are capitalized and all other borrowing costs are recognized in the Profit and Loss Account in the period in which they are incurred. 138

m) Earnings/(loss) Per Share Basic earnings per share are calculated by dividing the net profit or loss for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the period. The weighted average number of equity shares outstanding during the period are adjusted for events of bonus issue; bonus element in a rights issue to existing shareholders; share split; and reverse share split (consolidation of shares), if any. For the purpose of calculating diluted earnings per share, the net profit or loss for the year attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares, if any. n)

Provision, Contingent liabilities and Contingent Assets

As required by Accounting Standard 29 - 'Provisions, Contingent Liabilities and Contingent Assets' (AS 29), issued by the ICAI, provision is recognized when the Company has a present obligation as a result of a past event and it is probable that an outflow of resources will be required to settle the obligation and when a reliable estimate of the amount of the obligation can be made. Provisions are not discounted to its present value and are determined based on best estimates required to settle the obligation at the balance sheet date. Contingent liabilities are recognized only when there is a possible obligation arising from past events due to occurrence or non 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 of resources or where a reliable estimate of the obligation cannot be made. The obligations are reviewed at each balance sheet and adjusted to reflect the current best estimates. Contingent assets are not recognized in the financial statements. o)

Cash and cash equivalents

Cash and cash equivalents in the balance sheet comprise cash at bank and in hand and short-term investments with a maturity of three months or less. 3.

Segment Information The Company has only one reportable business segment, which is operating hotels and it operates in a single business segment based on the nature of the services, the risks and returns, the organization structure and the internal financial reporting systems. Accordingly, the figures appearing in these financial statements relate to the Company's single business segment. The Company is yet to commence operations and as such, there is nothing to report on geographical segment results.

4.

Income tax and deferred tax i.)

Current income tax has not been provided in these financial statements in the absence of taxable profits in the current year.

ii.)

Consequent to the adoption of the provisions of Accounting Standard 22 'Accounting for taxes on income', the Company would have a net deferred tax asset, primarily comprising of accumulated tax losses and unabsorbed depreciation. However, as the management is not virtually certain of subsequent realization of the asset, no deferred tax asset has been computed or recognized in these financial statements.

139

APOLLO ZIPPED INDIA LIMITED 5.

Related Party Disclosures i.)

Holding Company: Bharat Hotels Limited Names of other related parties with whom transactions have taken place during the year:

ii)

Key Management Personnel: 1. Ms. Jyotsna Suri - Managing Director

iii)

Relatives of Key Management Personnel: 1. Mr. Ramesh Suri - Chairman 2. Mr. Keshav Suri - Director

iv)

Enterprises owned or significantly influenced by key management personnel or their relatives: 1. Deeksha Human Resource Initiatives Limited

v)

Loan taken from the Holding Company is repayable on demand.

vi)

Transactions with above parties are in the ordinary course of business.

vii) The Holding Company has given Corporate Guarantee amounting to Rs. 15,084,199 to the Customs Authority for issue of licenses under the 'Export Promotion Credit Guarantee' Scheme to the Company. (Amounts in Rs.) Nature of Transaction

Holding Company

Current Year

Previous Year

Key management personnel

Current Year

Previous Year

Relatives of key management personnel

Current Year

Total

Enterprises owned or significantly Influenced by key management personnel or their relatives

Previous Year

Current Year

Previous Year

Current Year

Previous Year

Loans received (Net) Bharat Hotels Limited

219,856,961

173,685,553

-

219,856,961

173,685,553

Total

219,856,961

173,685,553

-

219,856,961

173,685,553

Bharat Hotels Limited

49,157,535

20,753,877

-

49,157,535

20,753,877

Total

49,157,535

20,753,877

-

49,157,535

20,753,877

Interest expense

Directors' fees Jyotsna Suri

-

40,000

-

40,000

40,000

Ramesh Suri

-

-

40,000

40,000

40,000

40,000

Keshav Suri

-

-

20,000

20,000

20,000

20,000

40,000

60,000

60,000

100,000

100,000

Total

40,000

40,000

Legal and professional fees Deeksha Human Resource Initiatives Ltd.

134,420

161,967

134,420

161,967

Total

134,420

161,967

134,420

161,967

7,578,282

7,505,917

536,697,857

278,822,458

Corporate guarantee given Bharat Hotels Limited

7,578,282

7,505,917

536,697,857

278,822,458

-

Balance outstanding as at the year end Accounts payable Bharat Hotels Limited

-

Deeksha Human Resource Initiatives Ltd. Total

9,963 536,697,857

278,822,458

15,084,199

7,505,917

-

9,963

9,963 536,697,857

278,832,421

Corporate guarantee outstanding Bharat Hotels Limited

-

140

15,084,199

7,505,917

6.

Capital Commitments Estimated amount of contracts remaining to be executed and not provided for amounts to Rs 401,234,688 (previous year: Rs 443,303,891)

7.

During earlier years, the Company had given certain portion of the premises to various entities and individuals on rent. During previous year after acquisition by BHL, the renovation of the property was initiated, for which it was necessary to have the afore-mentioned rented out portions vacated. As a compensation for relinquishment of the tenancy rights during the year, the Company has paid an amount of Rs. 1,326,960 (previous year Rs. 13,305,000). As at the year-end, three tenants are yet to vacate the premises and the Company is in the process of negotiating the settlement with them and at this stage, it is not feasible to quantify the amount of settlement required, if any and therefore, no amount has been accrued for this matter in these financial statements.

8.

Contingent Liabilities not provided for (Amounts in Rs.) Particulars Export commitment against EPCG licenses obtained Duty payable in export commitment not met

9.

March 31, 2009

March 31 , 2008

159,469,832

100,120,168

19,933,729

12,515,021

Post employment plan The Company has an unfunded defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on separation equal to 15 days salary (last drawn salary) for each completed year of continuous service or part thereof in excess of six months. The following table summaries the components of net benefit expense recognized in the Profit and Loss Account. Profit and Loss account Net employee benefit expense recognized under Preoperative expenditure pending allocation and Personnel expenses under Schedule 5 and 12 respectively: (Amounts in Rs.) Particulars

For the year ended For the year ended March 31 , 2009 March 31 , 2008 Rs. Rs.

Current service cost Interest cost on benefit obligation Net actuarial (gain) / loss recognised in the year

132,139

142,429

29,795

7,415

(59,173)

(2,229)

102,761

147,615

Past service cost Net benefit expense

141

APOLLO ZIPPED INDIA LIMITED Details of defined benefit gratuity plan: (Amounts in Rs.) Particulars

Defined benefit obligation Fair value of plan assets Less: Unrecognised past service cost Plan asset/ (liability)

As at March 31, 2009 Rs.

As at March 31 , 2008 Rs.

343,061

240,300

(343,061)

(240,300)

Changes in the present value of the defined benefit obligation are as follows: (Amounts in Rs.) Particulars

For the year ended March 31,2009 Rs.

Opening defined benefit obligation

For the year ended March 31,2008

Rs.

240,300

Interest cost

29,795

7,415

132,139

235,114

Actuarial (gains) / losses on obligation

(59,173)

(2,229)

Closing defined benefit obligation

343,061

240,300

Current service cost Benefits paid

The principal assumptions used in determining gratuity obligations for the Company's plan are shown below: Particulars

For the year ended March 31,2009 Rs.

For the year ended March 31,2008 Rs.

7%

8%

10% for first 5 years and 7% thereafter

10%

Upto 30 years

15%

15%

Upto 44 years

10%

10%

Above 44 years

3%

3%

Discount rate Future salary Increase Expected rate of return on plan assets Employee turnover:

The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

142

Gratuity liability as at the year end is as follows (Amounts in Rs.) March 31,2009

March 31,2008

343,061

240,300

(343,061)

(240,300)

(35,161)

(20,029)

Defined benefit obligation Plan assets Surplus / (deficit) Experience adjustments on plan liabilities Experience adjustments on plan assets 10. Derivative instruments and un hedged foreign currency exposure

Particulars of un hedged foreign currency exposure as at the Balance Sheet date : (Amounts in Rs.) March 31,2009

Particulars Capital Advances

March 31,2008 180,575

11. Supplementary Statutory Information Expenditure in foreign currency on accrual basis (including expenditure incurred during construction period - pending capitalization): (Amounts in Rs.) March 31,2009

Particulars Traveling and conveyance

March 31,2008 726,540

Legal and professional fees

289,043

5,415,468

Value of imports calculated on GIF basis: (Amounts in Rs.) Particulars Capital goods

March 31,2009

March 31,2008

26,574,549

21,872,543

12. Details of dues to Micro, Small and Medium Enterprises as per MSMED Act, 2006 to the extent of confirmation received. Details of dues to Micro, Small and Medium Enterprises as per MSMED Act, 2006 The principal amount and the interest due thereon (to be shown separately) remaining unpaid to any supplier as at the end of each accounting year The amount of interest paid by the buyer in terms of section 16, of the Micro Small and Medium Enterprise 143

As at March 31,2009

As at March 31,2008

Nil

Nil

APOLLO ZIPPED INDIA LIMITED Development Act, 2006 along with the amounts of the payment made to the supplier beyond the appointed day during each accounting year

Nil

Nil

The amount of interest due and payable for the period of delay in making payment (which have been paid but beyond the appointed day during the year) but without adding the interest specified under Micro Small and Medium Enterprise Development Act, 2006.

Nil

Nil

The amount of interest accrued and remaining unpaid at the end of each accounting year; and

Nil

Nil

The amount of further interest remaining due and payable even in the succeeding years, until such date when the interest dues as above are actually paid to the small enterprise for the purpose of disallowance as a deductible expenditure under section 23 of the Micro Small and Medium Enterprise Development Act, 2006

Nil

Nil

13. The Company appointed Government Registered Estate Valuer to assess the fair market value of the land and accordingly revalued the book value of Land to Rs. 600,730,000 compared to original value of Rs. 3,692,280 as at March 31,2009. This has resulted in creation of revaluation reserve aggregating Rs. 597,037,720. 14. Previous Year Comparatives Previous year figures have been regrouped wherever necessary to conform to this year's classification. As per our report of even date For S. R. BATLIBOI & ASSOCIATES Chartered Accountants per Raj Agrawal Partner Membership No. 82028 Place :Gurgaon Date : 27th June, 2009

For and on behalf of the Board of Directors of Apollo Zipper India Limited Jyotsna Suri Managing Director Place : New Delhi Date : 27th June, 2009

144

Ramesh Suri Chairman

Lai it Bhasin Ashok Pahwa Keshav Suri Narinder Batra Directors

Information pursuant to Part-IV of Schedule VI to the Companies Act, 1956 Balance Sheet Abstract and Company's General Business Profile: (I)

Registration Details Registration Number State Code Balance Sheet Date

97656 21 31.03.2009

(II)

Capital raised during the year Public Issue Rights Issue Bonus Issue Private Placement

(Amount in Rs. thousands) Nil Nil Nil Nil

(III)

Position of mobilisation and deployment of funds Total Liabilities Total Assets

(Amount in Rs. thousands) 1,190,435.61 1,190,435.61

Sources of Funds Paid up Capital Reserves & Surplus Secured Loans Deferred payment liabilities Unsecured Loan Deferred tax liabilities

8,087.10 597,037.72 — — 536,697.86 —

Applications of Funds Net Fixed Assets [including Capital Work in Progress & Pre operative expenses] Investments Net Current Assets Miscellaneous Expenditure Accumulated Losses

1,159,069.47 — (42,366.44) — 25,119.64

(IV)

Performance of the Company Turnover Total Expenditure Profit(+)/Loss(-) before tax Profit(+)/Loss(-) aftertax Earning Per Share (in Rs.) Dividend (in %)

(Amount in Rs. thousands) — 7,688.64 (7,503.05) (7,663.53) (9.48) —

(V)

Generic Names of Principal Products/Services of the Company as per monetary terms Item Code No. (ITC Code) 591001006 Product Description Hotels Item Code No. (ITC Code) Product Description For and on behalf of the Board of Directors of Apollo Zipper India Limited Jyotsna Suri Managing Director

Place :New Delhi Date : 27th June, 2009 145

Ramesh Suri Chairman

Lalit Bhasin Ashok Pahwa Keshav Suri Narinder Batra Directors

PRIME CELLULAR LIMITED (Formerly known as Prime Cellular Private Limited)

DIRECTORS' REPORT TO THE MEMBERS Your Directors have pleasure in presenting 14th Annual Report together with the Audited Accounts of the company for the year ended 31st March 2009. FINANCIAL RESULTS The Annual Accounts for the financial year ended 31st March 2009 have shown a net profit of Rs. 12.21 lacs (Previous Year- Net Loss Rs. 13.36 Lacs) and after considering earlier loss amounting of Rs. 107.07 lacs a deficit amount of Rs.94.86 lacs has been carried over to the Balance Sheet. DIVIDEND In view of the financial position of the Company, your Directors do not recommend any dividend for the financial year ended 31st March, 2009. JOINT VENTURE Kujjal Builders Private Limited, the joint venture company with Eila Builders and Developers Private Limited, a wholly owned subsidiary of DLF Limited was engaged in construction of a hotel and convention centre at Chandigarh. AUDIT COMMITTEE The Audit Committee of the Board is duly constituted according to the provisions of Section 292A of the Companies Act, 1956. The Committee comprises of three Non-executive Directors viz Ms.Jyotsna Suri, Mr.Ramesh Suri and Ms.Deeksha Suri. DIRECTORS In terms of the provisions of the Companies Act, 1956 and Articles of Association of the Company, Ms.Jyotsna Suri and Mr.Ramesh Suri, Directors of the company retire by rotation and being eligible offer themselves for reappointment at the ensuing Annual General Meeting. 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 had been followed along with proper explanation relating to material departures;

(ii)

the directors had selected such accounting policies and applied consistently and made judgments and estimates 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 loss of the company for that period;

(iii)

the directors had taken proper and sufficient care 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 directors had prepared the Annual Accounts on a going concern basis.

146

AUDITORS

M/s S. R. Batliboi & Associates, Chartered Accountants retires at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment. The Company has received a certificate from the auditors to the effect that their re-appointment if made, would be in accordance with the provisions of Section 224(1 B) of the Companies Act, 1956. AUDITORS' OBSERVATIONS

The other observations of the Auditors have been suitably explained in the notes on Accounts and do not call for any further comments. FIXED DEPOSITS

Your Company has not accepted/invited any deposits from the Public for the year under review within the meaning of Section 58A of the Companies Act, 1956 and the rules made there under.

INFORMATION U/S. 217(1 )(e) OF THE COMPANIES ACT, 1956 READ WITH THE COMPANIES (DISCLOSURE OF PARTICULARS IN THE REPORT OF BOARD OF DIRECTORS) RULES, 1988.

Conservation of Energy, Technology Absorption, Foreign Exchange earnings and Outgo: a)

Conservation of Energy, Technology Absorption: Not Applicable

b)

Foreign Exchange earnings and outgo: During the period under review there was no earning and outgo on account of foreign exchange.

PARTICULARS OF EMPLOYEES

During the period under review or part thereof, there was no employee covered under Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 as amended from time to time. ACKNOWLEDGEMENT

The Directors express their gratitude to the shareholders and Banks for their continued support to the Company's progress during the year under review for and on behalf of the Board

(JYOTSNASURI) CHAIRPERSON

Place: New Delhi Dated: 27th June 2009.

147

PDIME CELLULAR LIMITED (Formerly known as Prime Cellular Private Limited)

S.R. BATLIBOI & ASSOCIATES

Chartered Accountants Auditors' Report To The Members of Prime Cellular Limited (formerly known as Prime Cellular Private Limited)

1.

We have audited the attached Balance Sheet of Prime Cellular Limited (formerly known as Prime Cellular Private Limited) ('the Company') as at March 31,2009 and also the Profit and Loss Account and the Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

2.

We 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.

3.

As required by the Companies (Auditor's Report) Order, 2003 (as amended) issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4.

Further to our comments in the Annexure referred to above, we report that: i.

We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit;

ii.

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;

iii.

The Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account;

iv.

Incur opinion, the Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956.

v.

On the basis of the written representations received from the directors, as on March 31,2009, and taken on record by the Board of Directors, we report that none of the directors is disqualified as on March 31, 2009 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

vi.

In our opinion and to the best of our information and according to the explanations given to us, the said accounts 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;

148

a)

in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2009;

b)

in the case of the Profit and Loss Account, profit for the year ended on that date; and

c)

in the case of Cash Flow Statement, of the cash flows for the year ended on that date.

For S.R. BATLIBOI & ASSOCIATES Chartered Accountants

per Raj Agrawal Partner Membership No.: 82028 Place: Gurgaon Date: 27th June, 2009

149

PRIME CELLULAR LIMITED (Formerly known as Prime Cellular Private Limited)

Annexure referred to in paragraph 3 of our report of even date Re: Prime Cellular Limited (formerly known as Prime Cellular Private Limited) ('the Company') (i) (a)

The Company did not have any fixed assets during the year and hence clauses (i) (a) to (c) of the Companies (Auditor's Report) Order, 2003 (as amended) are not applicable to the Company.

(ii)

The Company had no trading goods, raw materials or consumables during the year. Accordingly, clause (ii) of the Companies (Auditor's Report) Order, 2003 (as amended) is not applicable to the Company.

(iii)

(a) As informed, the Company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956 and hence clauses (iii) (a) to (d) of the Companies (Auditor's Report) Order, 2003 (as amended) are not applicable. (e) The Company has taken a loan from Bharat Hotels Limited, the Holding Company and a Company covered in the register maintained under section 301 of the Companies Act, 1956. The maximum amount outstanding during the year was Rs. 240,037,501 and the year-end outstanding balance of loan taken from such company was Rs. 240,037,501. (f)

In our opinion and according to the information and explanations given to us, the rate of interest and other terms and conditions for such loan are not prima facie prejudicial to the interest of the Company.

(g) In respect of loans taken, repayment of the principal amount is as stipulated and payment of interest has been regular. (iv)

The Company has not made any purchases of inventory and of fixed assets during the year. Also, the Company has not sold any goods and services during the year. Accordingly, clause (iv) of the Companies (Auditor's Report) Order, 2003 (as amended) is not applicable to the Company.

(v)

(a) According to the information and explanations provided by the management, we are of the opinion that the particulars of contracts or arrangements referred to in section 301 of the Companies Act, 1956 that need to be entered into the register maintained under section 301 have been so entered. (b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements exceeding the value of Rupees five lakhs have been entered into during the financial year at prices which are reasonable having regard to the prevailing market prices at the relevant time.

(vi)

The Company has not accepted any deposits from the public.

(vii)

In our opinion, the Company has an internal audit system commensurate with the size and nature of its business.

(viii)

To the best of our knowledge and as explained, the Central Government has not prescribed maintenance of cost records under clause (d) of sub-section (1) of section 209 of the Companies Act, 1956 for the products of the Company.

(ix)

(a) Undisputed statutory dues of income-tax provident fund, investor education and protection fund, employees' state insurance, sales-tax, wealth-tax, service tax, customs duty, excise duty and cess have generally been regularly deposited with the appropriate authorities. (b) According to the information and explanations given to us, no undisputed amounts payable in respect of income tax, provident fund, investor education and protection fund, employees' state insurance, sales-tax, wealth-tax, service tax, customs duty, excise duty cess and other undisputed statutory 150

dues were outstanding at the year end, for a period of more than six months from the date they became payable. (c) According to the information and explanations given to us, there are no dues of income tax, sales-tax, wealth-tax, service tax, customs duty and excise duty and cess which have not been deposited on account of any dispute. (x)

The Company's accumulated losses at the end of the financial year are less than fifty percent of its net worth. In the current year Company has not incurred cash loss. In the immediately preceding financial year the Company had incurred cash loss.

(xi)

The Company has no outstanding dues in respect of financial institutions, banks or debenture holders.

(xii)

According to the information and explanations given to us and based on the documents and records produced 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.

(xiii)

In our opinion, the Company is not a chit fund or a nidhi / mutual benefit fund / society. Therefore, the provisions of clause 4(xiii) of the Companies (Auditor's Report) Order, 2003 (as amended) Order are not applicable to the Company.

(xiv)

In our opinion, the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Companies (Auditor's Report) Order, 2003 (as amended) are not applicable to the Company.

(xv)

According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from bank or financial institutions.

(xvi)

The Company did not have any term loans outstanding during the year.

(xvii)

According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that no funds raised on short-term basis have been used for long-term investment.

(xviii)

The Company has not made any preferential allotment of shares to parties or companies covered in the register maintained under section 301 of the Companies Act, 1956.

(xix)

The Company did not have any outstanding debentures during the year.

(xx)

The Company has not raised any money through a public issue during the year.

(xxi)

Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and as per the information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the course of our audit. For S.R. BATLIBOI & ASSOCIATES

Chartered Accountants per Raj Agrawal Partner Membership No.: 82028 Place: Gurgaon Date: 27th June, 2009

151

PRIME CELLULAR LIMITED (Formerly known as Prime Cellular Private Limited)

Balance Sheet as at March 31 , 2009 Schedules SOURCES OF FUNDS Shareholders' Funds Share capital Share application money pending allotment

As at March 31 , 2009

As at March 31 , 2008

Rs.

Rs.

1

Loan funds Unsecured loans

400,000,000

—

400,000,000 3,000,000

400,000,000

403,000,000

240,037,501

15,144,673

240,037,501 640,037,501

15,144,673 418,144,673

3

400,000,000

400,000,000

4 5 6

409,788 9,562,070 223,459,807

131,169 470,566 7,187,631

233,431,665

7,789,366

2,333,808 546,124

351,730 —

2

TOTAL APPLICATION OF FUNDS Investments Current Assets, Loans and Advances Cash and bank balances Other current assets Loans and advances (A) Less: Current Liabilities and Provisions Current liabilities Provision for taxation

Net Current Assets

7

(B) (A - B)

Profit and Loss Account TOTAL Notes to Accounts

2,879,932

351,730

230,551,733

7,437,636

9,485,768

10,707,037

640,037,501

418,144,673

13

The schedules referred to above and notes to accounts form an integral part of the Balance Sheet. As per our report of even date For S. R. BATLIBOI & ASSOCIATES Chartered Accountants per Raj Agrawal Partner Membership No.: 82028

For and on behalf of the Board of Directors of Prime Cellular Limited Keshav Suri Managing Director

Jyotsna Suri Director

Vineet Maheshwari Company Secretary Place :Gurgaon Date :27th June, 2009

Place: New Delhi Date: 27th June, 2009

152

Profit and Loss Account for the year ended March 31, 2009

Schedules

INCOME Other income

EXPENDITURE Personnel expenses Operating and other expenses Financial expenses

For the year ended March 31, 2009

For the year ended March 31, 2008

Rs.

Rs.

8

9 10 11

TOTAL Profit/(Loss) for the year before tax Tax expense Provision for Tax Total tax expense Prof it/ (Loss) after tax Balance brought forward from previous year

12

Notes to Accounts

13

608,438

12,363,680

608,438

582,500 205,844 9,807,943

447,641 536,222 960,924

10,596,287'

1,944,787

1,767,393

(1,336,349)

546,124 546,124 1,221,269 (10,707,037)

(1,336,349) (9.370,688)

(9,485,768)

(10,707,037)

Deficit carried to Balance Sheet Earnings per share Basic and Diluted [Nominal value of shares Rs. 100 (previous year: Rs. 100)]

12,363,680

0.31

(0.37)

The schedules referred to above and the notes to accounts form an integral part of the Profit and Loss Account. As per our report of even date For S. R. BATLIBOI & ASSOCIATES Chartered Accountants per Raj Agrawal Partner Membership No.: 82028

For and on behalf of the Board of Directors of Prime Cellular Limited Keshav Suri Managing Director

Jyotsna Suri Director

Vineet Maheshwari Company Secretary Place :Gurgaon Date :27th June, 2009

Place: New Delhi Date: 27th June, 2009

153

PDME CELLULAR LIMITED (Formerly known as Prime Cellular Private Limited)

Cash Flow Statement for the year ended March 31, 2009 For the year ended March 31,2009 Rs. Cash flow from/(used in) operating activities Net profit/(loss) before taxation Adjustments for: Interest income Interest expense Operating loss before working capital changes Movements in working capital: Increase / (decrease) in current liabilities Cash generated from/(used in) operations Direct taxes paid (net of refunds) Net cash from/(used in) operating activities

For the year ended March 31,2008 Rs.

1,767,393

(1,336,349)

(12,363,680) 9,807,574 (788,713)

(608,438) 959,970 (984,817)

1,982,079 1,193,366 (2,801,610) (1,608,244)

(8,217,901) (9,202,718)

(213,470,566) 3,272,176 (210,198,390)

(5,919,937) 137,872 (5,782,065)

(3,000,000) 215,085,253 212,085,253

3,000,000 11,647,268 14,647,268

278,619 131,169 409,788

(337,515) 606,556 269,041

March 31, 2009 3,795

March 31,2008 3,795

405,993 409,788

127,374 131,169

(9,202,718)

B. Cash flow from/(used in) investing activities Loans to Joint venture Company Interest received Net cash from/(used in) investing activities

C. Cash flow from financing activities Proceeds/(Refund) from share issue (including share application money) Proceeds from loans Net cash from financing activities Net increase/ (decrease) in cash and cash equivalents (A+B+C) Cash and cash equivalents at the beginning of the year Cash and cash equivalents at the end of the year Components of cash and cash equivalents as at Cash on hand Balances with scheduled banks: On current accounts

The cash flow statement has been prepared under the indirect method as set out in the Accounting Standard 3 "Cash Flow Statement" issued by the Institute of Chartered Accountants of India. As per our report of even date For S. R. BATLIBOI & ASSOCIATES Chartered Accountants per Raj Agrawal Partner Membership No.: 82028 Place :Gurgaon Date : 27th June, 2009

For and on behalf of the Board of Directors of Prime Cellular Limited Keshav Suri Managing Director

Jyotsna Suri Director

Vineet Maheshwari Company Secretary Place: New Delhi Date: 27th June, 2009

154

Schedules to the Accounts

As at March 31, 2009 Rs

As at March 31,2008 Rs

Authorised 4,000,000 equity shares (previous year: 4,000,000) equity shares of Rs.1 OO/- each

400,000,000

400,000,000

Issued and Subscribed 4,000,000 (previous year: 4,000,000) equity shares of Rs. 100/- each fully paid up

400,000,000

400,000,000

400,000,000

400,000,000

Schedule 1 : Share capital

Of the above: 3,984,000 (previous year: 3,984,000) equity shares are held by Bharat Hotels Limited, the Holding Company.

Schedule 2 : Unsecured Loans From Holding Company

240,037,501

15,144,673

240,037,501

15,144,673

400,000,000

400,000,000

400,000,000

400,000,000

3,795

3,795

405,993

127,374

409,788

131,169

Amount repayable within one year Rs. Nil (Previous year Rs. Nil)

Schedule 3 : Investments (Refer Note no.6 in Schedule 13) Long Term Investments (At cost) Trade (Unquoted) 40,000,000 (previous year: 40,000,000) equity share of Rs. 10 each fully paid-up in Kujjal Builders Private Limited

Schedule 4 : Cash and Bank Balances Cash on hand Balances with scheduled banks: On current accounts

155

PRIME CELLULAR LIMITED (Formerly known as Prime Cellular Private Limited)

As at March 31,2009 Rs.

As at March 31,2008 Rs.

9,562,070

470,566

9,562,070

470,566

220,520,325 2,939,482

7,049,759 137,872

223,459,807

7,187,631

98,915 2,234,893

134,201 217,529

2,333,808

351,730

For the year ended March 31,2009 Rs.

For the year ended March 31,2008 Rs.

12,363,680 12,363,680

608,438 608,438

582,500

447,641

582,500

447,641

Schedule 5 : Other current assets Interest accrued but not due on loan to Joint Venture Company

Schedule 6 : Loans and Advances Unsecured, considered good Loan to Joint venture company TDS recoverable

Schedule 7 : Current Liabilities Sundry creditors (Refer note no. 7 in Schedule 13) - total outstanding dues to Micro and Small Enterprises - total outstanding dues of creditors other than Micro and Small Enterprises Other liabilities

Schedule 8 : Other income Interest Others (Tax deducted at source Rs. 2,801,610, (previous year Rs. 137,872))

Schedule 9 : Personnel Expenses Salaries, wages and bonus

156

For the year ended March 31,2009 Rs.

For the year ended March 31,2008 Rs.

5,600 1,500 11,544 76,900

396,662

110,300

112,360 2,300

205,844

536,222

9,807,574

369

959,970 954

9,807,943

960,924

1,221,269

(1,336,349)

4,000,000 0.31

3,622,295 (0.37)

Schedule 10 : Operating and Other Expenses Rates and taxes Communication Costs Printing and stationery Legal and professional fees Auditor's remuneration - Audit fee Miscellaneous expenses

9,500 15,400

Schedule 11 : Financial Expenses Interest on loans - others Bank charges

Schedule 12 : Earnings per share (EPS) Net profit/(loss) for calculation of basic and diluted earnings per share Weighted average number of equity shares in calculating basic and diluted EPS Basic and diluted earnings per share

157

PRIME CELLULAR LIMITED (Formerly known as Prime Cellular Private Limited)

Schedule 13: Notes to Accounts 1.

Nature of Operations The Company has entered into a Joint Venture with Eila Builders and Developers Private Limited, a wholly owned subsidiary of DLF Limited, and established a Joint Venture Company named Kujjal Builders Private Limited, for the purpose of developing, constructing and operating a hotel and convention centre at Chandigarh.

2.

Statement of Significant Accounting Policies a)

Basis of preparation

The financial statements have been prepared to comply in all material respects with the Notified Accounting Standards by Companies Accounting Standards Rules, 2006 and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared under the historical cost convention on an accrual basis. The accounting policies have been consistently applied by the Company and, are consistent with those used in the previous year. b)

Use of estimates

The preparation of financial statements are in conformity with generally accepted accounting principles requires that management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the results of operations during the reporting year end. Although these estimates are based upon management's best knowledge of current events and actions, actual results could differ from these estimates. c)

Investments

Investments that are readily realizable and intended to be held for not more than a year are classified as current investments. All other investments are classified as long-term investments. Current investments are carried at lower of cost and fair value determined on an individual investment basis. Long-term investments are carried at cost. However, provision for diminution in value is made to recognize a decline other than temporary in the value of the investments. d)

Revenue recognition

Interest Revenue is recognized on a time proportion basis taking into account the amount outstanding and the rate applicable. e)

Foreign currency translation: (i)

Initial Recognition: Foreign currency transactions are recorded in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of the transaction. (7/7 Conversion: Foreign currency monetary items are reported using the closing rate. Non-monetary items which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction; and non-monetary items which are carried at fair value or other similar valuation denominated in a foreign currency, are reported using the exchange rates that existed when the values were determined. 158

(Hi) Exchange Differences: Exchange differences arising on the settlement of monetary items or on reporting monetary items at rates different from those at which they were initially recorded during the year or reported in previous financial statements, are recognized as income or as expenses in the year in which they arise. f)

Income taxes

Tax expense comprises of current, deferred and fringe benefit tax. Current income tax and fringe benefit tax is measured at the amount expected to be paid to the tax authorities in accordance with the Income-tax Act, 1961. Deferred income taxes reflect the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years. Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date. Deferred tax assets are recognized only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized. In situations where the Company has unabsorbed depreciation or carry forward tax losses, all deferred tax assets are recognized only if there is virtual certainty supported by convincing evidence that they can be realized against future taxable profits. At each Balance Sheet date, the Company re-assesses unrecognized deferred tax assets. It recognizes deferred tax assets to the extent that it has become reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available against which such deferred tax assets can be realized. The carrying amount of deferred tax assets are reviewed at each balance sheet date. The Company writesdown the carrying amount of a deferred tax asset to the extent that it is no longer reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available against which deferred tax asset can be realized. Any such write-down is reversed to the extent that it becomes reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available. g)

Earnings Per Share

Basic earnings per share are calculated by dividing the net profit or loss for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the period. The weighted average number of equity shares outstanding during the period are adjusted for events of bonus issue; bonus element in a rights issue to existing shareholders; share split; and reverse share split (consolidation of shares), if any. For the purpose of calculating diluted earnings per share, the net profit or loss for the year attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares, if any. h)

Provision, Contingent liabilities and Contingent Assets:

As required by Accounting Standard 29 - 'Provisions, Contingent Liabilities and Contingent Assets" (AS 29), issued by the ICAI, provision is recognized when the Company has a present obligation as a result of a past event and it is probable that an outflow of resources will be required to settle the obligation and when a reliable estimate of the amount of the obligation can be made. Provisions are not discounted to its present value and are determined based on best estimates required to settle the obligation at the balance sheet date. Contingent liabilities are recognized only when there is a possible obligation arising from past events 159

PRIME CELLULAR LIMITED (Formerly known as Prime Cellular Private Limited)

due to occurrence or non 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 of resources or where a reliable estimate of the obligation cannot be made. The obligations are reviewed at each balance sheet and adjusted to reflect the current best estimates. Contingent assets are not recognized in the financial statements. i)

Cash and cash equivalents

Cash and cash equivalents in the balance sheet comprise cash at bank and in hand and short-term investments with a maturity of three months or less. 3.

Segment Information The Company has only one reportable business segment, which is operating hotels (through Joint Venture Company) and it operates in a single business segment based on the nature of the services, the risks and returns, the organization structure and the internal financial reporting systems. Accordingly, the figures appearing in these financial statements relate to the Company's single business segment. The Company is yet to commence operations and as such, there is nothing to report on geographical segment results.

4.

Income tax and deferred tax Consequent to the adoption of the provisions of Accounting Standard 22 'Accounting for taxes on income', the Company would have a net deferred tax asset, primarily comprising of accumulated tax losses. However, as the management is not virtually certain of subsequent realization of the asset, no deferred tax asset has been computed or recognized in these financial statements.

5.

Related Party Disclosures a)

Names of related parties and their relationship: i.)

Holding Company. Bharat Hotels Limited

ii.) Joint Venture Company: Kujjal Builders Private Limited iii.) Key Management Personnel: - Mr. Keshav Suri - Managing Director

- Ms. Jyotsna Suri - Director iv.) Enterprises owned or significantly influenced by key management personnel: - Prima Buildwell Private Limited b)

Loan taken from the Holding Company is on mutually agreed commercial terms.

c)

Transactions with above parties in the ordinary course of business are as follows:

160

(Amounts in Rs.)

Nature of Transaction

Holding Company

Current year

Joint Venture Company

Enterprises owned or significantly influenced by key management personnel

Previous year

Current year

Previous year

Current year

Previous year

Issue of share capital Bharat Hotels Limited

—

384,000,000

—

—

—

—

Total

—

384,000,000

—

—

—

—

Bharat Hotels Limited

—

—

Prima Buildwell Private Limited

—

—

-

-

(3,000,000)

3,000,000

Total

-

-

-

-

(3,000,000)

3,000,000

Share application money received/ (Refund)

Loans received Bharat Hotels Limited

217,307,650

11,864,798

—

-

—

-

Total

217,307,650

11,864,798

-

-

-

-

Loans granted Kujjal Builders Private Limited

—

—

213,470,566

5,919,937

-

-

Total

—

—

213,470,566

5,919,937

-

-

Kujjal Builders Private Limited

—

—

12,363,680

608,438

—

—

Total

-

-

12,363,680

608,438

—

—

Interest income

Interest expense Bharat Hotels Limited

9,807,574

959,970

—

—

—

—

Total

9,807,574

959,970

-

-

-

-

Balance outstanding as at the year end Accounts receivable Kujjal Builders Private Limited

—

—

220,520,325

7,049,759

-

-

Total

-

-

220,520,325

7,049,759

-

-

—

—

Accounts payable Bharat Hotels Limited

240,037,501

15,144,673

—

—

Total

240,037,501

15,144,673

—

—

6.

—

—

Interest in Joint Venture Name of jointly controlled entity: Kujjal Builders Private Limited, incorporated in India. Description of interest: The Company holds 40,000,000 (previous year: 40,000,000) equity shares of Rs. 10/ - each out of a total paid up capital of 80,000,000 (previous year: 80,000,000) equity shares of Kujjal Builders Private Limited. Proportion of ownership interest: 50% share in the equity share capital 161

PRIME CELLULAR LIMITED (Formerly known as PrimeCellular Private Limited)

Proportionate interest (50%) of the Company in the jointly controlled entity: (Amounts in Rs.) 31-Mar-09

31-Mar-08

Assets Long term assets Current assets

598,409,949 1,818,503

413,674,425 319,759

Total

600,228,451

413,994,184

Liabilities Long term liabilities

156,524,206

7,049,759

46,938,707

10,140,545

203,462,913

17,190,304

Income

20,949

6,963

Expenses (including tax expense)

74,030

31,433

Particulars

Current liabilities and provisions Total

Note: The above information has been provided on the basis of audited accounts of Kujjal Builders Private Limited for the year ended March 31,2009. 7.

Details of dues to Micro, Small and Medium Enterprises as per MSMED Act, 2006 to the extent of confirmation received As at March 31,2009

Details of dues to Micro, Small and Medium Enterprises as per MSMED Act,2006

As at March 31,2008

The principal amount and the interest due thereon (to be shown separately) remaining unpaid to any supplier as at the end of each accounting year

Nil

Nil

The amount of interest paid by the buyer in terms of section 16, of the Micro Small and Medium Enterprise Development Act, 2006 along with the amounts of the payment made to the supplier beyond the appointed day during each accounting year

Nil

Nil

The amount of interest due and payable for the period of delay in making payment (which have been paid but beyond the appointed day during the year) but without adding the interest specified under Micro Small and Medium Enterprise Development Act, 2006.

Nil

Nil

The amount of interest accrued and remaining unpaid at the end of each accounting year; and

Nil

Nil

The amount of further interest remaining due and payable even in the succeeding years, until such date when the interest dues as above are actually paid to the small enterprise for the purpose of disallowance as a deductible expenditure under section 23 of the Micro Small and Medium Enterprise Development Act, 2006

Nil

Nil

162

8.

Additional information pursuant to the provisions of paragraphs 3,4C and 4D of Part II of Schedule VI to the Companies Act, 1956 have not been given as these are not applicable to the Company for the year.

9.

Previous Year Comparatives Previous year figures have been regrouped wherever necessary to conform to this year's classification.

As per our report of even date For S. R. BATLIBOI & ASSOCIATES Chartered Accountants per Raj Agrawal Partner Membership No.: 82028

For and on behalf of the Board of Directors of Prime Cellular Limited Keshav Suri Managing Director

Jyotsna Suri Director

Vineet Maheshwari Company Secretary Place :Gurgaon Date: 27th June, 2009

Place: New Delhi Date: 27th June, 2009

163

PBIME CELLULAR LIMITED (Formerly known as Pnme Cellular Private Limited)

Information pursuant to Part IV of Schedule VI to the Companies Act, 1956 Balance Sheet abstract and Company's general business profile : I

II

III

IV

V

Registration Details Registration No. State Code Balance Sheet Date

U74899DL1995PLC066703 55

31st March, 2009

Capital raised during the year (Amount in Rs. Thousands) Public Issue Rights Issue Bonus Issue Private Placement Position of mobilisation and deployment of funds (Amount in Total Liabilities Total Assets Sources of Funds Paid-up Capital Reserve & Surplus Share Application Money Secured Loans Unsecured Loans Application of Funds Net Fixed Assets Investments Net Current Assets Miscellaneous Expenditure Accumulated Losses

NIL NIL NIL NIL

Rs. Thousands) 642,917.43 642,917.43 400,000.00

240,037.50

400,000.00 230,551.73 9,485.77

Performance of the Company (Amount in Rs. Thousands) Turnover Total Expenditure Profit/(Loss) before Tax Profit/(Loss) after Tax Earnings per share (Rs.) Dividend (in%)

12,363.68 10,596.29 1,767.39 1,221.27

0.31

Generic Names of Principal Products/ Services of the Company as per monetary terms Item Code No. (ITC Code) Product Description

N.A. N.A.

For and on behalf of the Board of Directors of Prime Cellular Limited

Keshav Suri Managing Director Place :New Delhi Date: 27th June, 2009

Jyotsna Suri Director

Vineet Maheshwari Company Secretary

164

DIRECTORS' REPORT TO THE MEMBERS

Your Directors have pleasure in presenting 3rd Annual Report together with the Audited Accounts of the company for the year ended as on 31 * March 2009. FINANCIAL RESULTS

During the year under consideration your company did not commence any operation activity. The Annual Accounts for the year ended 31st March 2009 have shown a net profit of Rs.52.90 lacs (Previous Year- Net Loss- Rs.4.99 lacs) and after considering earlier loss amounting of Rs.5.27 lacs a surplus amount of Rs.47.64 lacs (Previous Year -Deficit amount of Rs.5.27 lacs) has been carried over to the Balance Sheet. DIVIDEND

In view of the financial position of the Company, your Directors do not recommend any dividend for the period ended 31st March, 2009. JOINT VENTURE COMPANY

The Company along with Premium Holdings Limited, a Company incorporated under the laws of the Isle of Man, British Isles, U.K., has entered into a Joint Venture with Lost City Developments L.L.C., Dubai, U.A.E., and established a Joint Venture Company called Cavern Hotel and Resort FZCO, incorporated in Dubai, U.A.E., for the purpose of design, development, construction, marketing and management of a five star deluxe hotel at Lost City, L.L.C., Dubai. In this company your company holds 16.67 % Equity shares. 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 had been followed along with proper explanation relating to material departures;

(ii) the Directors had selected such accounting policies and applied consistently and made judgments and estimates 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 loss of the company for that period; (iii) the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the CompaniesAct, 1956 for safeguarding the assets of the company and for preventing fraud and other irregularities; (iv) the Directors had prepared the Annual Accounts on a going concern basis. DIRECTORS As per the provisions of the Companies Act, 1956 read with Articles of Association of the Company, Ms. Jyotsna Suri, retire by rotation and beig eligible offers herself for re-appointment at this Annual General Meeting.

165

PDIMA BUUDWELL PDIVATE LIMITED AUDITORS M/s. S.R. Batliboi & Company, Chartered Accountants, Gurgaon, retire at the ensuing Annual General Meeting and, being eligible, offer themselves for re-appointment. The company has received a certificate from them pursuant to Section 224(1 B) of the Companies Act, 1956 confirming their eligibility for re-appointment. AUDITORS' OBSERVATIONS The observation of the Auditors have been suitably explained in the notes on Accounts and do not call for any further comments. FIXED DEPOSITS Your Company has not accepted/invited any deposits from the Public for the year under review within the meaning of Section 58A of the Companies Act, 1956 and the rules made there under. INFORMATION U/S. 217(1 )(e) OF THE COMPANIES ACT, 1956 READ WITH THE COMPANIES (DISCLOSURE OF PARTICULARS IN THE REPORT OF BOARD OF DIRECTORS) RULES, 1988. Conservation of Energy, Technology Absorption, Foreign Exchange earnings and Outgo: a)

Conservation of Energy, Technology Absorption: Not Applicable

b)

Foreign Exchange earnings and outgo: During the period under review there was no earning and outgo on account of foreign exchange.

PARTICULARS OF EMPLOYEES During the period under review or part thereof, there was no employee covered under Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 as amended from time to time. COMPLIANCE CERTIFICATE The Company has obtained the Compliance Certificate from Practicing Company Secretary to the effect that the Company has complied with all the provisions of the Companies Act, 1956. A copy of the said Certificate is attached to this Report. ACKNOWLEDGEMENT The Directors express their gratitude to Joint Venture partners, members and Bankers of the company for their continuous support. for and on behalf of the Board

(JYOTSNA SURI) CHAIRPERSON Place: New Delhi Dated: 27th June, 2009

166

SECRETARIAL COMPLIANCE CERTIFICATE COMPANY REGN. NO. NOMINAL CAPITAL

: :

55-1497 Rs. 500 LACS

To,

The Members PRIMA BUILDWELL PRIVATE LIMITED We have examined the registers, records, books and papers of Prima Buildwell Private Limited (the Company) as required to be maintained under the Companies Act, 1956, (the Act) and the rules made thereunder and also the provisions contained in the Memorandum and Articles of Association of the Company for the financial year ended on 31st March, 2009 (the said period). In our opinion and to the best of our information and according to the examinations carried out by us explanations furnished to us by the company, its officers and agents, we certify that in respect of the aforesaid financial year: 1.

The Company has kept and maintained all registers as stated in Annexure 'A to this certificate, as per the provisions and the rules made thereunder and all entries therein have duly recorded.

2.

The Company has duly filed the forms and returns as stated in Annexure 'B' to this certificate, with the Registrar of Companies, Regional Director, Central Government, Company Law Board or other authorities within the time prescribed under the Act and the rules made there under.

3.

The Company being a private limited company has minimum prescribed paid-up capital and its maximum number of members during the said financial year were 2 excluding its present and past employees and the company during the year under scrutiny: (i) has not invited public to subscribe for its shares or debentures; and (ii) has not invited or accepted any deposits from persons other than its members, directors or their relatives.

4.

The Board of Directors duly met 4 times on 09.04.2008,08.08.2008,26.12.2008 and 28.03.2009 in respect of which meetings proper notices were given and the proceedings were properly recorded and signed in the Minutes Book maintained for the purposes.

5.

The Company has not closed its Register of Members during the said period.

6.

The Annual General Meeting for the financial year ended on 31st March, 2008 was held on 02.09.2008 after giving due notice to the members of the company and the resolutions passed thereat were duly recorded in Minutes Book maintained for the purpose.

7.

One Extra-Ordinary General Meeting was held during the said period after giving due notice to the members of the company and the resolutions passed threat were duly recorded in Minutes Book maintained for the purpose.

8.

The Company has not advanced any loans to its Directors or persons or firms or companies referred in the section 295 of the Act during the said period.

9.

The Company has duly complied with the provisions of Section 297 of the Act in respect of contracts specified in that Section.

10.

The Company has made necessary entries in the register maintained under Section 301 of the Act.

11.

As there was no instance falling within the purview of section 314 of the Act, the company has not obtained any approvals from the Board of Directors, members or Central Government, as the case may be.

12.

The Company has not issued any duplicate share certificate during the said period.

13.

The Company has: (i) delivered all the certificates on lodgment thereof for transfer/transmission in accordance with the provisions of the Act.

167

PDIMA BTODWELL PRIVATE LIMITED (ii) (iii) (iv)

not deposited any amount in a Separate Bank Account as no dividend was declared during the year, not posted warrants to any member of the company as no dividend was declared, duly complied with the requirement of section 217 of the Act.

14.

The Board of Directors of the company is duly constituted. There was no appointment of additional directors, alternate directors and directors to fill casual vacancy during the financial year.

15.

The Company has not appointed any Managing Director/Whole-time Director / Manager during the said period.

16.

The Company has not appointed any sole-selling agents during the said period.

17.

The Company was not required to obtain any approvals of the Central Government, Company Law Board, Regional Director, Registrar or such other authorities as may be prescribed under the various provisions of the Act.

18.

The Directors have disclosed their interest in other firms/companies to the Board of Directors pursuant to the provisions of the Act and the rules made thereunder.

19.

The Company has not issued any equity share or any other securities during the said period.

20.

The Company has not bought back any shares during the financial year.

21.

There was no redemption of preference shares or debentures during the financial year.

22.

There was no transaction necessitating the company to keep in abeyance the rights to dividend, rights shares and bonus shares pending registration of transfer of shares.

23.

The Company has not invited/accepted any deposit including any unsecured loan falling within the purview of Section 58A during the said period.

24.

The amount borrowed by the Company from holding company during the financial year 31.03.2009 are within borrowing limits.

25.

The loans or advances or guarantees or securities to other bodies corporate are as per the provisions of the Act.

26.

The Company has not altered the provisions of the memorandum with respect of situation of the company's registered office from one state to another during the period under scrutiny.

27.

The Company has not altered the provisions of the memorandum with respect to the objects of the company during the period under scrutiny.

28.

The Company has not altered the provisions of the memorandum with respect to the name of the company during the year under scrutiny.

29.

The Company has altered the provisions of the memorandum with respect to share capital of the company during the year under scrutiny and complied with the provisions of the Act.

30.

The Company has not altered its Articles of Association during the financial year.

31.

There was no prosecution initiated against or show cause notices received by the company during the financial year, for offences under the Act.

32.

The Company has not received any money as security from its employees during the said period.

33.

The Company has not created any trust of PF for its employees under Section 418 of the Act. For R S M & Co Company Secretaries

Place: New Delhi Dated: 27th June, 2009

(RAVI SHARMA) Partner(C.P.No. 3666) 168

Annexure 'A' to Secretarial Compliance Certificate REGISTERS AS MAINTAINED BY THE COMPANY SI.No

Name of Register

Under Section

1.

Register of Members

150

2.

Register of Share Transfer

108

3.

Register of Particulars of contracts, companies and firms in which directors are interested

301

4.

Register of Directors, Managing Director, Manager and Secretary

303

5.

Register of Directors' Shareholdings

307

6.

Books of Accounts

209

7.

Minutes of Meetings of Board of Directors

193

8.

Minutes of General Meetings

193

Annexure 'B' to Secretarial Compliance Certificate

FORMS AND RETURNS AS FILED BY THE COMPANY WITH THE REGISTRAR OF COMPANIES DURING THE FINANCIAL YEAR ENDING ON 31ST MARCH, 2009 Forms/ Returns

Under Section

For

Form 23

192

Registration of resolution filed on 02.08.2008

Form 23

192

Registration of resolution filed on 27.09.2008

Form 23AC & Form 23ACA (Annual Report)

220

The financial year 2007-08 filed on 27.09.2008.

Form 20 B (Annual Return)

159

The AGM held on 02.09.2008 filed on 29.10.2008.

Form 66 (Compliance Certificate )

383A

the financial year 2007-08 filed on 27.09.2008.

(There was no other Forms and Returns was filed by the company with the Regional Director, Central Government or other Authorities during the Financial Year ending on 31 * March, 2009 under the Act.).

For R S M & Co Company Secretaries Place: New Delhi Dated: 27th June, 2009

(RAVI SHARMA) Partner(C.P.No. 3666)

169

PDIMA BUILDWELL PBIVATE LIMITED S.R. BATLIBOI & ASSOCIATES Chartered Accountants Auditors' Report To The Members of Prima Buildwell Private Limited

1.

We have audited the attached Balance Sheet of Prima Buildwell Private Limited ('the Company') as at March 31,2009 and also the Profit and Loss Account and the Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

2.

We 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.

3.

As required by the Companies (Auditor's Report) Order, 2003 (as amended) issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4.

Further to our comments in the Annexure referred to above, we report that: i.

We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit;

ii.

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;

iii. The Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account; iv. In our opinion, the Balance Sheet, the Profit and Loss account and the Cash Flow Statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956. v.

On the basis of the written representations received from the directors, as on March 31,2009, and taken on record by the Board of Directors, we report that none of the directors is disqualified as on March 31, 2009 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

vi. In our opinion and to the best of our information and according to the explanations given to us, the said accounts 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;

170

a) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2009; b) in the case of the Profit and Loss Account, profit for the year ended on that date; and c) in the case of Cash Flow Statement, of the cash flows for the year ended on that date.

For S.R. BATLIBOI & ASSOCIATES Chartered Accountants

per Raj Agrawal Partner Membership No.: 82028 Place: Gurgaon Date: 27th June, 2009

171

PDIMA BUUDWELL PRIVATE LIMITED

Annexure referred to in paragraph 3 of our report of even date Re: Prima Buildwell Private Limited ('the Company') (i)

(a)

(ii)

(iii)

The Company had no trading goods, raw materials or consumables during the year. Accordingly, clause (ii) of the Companies (Auditor's Report) Order, 2003 (as amended) is not applicable to the Company. (a)

The Company has granted a loan to Cavern Hotel and Resort FZCO covered in the register maintained under section 301 of the Companies Act, 1956. The maximum amount outstanding during the year was Rs. 78,144,000 and the year- end balance of loans granted to such party was Rs. 78,144,000.

(b)

In our opinion and according to the information and explanations given to us, the rate of interest and other terms and conditions for such loans are not prima facie prejudicial to the interest of the Company.

(c)

In respect of loans granted, repayment of the principal amount is as stipulated The loan given is interest free.

(e)

The Company has taken a loan from Bharat Hotels Limited, the Holding Company and a Company covered in the register maintained under section 301 of the Companies Act, 1956. The maximum amount outstanding during the year was Rs. 40,342,663 and the year-end outstanding balance of loan taken from such company was Rs. 40,342,663.

(f)

In our opinion and according to the information and explanations given to us, the rate of interest and other terms and conditions for such loan are not prima facie prejudicial to the interest of the Company.

(g)

In respect of loan taken, repayment of the principal amount is as stipulated and payment of interest has been regular.

(iv)

(v)

The Company did not have any fixed assets during the year and hence clauses (i) (a) to (c) of the Companies (Auditor's Report) Order, 2003 (as amended) are not applicable to the Company.

The Company has not made any purchases of inventory and of fixed assets during the year. Also, the Company has not sold any goods and services during the year. Accordingly, clause (iv) of the Companies (Auditor's Report) Order, 2003 (as amended) is not applicable to the Company. (a)

According to the information and explanations provided by the management, we are of the opinion that the particulars of contracts or arrangements referred to in section 301 of the Companies Act 1956, that need to be entered into the register maintained under section 301 have been so entered.

(b)

In our opinion and according to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements exceeding the value of Rupees five lakhs have been entered into during the financial year at prices which are reasonable having regard to the prevailing market prices at the relevant time.

(vi)

The Company has not accepted any deposits from the public.

(vii)

In our opinion, the Company has an internal audit system commensurate with the size and nature of 172

its business. (viii)

(ix)

To the best of our knowledge and as explained, the Central Government has not prescribed maintenance of cost records under clause (d) of sub-section (1) of section 209 of the Companies Act, 1956 for the products of the Company. (a)

Undisputed statutory dues of income-tax, provident fund, investor education and protection fund, employees' state insurance, sales-tax, wealth-tax, service tax, customs duty, excise duty and cess have generally been regularly deposited with the appropriate authorities.

(b)

According to the information and explanations given to us, no undisputed amounts payable in respect of income tax, provident fund, investor education and protection fund, employees' state insurance, sales-tax, wealth-tax, service tax, customs duty, excise duty and cess other undisputed statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable.

(c)

According to the information and explanations given to us, there are no dues of income tax sales-tax, wealth-tax, service tax, customs duty, excise duty and cess which have not been deposited on account of any dispute.

(x)

The Company has been registered for a period of less than five years and hence we are not required to comment on whether or not the accumulated losses at the end of the financial year is fifty per cent or more of its net worth and whether it has incurred cash losses in such financial year and in the immediately preceding financial year.

(xi)

The Company has no outstanding dues in respect of financial institutions, banks or debenture holders.

(xii)

According to the information and explanations given to us and based on the documents and records produced 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.

(xiii)

In our opinion, the Company is not a chit fund or a nidhi / mutual benefit fund / society. Therefore, the provisions of clause 4(xiii) of the Companies (Auditor's Report) Order, 2003 (as amended) Order are not applicable to the Company.

(xiv)

In our opinion, the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Companies (Auditor's Report) Order, 2003 (as amended) are not applicable to the Company.

(xv)

According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from bank or financial institutions.

(xvi)

The Company did not have any term loans outstanding during the year.

(xvii)

According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that no funds raised on short-term basis have been used for long-term investment.

(xviii)

The Company has not made any preferential allotment of shares to parties or Companies covered in

173

PDIMA BTODTOi PRIVATE LIMITED the register maintained under section 301 of the Companies Act, 1956. (xix)

The Company did not have any outstanding debentures during the year,

(xx)

The Company has not raised any money through a public issue during the year.

(xxi)

Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and as per the information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the course of our audit. For S.R. BATLIBOI & ASSOCIATES Chartered Accountants per Raj Agrawal Partner Membership No.: 82028 Place: Gurgaon Date: 27th June, 2009

174

Balance Sheet as at March 31, 2009 Schedules

SOURCES OF FUNDS Shareholders' Funds Share capital Profit and Loss Account

1

Loan funds Unsecured loans

2

As at March 31, 2009 Rs.

30,100,000 4,763,629

30,100,000

34,863,629

30,100,000

40,342,663

3,574,109

40,342,663

3,574,109

Deferred tax liabilities (Effect of income credited to profit and loss account in the current year but to be offered for taxation or tax purposes in following years) TOTAL APPLICATION OF FUNDS Investments Current Assets, Loans and Advances Cash and bank balances Other current assets Loans and advances

4 5 6

(A)

Less: Current Liabilities and Provisions Current liabilities Provision for taxation (B)

Net Current Assets Profit and Loss Account

(A - B)

TOTAL

As at March 31,2008 Rs.

3,901,206 79,107,498

33,674,109

1,084,766

1,084,766

4,116

79,848,901

28,962,907 373,680 3,000,000

79,853,017

32,336,587

798,868 1,031,417 1,830,285 78,022,732

189,392 84,676 274,068 32,062,519 526,824

79,107,498

33,674,109

12

Notes to Accounts

The schedules referred to above and notes to accounts form an integral part of the Balance Sheet. As per our report of even date For S. R. BATLIBOI & ASSOCIATES Chartered Accountants

per Raj Agrawal Partner Membership No.: 82028 Place: Gurgaon Date: 27thJune,2009

For and on behalf of the Board of Directors of Prima Buildwell Private Limited

Jyotsna Suri Director Place: New Delhi Date: 27th June, 2009 175

Divya Suri Singh Director

PDIMA BUILDWELi PRIVATE LIMITED Profit and Loss Account for the year ended March 31 , 2009

Schedules INCOME Other income

For the year ended March 31, 2009

For the year ended March 31 , 2008

Rs.

Rs.

12,672,261

373,680

12,672,261

373,680

9

200,328

582,453

10

3,280,274

206,329

TOTAL

3,480,602

788,782

Prof it/(Loss) for the year before tax

9,191,659

(415,102)

—

84,676

Deferred tax charge

3,901,206

—

Total tax expense

3,901,206

84,676

Net profitless) after tax

5,290,453

(499,778)

Balance brought forward from previous period

(526,824)

(27,046)

Surplus/(Deficit) carried to Balance Sheet

4,763,629

(526,824)

1.76

(0.21)

8

TOTAL EXPENDITURE Operating and other expenses Financial expenses

Current tax

Earnings per share Basic and Diluted [Nominal value of shares Rs. 10 (previous year: Rs. 10)]

11

Notes to Accounts

12

The schedules referred to above and the notes to accounts form an integral part of the Profit and Loss Account. As per our report of even date For S. R. BATLIBOI & ASSOCIATES Chartered Accountants

per Raj Agrawal Partner Membership No.: 82028 Place: Gurgaon Date : 27th June, 2009

For and on behalf of the Board of Directors of Prima Buildwell Private Limited

Jyotsna Suri Director Place: New Delhi Date: 27th June, 2009

176

Divya Suri Singh Director

Cash Flow Statement as at March 31, 2009 For the year ended March 31, 2009 Rs.

For the year ended March 31,2008 Rs.

9,191,659

(415,102)

(1,194,750) 2,904,751 (11,477,511)

(373,680) 206,002

(575,851)

(582,780)

(758,160) 373,680 609,476 (350,855)

162,346 (420,434)

A. Cash flow from/fused in) operating activities Net Profit/(loss) before taxation Adjustments for: Interest income Interest expense Unrealized foreign exchange loss/(gain) Operating profit/(loss) before working capital changes Movements in working capital: (lncrease)/decrease in loans & advances (lncrease)/decrease in other current assets lncrease/(decrease) in current liabilities Cash flow from/(used in) operating activities B. Cash flow from/(used in) investing activities Investment in Joint venture company Share application money pending allotment Interest received Loan to Joint venture company Net cash from/(used in) investing activities

3,000,000 1,194,750 (66,666,489)

(62,471,739)

C. Cash flow from/(used in) financing activities Proceeds from issue of share capital Proceeds from loans Repayment of loans Net cash from/(used in) financing activities

(4,084,766)

33,863,803

30,000,000 3,468,107 (100,000) 33,368,107

(28,958,791) 28,962,907 4,116

28,862,907 100,000 28,962,907

March 31, 2009

March 31,2008

4,116

1,462,907 27,500,000 28,962,907

33,863,803

Net increase/(decrease) in cash and cash equivalents (A+B+C) Cash and cash equivalents at the beginning of the year Cash and cash equivalents at the end of the year Components of cash and cash equivalents as at Cash on hand Balances with scheduled banks: On current account On deposit account

(1,084,766) (3,000,000)

4,116 Note 1. The cash flow statement has been prepared under the indirect method as set out in the Accounting Standard 3 "Cash Flow Statement" issued by the Institute of Chartered Accountants of India. As per our report of even date For S. R. BATLIBOI & ASSOCIATES Chartered Accountants per Raj Agrawal Partner Membership No.: 82028 Place: Gurgaon Date : 27th June, 2009

For and on behalf of the Board of Directors of Prima Buildwell Private Limited Jyotsna Suri Director Place: New Delhi Date: 27th June, 2009

177

Divya Suri Singh Director

PDIMA BUILDWELL PRIVATE LIMITED Schedules to the Accounts As at March 31,2009 Rs.

As at March 31,2008 Rs.

Authorised 5,000,000 (previous year: 5,000,000) equity shares of Rs.10/- each

50,000,000

50,000,000

Issued and Subscribed 3,010,000 (previous year :3,010,000) equity shares of Rs. 107- each fully paid up

30,100,000

30,100,000

30,100,000

30,100,000

Schedule 1 : Share capital

Of the above: 3,009,999 (previous year: 3,009,999) equity shares are held by Bharat Hotels Limited, the Holding Company.

Schedule 2 : Unsecured Loans From Holding Company

40,342,663

3,574,109

40,342,663

3,574,109

1,084,766

1,084,766

1,084,766

1,084,766

4,116

1,462,907 27,500,000

4,116

28,962,907

Amount repayble within one year Rs. Nil (Previous year Rs. Nil)

Schedule 3 : Investments (Refer note 7 under schedule 12) Long Term Investments (At cost) Trade (Unquoted) 1 (previous year: 1) equity share of United Arab Emirates Dirham (AED) 100,000 fully paid-up in Cavern Hotel and Resort FZCO, Dubai, U.A.E.

Schedule 4 : Cash and Bank Balances Balances with scheduled bank: On current account On deposit account

178

As at March 31,2009 Rs.

As at March 31,2008 Rs.

Schedule 5 : Other Current Assets Interest accrued but not due on bank deposits

373,680 373,680

Schedule 6 : Loans and Advances Unsecured, considered good Advances recoverable in cash or kind or for value to be received Loan to Joint Venture Company Share application money pending allotment * MAT credit receivable TDS recoverable

423,656 78,144,000 3,000,000 946,741 334,504 79,848,901

* Given to a Company under the same management Prime Cellular Limited (Maximum amount outstanding during the year Rs.3,000,000 (previous year Rs. 3,000,000))

3,000,000

3,000,000

Schedule 7 : Current Liabilities Sundry creditors (Refer note 8 under schedule 12) - total outstanding dues to Micro and Small Enterprises - total outstanding dues to creditors other than Micro and Small Enterprises Other liabilities

— 128,155 670,713

142,712 46,680

798,868

189,392

For the year ended March 31, 2009 Rs.

For the year ended March 31, 2008 Rs.

1,194,750 11,477,511

373,680

12,672,261

373,680

Schedule 8 : Other Income Interest Bank deposits (Tax deducted at source Rs.178,523 previous year Rs. 155,981) Foreign exchange fluctuations (net)

179

PDIMA DUUDWEU PRIVATE LIMITED For the year ended For the period ended March 31, 2009 March 31, 2008 Rs. Rs. Schedule 9 : Operating and Other Expenses Rates and taxes Legal and professional fees Auditor's remuneration - Audit fee Printing and stationery

27,972 42,972

464,172 5,921

110,300 19,084

112,360

200,328

582,453

2,904,751 375,523

206,002 327

3,280,274

206,329

5,290,453

(499,778)

3,010,000 1.76

2,370,656 (0.21)

Schedule 10 : Financial Expenses Interest on loans - others Bank charges

Schedule 11 : Earnings per share (EPS) Net profitless) for calculation of basic and diluted earnings per share Weighted average number of equity shares in calculating basic and diluted EPS Basic and diluted earnings per share

180

Schedule 12: Notes to the Accounts 1.

Nature of Operations The Company along with Premium Holdings Limited, a Company incorporated under the laws of the Isle of Man, British Isles, U.K., has entered into a Joint Venture with Lost City Developments L.L.C., Dubai, U.A.E., and established a Joint Venture Company called Cavern Hotel and Resort FZCO, incorporated in Dubai, U.A.E., for the purpose of design, development, construction, marketing and management of a five star deluxe hotel at Lost City, L.L.C., Dubai.

2.

Statement of Significant Accounting Policies a)

Basis of preparation

The financial statements have been prepared to comply in all material respects with the Notified Accounting Standards by Companies Accounting Standards Rules, 2006 and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared under the historical cost convention on an accrual basis. The accounting policies have been consistently applied by the Company and are consistent with those used in the previous year. b)

Use of estimates

The preparation of financial statements are in conformity with generally accepted accounting principles requires that management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the results of operations during the reporting year end. Although these estimates are based upon management's best knowledge of current events and actions, actual results could differ from these estimates. c)

Investments

Investments that are readily realizable and intended to be held for not more than a year are classified as current investments. All other investments are classified as long-term investments. Current investments are carried at lower of cost and fair value determined on an individual investment basis. Long-term investments are carried at cost. However, provision for diminution in value is made to recognize a decline other than temporary in the value of the investments. d)

Revenue recognition

Interest

Revenue is recognized on a time proportion basis taking into account the amount outstanding and the rate applicable. e)

Foreign currency translation (i) Initial Recognition Foreign currency transactions are recorded in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of the transaction. (ii) Conversion Foreign currency monetary items are reported using the closing rate. Non-monetary items which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange 181

PDIMA BUftDWELL PRIVATE LIMITED rate at the date of the transaction; and non-monetary items which are carried at fair value or other similar valuation denominated in a foreign currency, are reported using the exchange rates that existed when the values were determined. (Hi) Exchange Differences Exchange differences arising on the settlement of monetary items or on reporting monetary items at rates different from those at which they were initially recorded during the year or reported in previous financial statements are recognized as income or as expenses in the year in which they arise. (iv) Translation of Non-integral foreign operation In translating the financial statements of a non-integral foreign operation for incorporation in financial statements, the assets and liabilities, both monetary and non-monetary, of the non-integral foreign operation are translated at the closing rate; income and expense items of the non-integral foreign operation are translated at exchange rates at the dates of the transactions. f)

Income taxes

Tax expense comprises of current, deferred and fringe benefit tax. Current income tax and fringe benefit tax is measured at the amount expected to be paid to the tax authorities in accordance with the Income-tax Act, 1961. Deferred income taxes reflect the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years. Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date. Deferred tax assets are recognized only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized. In situations where the Company has unabsorbed depreciation or carry forward tax losses, all deferred tax assets are recognized only if there is virtual certainty supported by convincing evidence that they can be realized against future taxable profits. At each Balance Sheet date, the Company re-assesses unrecognized deferred tax assets. It recognizes deferred tax assets to the extent that it has become reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available against which such deferred tax assets can be realized. The carrying amount of deferred tax assets are reviewed at each balance sheet date. The Company writesdown the carrying amount of a deferred tax asset to the extent that it is no longer reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available against which deferred tax asset can be realized. Any such write-down is reversed to the extent that it becomes reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available. MAT credit is recognized as an asset only when and to the extent there is convincing evidence that the Company will pay normal income tax during the specified year. In the year in which the Minimum Alternative Tax (MAT) credit becomes eligible to be recognized as an asset in accordance with the recommendations contained in Guidance Note issued by the Institute of Chartered Accountants of India, the said asset is created by way of a credit to the profit and loss account and shown as MAT Credit Entitlement. The Company reviews the same at each balance sheet date and writes down the carrying amount of MAT Credit Entitlement to the extent there is no longer convincing evidence to the effect that Company will pay normal Income Tax during the specified year.

182

g)

Earnings Per Share

Basic earnings per share are calculated by dividing the net profit or loss for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the period. The weighted average number of equity shares outstanding during the period are adjusted for events of bonus issue; bonus element in a rights issue to existing shareholders; share split; and reverse share split (consolidation of shares), if any. For the purpose of calculating diluted earnings per share, the net profit or loss for the year attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares, if any. h)

Provision, Contingent liabilities and Contingent Assets:

As required by Accounting Standard 29 - 'Provisions, Contingent Liabilities and Contingent Assets" (AS 29), issued by the ICAI, provision is recognized when the Company has a present obligation as a result of a past event and it is probable that an outflow of resources will be required to settle the obligation and when a reliable estimate of the amount of the obligation can be made. Provisions are not discounted to its present value and are determined based on best estimates required to settle the obligation at the balance sheet date. Contingent liabilities are recognized only when there is a possible obligation arising from past events due to occurrence or non 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 of resources or where a reliable estimate of the obligation cannot be made. The obligations are reviewed at each balance sheet and adjusted to reflect the current best estimates. Contingent assets are not recognized in the financial statements. i)

Cash and cash equivalents

Cash and cash equivalents in the balance sheet comprise cash at bank and in hand and short-term investments with a maturity of three months or less. 3.

Segment Information The Company has only one reportable business segment, which is operating and constructing hotel (through Joint Venture Company) and it operates in a single business segment based on the nature of the services, the risks and returns, the organization structure and the internal financial reporting systems. Accordingly, the figures appearing in these financial statements relate to the Company's single business segment. The Company is yet to commence operations and as such, there is nothing to report on geographical segment results.

4.

Bharat Hotels Limited, the Holding Company, holds 99.99% of the entire paid up share capital. The Company is a Public Company within the meaning of Section 3 (iv) (c) of the Companies Act, 1956.

5.

Related Party Disclosures a)

Names of related parties and their relationship: i.)

Holding Company: Bharat Hotels Limited

ii.) Joint Venture Company: Cavern Hotel and Resort FZCO, Dubai, U.A.E.

183

PDIMA BUHDWELL PRIVATE LIMITED iii.) Key Management Personnel: - Ms. Jyotsna Suri - Director - Ms. Divya Suri - Director iv.) b)

Enterprises owned or significantly influenced by key management personnel: Prime Cellular Limited Loan taken from the Holding Company is on mutually agreed commercial terms.

c) Transactions with above parties in the ordinary course of business are as follows: (Amounts in Rs.) Nature of Transaction

Holding Company

Joint Venture Company

Enterprises owned or significantly influenced by key management personnel

Current year

Previous year

Current year

Previous year

Current year

Previous year

Issue of share capital Bharat Hotels Limited

—

30,000,000

—

—

—

—

Total

—

30,000,000

—

—

—

—

Loans received Bharat Hotels Limited

34,522,019

3,365,492

—

—

—

—

Total

34,522,019

3,365,492

—

—

—

—

—

—

—

1,084,766

—

—

Total Share application money given/(refunded) Prime Cellular Limited

—

—

—

1,084,766

—

—

—

—

-

(3,000,000)

3,000,000

Total

-

-

-

(3,000,000)

3,000,000

Investment in share capital Cavern Hotel and Resort FZCO

Loans Provided Cavern Hotel and Resort FZCO

—

—

78,144,000

-

-

-

Total

—

—

78,144,000

—

—

—

Interest expense Bharat Hotels Limited

2,904,751

206,002

—

—

—

—

Total

2,904,751

206,002

—

—

—

—

Balance outstanding as at the year end Accounts receivable Cavern Hotel and Resort FZCO

—

—

78,144,000

—

—

—

Total

-

-

78,144,000

-

-

-

Accounts payable Bharat Hotels Limited

40,342,663

3,574,109

—

-

—

—

Total

40,342,663

3,574,109

—

—

—

—

184

Interest in Joint Venture Name of jointly controlled entity: Cavern Hotel and Resort FZCO, incorporated in Dubai, U.A.E., on April 22, 2007. Description of interest: The Company holds 1 (previous year: 1) equity share of U.A.E. Dirham 100,000 out of a total paid up capital of 6 (previous year: 6) equity shares of Cavern Hotel and Resort FZCO. Proportion of ownership interest: 16.67% (previous year 16.67 %) share in the equity share capital Proportionate interest (16.67%) of the Company in the jointly controlled entity for the year ended March 31, 2009 (previous year 16.67%) March 31 ,2009 Particulars

March 31 ,2008

March 31 ,2009

Amount in AED

March 31 ,2008

Amount in Rs.

Assets Long term assets Current assets

5,780,457

1 ,055,831

82,128,732

11,473,924

2,072,906

931,796

29,451,853

10,126,009

Total

7,853,363

1,987,627

111,580,585

21,599,933

Liabilities Long term liabilities

5,888,783

1,887,606

83,667,823

20,512,996

Current liabilities and provisions

1,864,980

Total

7,753,763

1,887,606

110,165,458

20,512,996

419

—

5,957

—

Expenses

26,497,635

Note: The above disclosure has been made solely on the basis of un-audited accounts of Cavern Hotel and Resort FZCO, certified by the management, for the year ended March 31,2009. 7.

Details of dues to Micro, Small and Medium Enterprises as per MSMED Act, 2006 to the extent of confirmation received

As at March 31, 2009

As at March 31, 2008

The principal amount and the interest due thereon (to be shown separately) remaining unpaid to any supplier as at the end of each accounting year

Nil

Nil

The amount of interest paid by the buyer in terms of section 16, of the Micro Small and Medium Enterprise Development Act, 2006 along with the amounts of the payment made to the supplier beyond the appointed day during each accounting year

Nil

Nil

The amount of interest due and payable for the period of delay in making payment (which have been paid but beyond the appointed day during the year) but without adding the interest specified under Micro Small and Medium Enterprise Development Act, 2006.

Nil

Nil

Details of dues to Micro, Small and Medium Enterprises as per MSMED Act,2006

185

PDIMA BUILDWELL PRIVATE LIMITED The amount of interest accrued and remaining unpaid at the end of each accounting year; and

Nil

Nil

The amount of further interest remaining due and payable even in the succeeding years, until such date when the interest dues as above are actually paid to the small enterprise for the purpose of disallowance as a deductible expenditure under section 23 of the Micro Small and Medium Enterprise Development Act, 2006

Nil

Nil

8.

The Company is in the process of identifying a suitable person for appointment of Company Secretary as prescribed under Section 383A of the Companies Act, 1956.

9.

Additional information pursuant to the provisions of paragraphs 3,4C and 4D of Part II of Schedule VI to the Companies Act, 1956 has not been given as these are not applicable to the Company during the year.

10.

Previous Year Comparatives Previous period figures have been regrouped wherever necessary to conform to this year's classification.

As per our report of even date For S. R. BATLIBOI & ASSOCIATES Chartered Accountants per Raj Agrawal Partner Membership No.: 82028 Place: Gurgaon Date : 27th June, 2009

For and on behalf of the Board of Directors of Prima Buildwell Private Limited Jyotsna Suri Director Place: New Delhi Date: 27th June, 2009

186

Divya Suri Singh Director

Information pursuant to Part IV of Schedule VI to the Companies Act, 1956 Balance Sheet abstract and Company's general business profile : I

II

III

IV

V

Registration Details Registration No. State Code Balance Sheet Date

U74899DL2006PTC149732 55 31st March, 2009

Capital raised during the year (Amount in Rs. Thousands) NIL Public Issue NIL Rights Issue NIL Bonus Issue NIL Private Placement Position of mobilisation and deployment of funds (Amount in Rs. Thousands) 80,937.78 Total Liabilities 80,937.78 Total Assets Sources of Funds Paid-up Capital 30,100.00 Reserve& Surplus 40,342.66 Unsecured Loans 3,901.21 Deferred Tax Liabilities Application of Funds Net Fixed Assets 1,084.77 Investments 78,022.73 Net Current Assets Performance of Company (Amount in Rs. Thousands) Turnover 12,672.26 1,944.79 Total Expenditure Profit/(Loss) before Tax 9,191.66 Profit/(Loss) after Tax 5,290.45 1.76 Earnings per share (Rs.) Dividend (in%) Generic names of three principal Products/ Services of the Company (As per monetary terms) N.A. Item Code No. (ITC Code) N.A. Product Description

For and on behalf of the Board of Directors of Prima Buildwell Private Limited Jyotsna Suri Director Place: New Delhi Date : 27th June, 2009

187

Divya Suri Singh Director

BHARAT HOTELS (THAILAND) COMPANY LIMITED 240/4 AYODHAYA TOWER, 11TH FLOOR, RATCHADAPISEK18 ROAD, HUAYKHWANG BANGKOK 10320

CHATCHAWAT AUDITING & TAX CO., LTD.

Independent Auditor's Report To the Shareholders and the Board of Directors of Bhart Hotels (Thailand) Company Limited. We have audited the accompanying balance sheet of Bharat Hotels (Thailand) Company Limited as at March 31, 2009 and the related statement of income and the statement of change in shareholders' equity for the accounting period from May 12,2008 to March 31,2009. These financial statements are the responsibility of the Company's management as to their correctness and completeness of the presentation. Our responsibility is to express an opinion on these financial statement based on our audit. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of materials 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. In our opinion the aforementioned financial statement present fairly, in all material respects, the financial position of Bharat Hotels (Thailand) Company Limited as at March 31, 2009 and the results of its operations for the accounting period from May 12, 2008 to March 31, 2009 in accordance with generally accepted accounting principles.

(Mr. Chatchawat Setthee) C.P.A. Registration No. 5535 Dated-June 18,2009

188

BALANCE SHEET AS AT MARCH 31,2009

As at As at March 31,2009 March 31, 2009 ASSETS (BAHT)

(INR)

3,359,951.53 191,753.64 356,489.35 3,908,194T52

4,976,424.21 284,006.32 527,996.38

13,073,540.00 260,000,000.00

19,363,220.09 385,086,000.00

273,073,540.00

404,449,220.09

276,981,734.52

410,237,647.00

668,773.29 120,950.00 380,627.21

990,520.12 179,139.05 563,746.96

1,170,350.50

1,733,406.13

417,767.12

618,754.88

417,767.12

618,754.88"

CURRENT ASSETS

Cash and cash equivalents Short - term investment Other current assets Total Current Assets

5,788,426.90

NON-CURRENT ASSETS

Construction in progress (Note 4) Deposit for land Total Non-Current Assets TOTAL ASSETS LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES

Advance received from shareholders Accrued expenses Other current liabilities Total Current Liabilities NON-CURRENT LIABILITIES

Other long-term loans (Note 5) Total Non-Current Liabilities Total Liabilities

1,588,117.62

2,352,161.01

600,000,000.00

888,660,000.00

60,000,000.00 216,000,000.00

88,866,000.00 319,917,600.00

276,000,000.00

408,783,600.00

(606,383.10)

(898,114.01)

275,393,616.90

407,885,485.99

276,981,734.52

410,237,647.00

SHAREHOLDERS' EQUITY

Capital Stock Authorized Common share-Baht 100 par value, 6,000,000 shares Issued and paid-up Common share- Baht 100 par value, 600,000 shares Common share-Baht 40 par value, 5,400,000 shares Total Deficits Total Shareholders' Equity TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

Note: 1. Figures in Indian Rupees (un- audited), wherever applicable, have been given only as additional information 2. See accompanying Notes to Financial Statements. For and on behalf of the Board of Directors of Bharat Hotels (Thailand) Co., Ltd. Keshav Suri Managing Director 189

Jyotsna Suri Divya Singh Directors

BHADAT HOTELS (THAILAND) COMPANY LIMITED STATEMENT OF INCOME FOR THE ACCOUNTING PERIOD FROM MAY 12,2008 TO MARCH 31,2009

For the Period ended

For the Period ended 31 March, 2009

31 March, 2009

(BAHT)

(INR)

214,839.99

318,199.51

214,839.99

318,199.51

821,223.09

1,216,313.52

821,223.09

1,216,313.52

(606,383.10)

(898,114.01)

REVENUES

Other income Total Revenues EXPENSES

Operating and administrative expenses Total Expenses Net loss Loss per share

(blsT

Note: 1. Figures in Indian Rupees (un- audited), wherever applicable, have been given only as additional information 2. See accompanying Notes to Financial Statements For and on behalf of the Board of Directors of Bharat Hotels (Thailand) Co., Ltd. Keshav Suri Managing Director

190

Jyotsna Suri Divya Singh Directors

OPERATION AND ADMINISTRATIVE EXPENSES FOR THE ACCOUNTING PERIOD FROM MAY 12,2008 TO MARCH 31,2009

OPERATION AND ADMINISTRATIVE EXPENSES

Travelling expenses Office supply Postage Professional fee Audit fee Official fee Other service fee Bank charges Penalty and surcharges TOTAL OPERATION AND ADMINISTRATIVE EXPENSES

For the Period ended

For the Period ended

31 March, 2009

31 March, 2009

(BAHT)

(INR)

253,490.00

375,444.04

500.00

740.55

1,817.00

2,691.16

231,351.00

342,653.97

30,000.00

44,433.00

276,210.00

409,094.63

12,969.00

19,208.39

13,741.09

20,351.93

1,145.00

1,695.86

821,223.09

1,216,313.52

Note: 1 Figures in Indian Rupees (un-audited), wherever applicable, have been given only as additional information 2. See accompanying Notes to Financial Statements

191

BHARAT HOTELS (THAILAND) COMPANY LIMITED NOTES TO FINANCIAL STATEMENTS AS AT MARCH 31,2009 1. GENERAL INFORMATION Bharat Hotels (Thailand) Company Limited was registered under the Civil and Commercial Code as a Private Limited Company on May 12,2008 with the main objective to perform hotel business. The Company registered office is located at No. 240/6, 11th Floor Ayodhaya Tower, Soi Ratchadapisek 18, Ratchadapisek Road, Huaykwang, Huaykwang, Bangkok. The Company has not yet started its operation in this accounting period. Most activities were related to the preparation for commencing a business.

2. BASIS FOR FINANCIAL STATEMENTS PREPARATION The financial statements have been prepared in accordance with accounting standards enunciated under the Accounting Profession Act B.E. 2547, the Notification of the Federation of Accounting Profession No. 21/2550, Subject: The Exemption of some Accounting Standards to be conformed by non-public companies dated on July 20,2007 annoucing that 8 Thai Accounting Standards are exempted to be conformed by non-public companies which has been approved by the Board of Supervision of Accounting Profession on April 25,2007. As permitted by the relevant regulation the Company has elected not to adop the following accounting standards at this time: The Accounting Standard No.24: "Segment Reporting" The Accounting Standard No.25 : "Cash flow statement" The Accounting Standard No.36 : "Impairment of Assets" The Accounting Standard No.44 : "Consolidated and Separate Financial Statements" The Accounting Standard No.45 : "Investments in Associates" The Accounting Standard No.46 : "Interests in Joint Ventures" The Accounting Standard No.47 : "Related party disclosures" The Accounting Standard No.48 : "Financial Instruments: Disclosure and Presentation" These financial statements have been prepared under the historical cost convention.

3. SIGNIFICANT ACCOUNTING POLICIES 3.1 Revenue and Expenditure recognition Revenues and expenditures are recorded on an accrual basis. 3.2 Investment The short-term investment represents the fair value which is defined as the amount at which an asset could be exchange in a current transaction between knowledgeable willing parties n arm's length transaction. In the event of disposal of such investments, the company uses the FIFO method to record the acquisition costs and other associated costs to the investment while recognizing its revenues or expenses.

192

The unrealized gain or loss arised from the difference between the aquisition costs and the fair value at the year end is recorded as a separate item under the shareholders' equity and will eventually be realized on the income statement when the stated investment are dispossed. 3.3 Depreciation and other deferred charges The Company depreciates its building and equipment by the straight - line method over the periods ranging from 5 to 20 years, excluded those assets that are under construction or set up. 3.4 Foreign currency transactions Transactions in foreign currencies throughout the year are recorded in Baht at rates prevailing at the dates of transactions. Assets and liabilities nominated in foreign currencies at the balance sheet date are converted to Baht at the rates prevailing at that date. Gains or losses from the translation are credited or charged to current operations. 3.5 Use of accounting estimates The preparation of financial statements in conformity with generally accepted accounting principles required the management to make several estimations and assumptions. Such estimates, affected the amounts of revenues, expenses, assets and liabilities, the disclosure of assets and contingent liabilities. Consequent actual results may differ from these estimates. 3.6 Loss per share The loss per share is determined by dividing the net loss of the period with the number of shares outstanding at the end of the accounting period. 4.

CONSTRUCTION IN PROGRESS (BAHT)

(INR)

Movement in year Balance as at May 12,2008

Increase

Decrease

Balance as at March 31, 2009

Balance as at March 31, 2009

At cost Construction in progress

— 13,073,540.00

— 13,073,540.00

19,363,220.09

Total

— 13,073,540.00

— 13,073,540.00

19,363,220.09

5. OTHER LONG-TERM LOANS

This account are loans from certain affiliated companies for the Company's expenses with no interest charged. There are no specific repayment term and no collateral for the mention loan.

193

BHARAT HOTELS (THAILAND) COMPANY LIMITED 6. APPROVAL OF FINANCIAL STATEMENTS These financial statements were approved by the Board of Directors.

STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY FOR THE ACCOUNTING PERIOD FROM MAY 12, 2008 TO MARCH 31,2009 (BAHT) (INR) Paid-up Capital

Retained Earnings

Stock

(Deficits)

Total

Total

195,000,000.00

—

195,000,000.00

288,814,500.00

Add: Additional paid-up capital during 2008 to 2009

81,000,000.00

—

81,000,000.00

119,969,100.00

NET LOSS FOR THE PERIOD FROM 2008 to 2009

—

(606,383.10)

(606,383.10)

(898,114.01)

Balance as at March 31, 2009

276,000,000.00

(606,383.10)

275,393,616.90

407,885,485.99

Balance as at May 12, 2008

Note: 1. Figures in Indian Rupees (un- audited), wherever applicable, have been given only as additional information 2. See accompanying Notes to Financial Statements For and on behalf of the Board of Directors of Bharat Hotels (Thailand) Co., Ltd. Keshav Suri Managing Director

194

Jyotsna Suri Divya Singh Directors

PROXY FORM BHARAT HOTELS LIMITED Regd. Office : Barakhamba Lane, New Delhi-110 001 of

I/We

being a member of Bharat Hotels Limited, hereby appoint of

or failing him of

as my/our proxy to attend 28th Annual General Meeting of the Company to be held on 26th August, 2009 at 3.00 P.M. and at any adjournment thereof. AS WITNESS my/our hand(s) this day of No. of Shares Folio No

2009 (in words)

DPID:

Revenue Stamp

Client ID

(Signature) Note: 1. This proxy must be deposited at the Registered Office of the Company at Barakhamba Lane, Connaught Place, New Delhi-110 001 not less than forty eight hours before the commencement of the meeting. 2. Kindly note that no gift/gift coupon shall be distributed at the venue of Annual General Meeting.

ATTENDANCE SLIP BHARAT HOTELS LIMITED Regd. Office: Barakhamba Lane, New Delhi - 110 001 1. Full Name of Shareholder/Proxy 2. Registered Folio No 3. No. of Shares

DPID:

Client ID.

(in words)

4. If proxy, full name of Shareholder/s I hereby record my presence at the 28th Annual General Meeting of the Company at FICCI Golden Jubilee Auditorium, Tansen Marg, New Delhi-110001 on Wednesday, the 26th August, 2009 at 3:00 P.M.

(Signature of Shareholder/Proxy) IMPORTANT • Please bring this attendance slip in original to attend the meeting. • No duplicate attendance slip shall be issued at the meeting venue. • This attendance slip may please be handed over at the entrance of the Meeting Hall. • Kindly note that no gift/gift coupon shall be distributed at the venue of Annual General Meeting.

T:

\

Limitless hospitality THE

LaLlT The Laitt Suri Hospitality Group

(A Bharat Hotels Enterprise)

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THE

L3LIT

THE

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te BHADAT HOTELS LIMITED (The Lalit"'is a brand owned by Bharat Hotels Limited) Barakhamba Avenue. Connaught Place, New Delhi 110001 India T: 91 11 4444 7777 F: 91 11 4444 1234 E: [email protected] W: www.theialit.com India Toll Free: 1 800 11 77 1 1 o? Gall +91 1 1 4 4 4 4 7 4 7 4