KAMAT HOTELS (INDIA) LIMITED · 2020. 5. 1. · KAMAT HOTELS (INDIA) LIMITED Regd. Off. : 70-C, Nehru Road, Vile Parle (East), Mumbai - 400 099. Tel.: 2616 4000, Fax.: 2616 4201.

If undelivered please return to

KAMAT HOTELS (INDIA) LIMITEDRegd. Off. : 70-C, Nehru Road, Vile Parle (East), Mumbai - 400 099. Tel.: 2616 4000, Fax.: 2616 4201.

Prin

ted

by

Orie

nt P

ress

Ltd

. 4

02

8 5

88

8Book Post

Annual Report2007-2008

94

Fina

ncia

l Hig

hlig

hts:

Rs.

in L

akhs

Part

icul

ars

1997

-199

819

99-2

000

2000

-20

01-

2002

-20

03-

2004

-20

05-

2006

-20

07-

(18

Mon

ths)

(15

mon

ths)

2001

2002

2003

2004

2005

2006

2007

2008

Inco

me

from

ope

ratio

ns23

96.9

154

71.8

655

56.6

845

00.0

244

54.1

048

40.5

553

53.8

481

46.2

511

192.

9814

761.

18

Oth

er I

ncom

e27

2.80

92.0

438

.09

44.5

813

2.41

56.1

049

.37

87.8

389

.81

505.

93

Turn

over

2669

.71

5563

.90

5594

.77

4544

.60

4586

.51

4896

.65

5403

.21

8234

.08

1128

2.79

1526

7.11

Tota

l Exp

endi

ture

2325

.14

5171

.41

5068

.79

4524

.72

4534

.61

4774

.69

4581

.46

6513

.15

8274

.65

1072

5.91

Pro

fit B

efor

e Ta

x34

4.57

392.

4952

5.98

19.8

851

.90

121.

9682

1.75

1720

.93

3008

.14

4369

.59

Taxa

tion

1.69

70.5

845

.37

19.0

641

.24

50.2

441

1.34

163.

0294

9.94

1628

.93

Pro

fit A

fter T

ax34

2.88

321.

9148

0.61

0.82

10.6

671

.72

410.

4115

57.9

120

58.2

027

40.6

6

Equ

ity S

hare

Cap

ital

1133

.14

1133

.14

1133

.14

1133

.14

1133

.14

1133

.14

1133

.14

1378

.59

1378

.59

1378

.59

Res

erve

s an

d S

urpl

us62

83.6

364

45.0

468

17.5

164

10.6

362

61.1

663

18.7

466

04.1

810

875.

7612

547.

9514

817.

79

Net

-wor

th74

55.7

775

06.8

878

02.5

673

57.8

973

07.6

474

07.7

277

20.9

712

248.

3313

926.

5416

196.

38

Ear

ning

per

Sha

re (

Rs)

2.36

2.03

4.35

0.02

0.07

0.65

3.79

12.3

815

.60

21.6

3

Boo

k Va

lue

per

Sha

re (

Rs)

66.9

268

.79

72.6

368

.49

68.0

268

.95

71.8

792

.81

105.

5212

2.72

Ret

urn

on N

et W

orth

3.53

3.60

5.99

0.03

0.10

0.94

5.27

12.7

214

.78

16.8

7(p

erce

ntag

e)


1

KAMAT HOTELS (INDIA) LIMITEDBOARD OF DIRECTORS

Mr. Vithal Venketesh Kamat Padmashree Thangam Elizabeth PhilipExecutive Chairman & Managing Director Director

Mr. K. P. Kannampilly Mr. S. S. ThakurDirector (Whole-time Technical Director upto 31-10-2007) Director

Mr. Ramesh N. Shanbhag Mr. Pravin N. GhataliaWhole-Time Director Director

Mr. Vishal V. Kamat Mr. Ved Prakash KhuranaExecutive Director Director

Mr. Suhail Kannampilly Mrs. Rajyalakshmi RaoDirector Director

Mr. Vikram V. Kamat Mr. T. M. Mohan NambiarDirector Director

AUDITORS

M/s. J. G. Verma & Co.Chartered Accountants

M/s. Anay Gogte & Co.Chartered Accountants

COMPANY SECRETARYMr. Mahesh Kandoi

BANKERSCanara BankAndhra BankEXIM BankAxis BankOriental Bank of CommerceKotak Mahindra Bank

REGISTERED OFFICE70-C, Nehru Road,Near Santacruz Airport,Vile Parle (E), Mumbai - 400 099Tel No. 2616 4000 Fax No. 2616 4201

REGISTRARS AND SHARE TRANSFER AGENTSIntime Spectrum Registry Ltd.C-13, Pannalal Silk Mills Compound,L. B. S. Marg, Bhandup, Mumbai - 400 078Tel No. 2596 3838 Fax No. 2594 6969

ContentsPage Nos.

Board of Directors 1

Notice 2

Directors’ Report 7

Management Discussion and Analysis 13

Corporate Governance Report 15

Auditors’ Report 25

Balance Sheet 28

Profit and Loss Account 29

Cash Flow Statement 30

Schedules to Accounts 31

Information under Part IV of Sch. VI 56

Consolidated Accounts 57

Statement u/s 212 of the Companies Act. 1956 83


2

NOTICENotice is hereby given that the Twenty-First Annual General Meeting of the members of Kamat Hotels (India) Limited will beheld at “Shubham Hall”, Landmark Bldg., Opposite Vile Parle Railway Station, Junction of Besant Road and V. P. Road, VileParle (West), Mumbai – 400 056 on Saturday the 30th August, 2008 at 3.00 p.m. to transact the following business:ORDINARY BUSINESS:1) To receive, consider and adopt the Audited Profit and Loss Account for the year ended on 31st March, 2008 and the

Balance Sheet as at that date together with the Reports of the Board of Directors and Auditors thereon.2) To declare a dividend on Equity Shares.3) To appoint a Director in place of Padmashree Thangam E. Philip, who retires by rotation and being eligible offers herself

for reappointment.4) To appoint a Director in place of Mr. S. S. Thakur, who retires by rotation and being eligible offers himself for reappoint-

ment.5) To appoint a Director in place of Mr. T. M. Mohan Nambiar, who retires by rotation and being eligible offers himself for

reappointment.6) To appoint a Director in place of Mr. Vikram V. Kamat, who retires by rotation and being eligible offers himself for

reappointment.7) To appoint Auditors and fix their remuneration.SPECIAL BUSINESS:8) To consider and, if thought fit, to pass, with or without modification(s), the following resolution as a Special Resolution:

“RESOLVED THAT pursuant to Section 198, 269,309, 310 read with schedule XIII and all other applicable provisions,if any, of the Companies Act, 1956 (“the Act”) including any statutory modification(s) or re-enactment thereof and inmodification of resolution passed by the shareholders in this regard on 28th July, 2007 and subject to all permissions,sanctions and approvals as may be necessary, approval of the company be and is hereby accorded to the payment ofcommission to Mr. Vithal V. Kamat, Executive Chairman and Managing Director of the company annually up to a ceilingof 1% of the net profit of the Company computed in the manner specified in the Act, for the period commencing from 1stApril, 2008 in such manner and up to such extent as the Board of Directors and/or Remuneration Committee constitutedby the Board of Directors may determine from time to time and that the commission payable to Mr. Vithal V. Kamat,Executive Chairman and Managing Director shall be in addition to the remuneration payable to him pursuant toresolution passed by the shareholders in this regard on 28th July, 2007 and determined by the Board of Directors andor Remuneration Committee from time to time.RESOLVED FURTHER THAT for the purpose of giving effect to this resolution, the Board of Directors and/or RemunerationCommittee of the Board of Directors be and are hereby authorized to do all such acts, deeds, matters and things, as itmay in its absolute discretion deem necessary, proper or desirable and to settle any question, difficulty or doubt thatmay arise in this regard.”

9. To consider and, if thought fit, to pass, with or without modification(s), the following resolution as a Special Resolution:

“RESOLVED THAT pursuant to Section 198, 309 and all other applicable provisions, if any, of the Companies Act, 1956(“the Act”) including any statutory modification(s) or re-enactment thereof and subject to all permissions, sanctionsand approvals as may be necessary, approval of the company be and is hereby accorded to the payment of commissionannually upto 1% of the net profit of the Company to the Director(s) of the company who is/are not in the whole timeemployment of the company in accordance with the provisions of Section 309(4) of the Act computed in the mannerspecified in the Act, for a period of 5 years commencing from the financial year 1st April, 2008, in such manner and upto such extent as the Board of Directors and/or Remuneration Committee constituted by the Board of Directors maydetermine from time to time.RESOLVED FURTHER THAT for the purpose of giving effect to this resolution, the Board of Directors and/or RemunerationCommittee of the Board of Directors be and are hereby authorized to do all such acts, deeds, matters and things, as itmay in its absolute discretion deem necessary, proper or desirable and to settle any question, difficulty or doubt thatmay arise in this regard.”

By order of the Board of DirectorsFOR KAMAT HOTELS (INDIA) LIMITED

(Mahesh Kandoi)Company Secretary

Registered Office:70-C, Nehru Road,Vile Parle (East), Mumbai 400 099.Place : Mumbai.Date : 26th July, 2008


3

NOTES:1. A MEMBER ENTITLED TO ATTEND AND VOTE AT THE MEETING IS ENTITLED TO APPOINT A PROXY TO

ATTEND AND VOTE ON A POLL ONLY INSTEAD OF HIMSELF AND THE PROXY NEED NOT BE AMEMBER OF THE COMPANY.

2. The instrument appointing proxy must be deposited at the Registered Office of the Company not less than48 hours before the commencement of the meeting.

3. An explanatory statement pursuant to Section 173 (2) of the Companies Act, 1956 in relation to the specialbusiness of meeting is annexed as Annexure I hereto.

4. A Member or his Proxy is requested to bring with him the Annual Report as extra copy of the same will notbe supplied at the Meeting as per usual practice.

5. The Shareholders are requested to notify changes, if any, in their address to their depository participants inrespect of their holding in electronic form and to the Registrars and Transfer Agents of the Company,M/s. Intime Spectrum Registry Ltd., C-13, Pannalal Silk Mills Compound, L. B. S. Marg, Bhandup (W),Mumbai – 400 078. Tel No. 25963838 and Fax No. 25946969 in respect of their holding in physical Form.

6. The Register of Members and Share Transfer Books of the Company will remain closed from Tuesday,19th August, 2008 to Saturday, 30th August, 2008 (both days inclusive) for the purpose of Annual Generalmeeting and payment of Dividend.

7. The dividend on equity shares, if any, declared as recommended by the Board of Directors of the Companyfor the financial year ended on 31st March, 2008 will be paid within the prescribed time limit:a) to those Members whose names appear on the Register of Members of the Company at the close of

business on 30th August, 2008 or to their order,b) in respect of shares held in electronic form to those “Deemed Members” whose names appear in the

“Statement of Beneficial Ownership” furnished by the National Securities Depository Ltd. (NSDL) andCentral Depository Services (India) Ltd. (CDSL) at the end of business hours on 18th August, 2008.

8. Members may please note that dividend warrants are payable at par at the designated branches of the bankprinted overleaf of the dividend warrant for an initial period of 3 months only. Thereafter, the dividend warrantson revalidation will be payable only at limited centres/ branches. The members are, therefore, advised toencash dividend warrants within the initial validity period.

9. Members are requested to inform their bank account numbers, name of the Bank and address of the Branchto the Company to enable it to print the same on the dividend warrants to protect them against fraudulentencashment of dividend warrants. Such information should be given to the Company’s Registered Officeimmediately.

10. Consequent upon introduction of Section 205C of the Companies Act, 1956, the dividend remaining unclaimedfor a period of 7 years from the date of transfer to the Unpaid Dividend in respect of the Financial Year endedon 31st March 2001 shall be transferred to the Investor Education and Protection Fund (IEPF) by 3rd December,2008. The Members who have not encashed their dividend warrants so far for the financial year ended on31st March, 2001 or any subsequent financial year are requested to approach the Company or its Registrarand Transfer Agent for revalidation of their dividend warrants. It may be noted that once the unclaimeddividend for the year ended 31st March, 2001 is transferred to the IEPF by 3rd December, 2008, asabove, no claim shall lie against the Company or IEPF in respect thereof.The dividend for the year 1999-2000 which remained unclaimed for a period of 7 years from the date ofdeclaration, has already been transferred to the Investors Education and Protection Fund on 5th December,2007.

11. Appointment /Re-appointment of Directors: Padmashree Thangam E. Philip, Mr. S. S. Thakur,Mr. T. M. Mohan Nambiar and Mr. Vikram V. Kamat retire by rotation and being eligible offer themselves forre-appointment at the ensuing Annual General Meeting. The details pertaining to these Directors as requiredunder Clause 49 (IV) (G) of the Listing Agreements signed by the Company with the Stock Exchanges arefurnished in Annexure II to the Notice.

12. In view of various advantages offered by the depository system, the members are requested to avail thefacility of dematerialisation of the Company’s shares.

13. The members are requested to handover the enclosed attendance slip duly signed as per their specimensignature(s) registered with the Company for admission to the meeting hall.


4

ANNEXURE I TO THE NOTICEEXPLANATORY STATEMENT UNDER SECTION 173 OF THE COMPANIES ACT, 1956.

Item Nos. 8 & 9

The Board of Directors of the Company has, considering the valuable contribution of Mr. Vithal V. Kamat, ExecutiveChairman and Managing Director in the impressive progress and growth of the Company, recommended to pay himcommission annually upto a ceiling of 1% of the net profit of the Company computed in the manner specified in the Act.

Similarly, the non executive Directors of the company contribute in a significant way to the growth of the Company.These directors presently do not draw any remuneration from the company other than sitting fees. The Board, therefore,recognizes the need to suitably remunerate them. In view of the same, it is proposed to pay commission annually upto1% of the net profit of the Company to the non executive Directors in accordance with the provisions of the CompaniesAct, 1956 as may be modified from time to time. Currently, as per the provisions of Section 198, 309 and otherapplicable provisions of the Companies Act, 1956, consent of members is required for payment of commission to theDirector(s) of the company who is/are not in the whole time employment up to a ceiling of 1% (if the company has amanaging or whole time director or manager) or 3% (if the company has no managing or whole time director ormanager) of the net profits of the company computed in the manner specified in the Act or such other limit as may beapproved by the Central Government.

Accordingly, approval of the members is requested to remunerate the Executive Chairman and Managing Director andnon executive Directors every year with commission in the manner described in the respective resolutions in accordancewith the applicable provisions of the said Act and schedule XIII as may be modified from time to time. The saidcommission to non executive directors will be apportioned amongst them in the manner to be determined by the Boardof Directors and/ or Remuneration Committee of the company. The Board of Directors accordingly recommends theresolutions set out at Item Nos. 8 & 9 of the accompanying Notice for the approval of the Members.

Mr. Vithal V. Kamat, Executive Chairman and Managing Director, Mr. Vishal V. Kamat, Executive Director andMr. Vikram V. Kamat, Director, being relatives of Mr. Vithal V. Kamat, and all the non executive Directors of thecompany, may be deemed to be concerned or interested in the resolutions to the extent of commission that may bepayable to them from time to time.

The above terms and conditions may be treated as an abstract under Section 302 of the Companies Act, 1956.

By order of the Board of DirectorsFOR KAMAT HOTELS (INDIA) LIMITED

(Mahesh Kandoi)Company Secretary

Place : Mumbai.Date : 26th July, 2008


5

ANNEXURE II TO THE NOTICEAs required under Clause 49(IV) (G) of the Listing Agreements, brief profile of the Directors retiring by rotationand being eligible offering themselves for reappointment, is as follows:

1. Name : Padmashree Thangam E. Philip

Padmashree Thangam E. Philip is a Fellow Member of Hotel Catering & Institutional Management Association,U.K. and also of Cookery & Food Association, U.K. She is a Member of Royal Society of Health, U.K. Ms.Philip has many publications to her credit and she is the first lady to start Hotel Management School inIndia. She is recipient of the ‘Firestone Award’ from Indian Association of Occupational Health and wasawarded ‘PADMASHREE’ by the Government of India. She was also conferred the Knighthood of the Orderof ‘CORDON BLEU DU SAINT ESPRIT.’ At present, she is Principal Emeritus – Institute of Hotel Management,Catering Technology and Applied Nutrition and is a member of the Board of Governors, Indian Institute ofTourism & Travel Management.

Directorship held in other Companies – 1. Escapade Hotels Ltd. 2. Ras Resort Hotels Ltd.

Committee Membership – Kamat Hotels (India) Ltd. - Audit Committee

- Remuneration Committee

- Shareholders’ Grievance Committee

2. Name : Mr. S. S. Thakur

Mr. S. S. Thakur has held important positions in his long professional career in the field of banking andforeign exchange. He was the Controller of Foreign Exchange, Reserve Bank of India, Senior Adviser ofUnited Nations Development Programme (UNDP) and Chairman of HDFC Bank. After serving the ReserveBank of India in different capacities, Mr. Thakur joined the U. N. International Civil Service as Senior Adviser,UNDP and worked in Zambia as Adviser to the Governor, Bank of Zambia for 6 years (1988-1993). He was,thereafter, appointed as the Chairman of HDFC Bank and served in that capacity for 7 years (1994-2000).Currently, he is the Chairman of Central Depository Services (India) Ltd.

Directorship held in other Companies – 1. CDSL Ventures Ltd. 2. Central Depository Services (India) Ltd.3. DSP Merrill Lynch Trustee Co. Pvt. Ltd. 4. HDFC Securities Ltd. 5. KEC International Ltd.6. Kotak Mahindra Old Mutual Life Insurance Company Ltd. 7. Lafarge India Pvt Ltd. 8. Quantum AdvisorsPvt Ltd. 9. Quantum Information Services Pvt. Ltd. 10. Shrenuj Co. Ltd. 11. Summit Securities Limited(formerly known as KEC Infrastructures Ltd.) 12. Urban Infrastructure Venture Capital Ltd.

Audit Committee Membership in other public limited companies 1. HDFC Securities Ltd. 2. KEC InternationalLtd. 3. Kotak Mahindra Old Mutual Life Insurance Co. Ltd. 4. Shrenuj & Co. Ltd. 5. Central DepositoryServices (India) Ltd.

3. Name : Mr. T. M. Mohan Nambiar

Mr. T. M. Mohan Nambiar is a senior Chartered Accountant. He has held key positions in Finance field. Hehad been associated with ACC for a long period and held the office of Managing Director of ACC. He isDirector on the Board of various reputed companies.

Directorship held in other Companies – 1. Carborandam Universal Ltd. 2. ION Exchange ( India) Ltd. 3. IONExchange Envio-Farms Ltd. 4. Navin Fluorine International Ltd.

Audit Committee Membership in other public limited companies – 1. Carborandam Universal Ltd. 2. IONExchange (India) Ltd. 3. Navine Fluorine International Ltd.


6

4. Name : Mr. Vikram V. Kamat

Mr. Vikram V. Kamat is a science graduate (B.Sc.) and he has completed his Hotel Management coursefrom the Institute of Hotel Management, Catering Technology and Applied Nutrition (IHMCTAN), Mumbai. Hejoined the Company as an additional Director of the Company with effect from 22nd July, 2006. He hasextensive experience in Hotel Industry and has been associated with the Company at the grass root level.He is also Director in other Companies of the Kamat Group.Directorship held in other Companies – 1. Himco Financial Management Pvt Ltd. 2. Indira Investments Pvt.Ltd. 3. Kamat Holdings Pvt. Ltd. 4. Kamat Holiday Resorts (Silvassa) Pvt. Ltd. 5. Kamat Holiday ResortsPvt. Ltd. 6. Kamats Amusements Pvt Ltd. 7. Kamats Club Pvt Ltd. 8. Kamats Development Pvt. Ltd. 9.Kamats Eateries Pvt. Ltd. 10. Kamats Restaurants Pvt. Ltd. 11. Kamats Super Snacks Pvt. Ltd. 12. KamburgerFoods Pvt. Ltd. 13. Kamfotel Resorts Pvt Ltd. 14. Karaoke Amusements Pvt. Ltd. 15. Swastik Amusements& Hotels Pvt. Ltd. 16. Venketesh Hotels Pvt. Ltd. 17. Vishal Amusements Ltd.

Audit Committee Membership in other companies – NIL.


7

DIRECTORS’ REPORTTo the Members,

Your Directors are pleased to present the Twenty-First Annual Report together with the Audited Accounts of theCompany for the year ended 31st March, 2008.

FINANCIAL RESULTS

The figures of financial results for the financial year under review are summarised below.

(Rs. in Lakhs)

Particulars Year ended Year endedMarch 31, 2008 March 31, 2007

Total Income 15,267.11 11,282.79Profit Before Interest, Depreciation & Taxation 7,188.46 5,312.74Less : Interest 1,656.74 1,510.18Less : Depreciation 990.52 794.42Profit Before Extra Ordinary Item and Tax 4,541.20 3,008.14Less : Extra Ordinary Item 171.61 —Profit Before Tax 4,369.59 3,008.14Less : Provision for current tax 998.00 339.33Less : Provision for deferred tax 602.41 1,072.54Less : Provision for fringe benefit Tax 28.00 17.00Less : Provision for wealth tax 0.52 0.17Add : MAT credit entitlement — 479.10Profit after tax 2,740.66 2,058.20Less prior period adjustments 7.61 —Net profit after adjustments 2,733.05 2,058.20Add : Balance Brought Forward 3,060.77 1,598.57Distributable Profits 5,793.82 3,656.77Appropriations:i) Proposed dividend on Equity Shares 395.92 329.93ii) Tax on proposed dividend on (i) above 67.29 56.07iii) Transferred to General Reserve 280.00 210.00Balance carried over to Balance Sheet 5,050.61 3,060.77

YEAR IN RETROSPECT

During the year under review, your Company has registered encouraging performance at all its Units which isreflected in higher turnover and profitability. The Average Room Rate, during the year under review, was recordedat Rs. 10,089 at “The Orchid” as compared to Rs. 8,139 in the previous year and at Rs. 6,432 at “VITS” ascompared to Rs. 4,814 in the previous year.

During the year under review, the average occupancy level of The Orchid, the flagship unit of the Company, wasaround 80% as compared to 88% in the previous year. The Average Occupancy level of the Company’s other unit“VITS” (formerly known as “The Lotus Suites”) was around 73% as compared to 81% in the previous Year. The


8

total turnover of the Company for the year was recorded at Rs. 15,267 lakhs (of which the turnover of Rs. 9,617lakhs pertains to The Orchid, Mumbai, Rs. 4,353 lakhs to VITS, Mumbai and Rs. 1,297 lakhs to other units) asagainst Rs. 11,283 lakhs in the previous year, an increase of around 35% over the last year. The Company hasregistered profit after tax of Rs. 2,741 lakhs as compared to Rs. 2,058 lakhs in the previous year, an increase ofaround 33% over the last year.

Your Directors are pleased to report that the heritage hotel of the company, India’s first museum hotel-“HotelJadhavgadh, Pune” commenced its operations with 37 rooms, restaurants and other facilities on 30th January2008.The Hotel was inaugurated by Hon’ble Union Minister for Agriculture Mr. Sharad Pawar.

DIVIDEND

Your Directors are pleased to recommend payment of a dividend @ 30% (Rs. 3 per share) for the year ended 31st

March, 2008 (Previous year 25% or Rs. 2.50 per share). The dividend tax will be paid by the Company anddividend will be exempt in the hands of the shareholders.

AWARDS

The pride of the Company, The Orchid, Asia’s first and only ISO 14001certified Eco-friendly Five Star Hotel,continues to maintain the track record of winning prestigious awards ever since its inception. During the yearunder review, The Orchid has won the following awards:

Today’s Traveller Achievement award for “Innovative Hospitality Concepts”. The award was accepted by Mr.Vithal V. Kamat, Executive Chairman & Managing Director of the Company .

Hospitality India award for “The Best Ecotel Group”. The award was presented to Mr. Vithal V. Kamat, ExecutiveChairman & Managing Director of the Company from Mr. Praful Patel, Union Minister for Civil Aviation, Governmentof India.

CII-ITC Sustainability Award - Commendation Certificate for Strong Commitment among the Medium BusinessOrganization for the year 2007. The award was accepted by Mr. Vithal V. Kamat, Executive Chairman & ManagingDirector.

Star Achievers Award for the category of ‘Most Technologically Advanced Hotel of the Year’ was given byITM-IHMCT, and was accepted by Mr. Vithal V. Kamat, Executive Chairman & Managing Director, on 4th April,2007.

BSE and NASSCOM Foundation has given certificate to The Orchid an Ecotel Hotel for Social and CorporateGovernance Awards under the category of Best Corporate Social Responsibility Practice on 14th December,2007.

Star Hospitality Award – presented to Mr. Vithal V. Kamat, Executive Chairman & Managing Director, on 20th

February, 2008 for Path breaking Profession & Achievement in Environmental Consciousness.

The Orchid” has added another award to it’s grand collection by winning the “Srishti G-Cube Awards 2007 forGood Green Governance” instituted by Srishti Publications (P) Ltd. under the category of tourism on theoccasion of World Environment Day on 22nd April, 2008 at Delhi.

Hotel “VITS” won its maiden award, the award of Maharashtra Energy Developmental Agency (MEDA) for itsvaluable efforts in energy saving by using innovative and efficient technology devices and by creating energysaving awareness in its employees and community on 20th December, 2007.

Your Company has so far bagged 39 national and 22 international awards. Most of these awards have been wonmainly because of the environment awareness created by the flagship hotel, The Orchid.

The International Council of Pacific Area Travel Writers Association (PATWA) honored our Chairman and ManagingDirector Mr. Vithal V. Kamat with lifetime contribution award ‘Hall of Fame Lifetime Contribution in HospitalityIndustry Award’ given at the ITB, Berlin 2008.


9

PROJECTS UNDER IMPLEMENTATIONExisting HotelsRefurbishing of “The Orchid”, Mumbai-Phase IIYour Directors are pleased to report that the second phase of refurbishing of guest rooms and suites in theCompany’s flagship hotel “The Orchid” at Mumbai has been successfully completed during the year. This hasbeen very well received by the hotel guests. The work on refurbishing remaining 58 guest rooms and suites andcertain other areas of the hotel has also begun in the third phase.Upgrading of VITS, MumbaiSimultaneously, there are plans to provide well equipped amenities including setting up of a Specialty Restaurantin the Company’s business hotel “VITS” formerly known as “The Lotus Suites”.Refurbishing of Kamats Hotel Siddharth, NashikLikewise, restaurants and public area of Kamats Hotel Siddharth at Nashik have been upgraded and renovatedduring the year under review resulting in significant increase in the hotel revenues. The Company has alsoinitiated necessary steps to build additional six rooms to meet the increased demand.EXPANSION PROJECTS“The Orchid”, MumbaiThe Company’s plans to expand “The Orchid”, an Ecotel Hotel strategically located near the Mumbai DomesticAirport, by adding approximately 100 plus rooms on the land owned by Plaza Hotels Pvt. Ltd adjacent to thehotel are well on course. The Company has obtained necessary approval for the same and the construction workis expected to begin by June 2008.MANAGEMENT CONTRACTSAs reported last year, the Company has entered into contracts and arrangements for managing certain hotels/restaurants and earned fees of Rs. 59.08 lakhs.Centre for Study of Social Change, Bandra, MumbaiThe Company has entered into a Memorandum of Understanding with the Centre for Study of Social Change formanagement of their proposed star category hotel on the plot of land belonging to them. This project will beundertaken in due course of time. In the meantime, the company has set up a museum there for the benefit ofhotel guests.JOINT VENTURESBalewadi, PuneThe Company has also entered into a joint venture with Unity Realty & Developers Limited and BSEL InfrastructureRealty Limited to build, operate and manage 200 plus room 5 star and 200 plus room 3 star hotels at Balewadi,Pune in which Clearwater Capital Partners (Cyprus) Ltd is a major partner. As planned, civic works of both thehotels have already been completed and furnishing and balance work is in progress. The hotel will start functioningin the last week of September, 2008 thereby making this as Asia’s fastest built hotel project.OTHER PROPERTIESThe Company has acquired land at Baddi, Raipur, Nagpur,Coimbatore and Amravati for the purpose of developinghotels and restaurants at the appropriate time. All the above cities have great potential for tourism.SUBSIDIARY COMPANYThe Company acquired 60% of the paid up share capital of Concept Hospitality Ltd during the year and accordingly,the said Company has become the company’s subsidiary with effect from 3rd December, 2007. The subsidiary isengaged in providing management and consultancy services relating to hospitality industry.The Company has, on 16th April, 2008, made an application to the Central Government pursuant to section 212 ofthe Companies Act, 1956 seeking exemption from attaching the annual accounts of the subsidiary Company withthe annual accounts of the Company.The Central Government has, accorded its approval under Section 212 (8) of the Companies Act, 1956 directing theCompany that in relation to the subsidiary, namely Concept Hospitality Ltd, the provisions contained in sub-section(1) of section 212 of the Companies Act, 1956 shall not apply in respect of the Balance Sheet etc. of the subsidiaryfor the financial year ended 31st March, 2008 and hence, the same are not attached to the Company’s accounts.


10

The Company is however, presenting in the Annual Report the Consolidated Financial Statements of the subsidiaryduly audited by the statutory auditors of the Company and the same are in compliance with the applicable accountingstandards and the Listing Agreement. The information relating to the subsidiary is disclosed in the consolidated financialstatement under the sub-heads a) Capital b) Reserves c) Total Assets d) Total Liabilities e) Details of Investment (exceptin case of investment in the subsidiary) f) Turnover g) Profit before taxation h) Provision for taxation i) Profit after taxand j) Proposed dividend.The annual accounts of the subsidiary and related detailed information will be made available to the investors seekingsuch information at any point of time. The annual accounts of the subsidiary shall also be kept for inspection by anyinvestor at the head office of the Company.FIXED DEPOSITSThe Company has neither invited nor accepted any fixed deposits during the year under review.PARTICULARS OF EMPLOYEESInformation in accordance with sub-section (2A) of Section 217 of the Companies Act, 1956 read with the Companies(particulars of Employees) Rules 1975, and forming part of the Directors’ Report for the year ended31st March, 2008 is given in Annexure A to the Report.DIRECTORS’ RESPONSIBILITY STATEMENTAs required by Section 217(2AA) of the Companies Act, 1956 the Directors hereby confirm:1. That in the preparation of the annual accounts, the applicable accounting standards have been followed and

that there are no material departures.2. That the selected accounting policies were applied consistently and the Directors made judgments and

estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of theCompany as at 31st March, 2008 and of the profit of the Company for the financial year ended on that date.

3. That proper and sufficient care has been taken for the maintenance of adequate accounting records inaccordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company andfor preventing and detecting fraud and other irregularities to the best of the Directors’ knowledge and ability.

4. The annual accounts have been prepared on a going concern basis.ADDITIONAL INFORMATION REQUIRED UNDER THE COMPANIES (DISCLOSURE OF PARTICULARS IN THEREPORT OF BOARD OF DIRECTORS) RULES, 1988a. Conservation of Energy: The Company continued energy conservation efforts during the year. It has closely

monitored power consumption and running hours on day to day basis, thus resulting in optimum utilisationof energy. The hotel is fitted with energy saving devices to conserve energy in the long run.

b. Technology Absorption : The activities of Company at present do not involve technology absorption andresearch and development.

c. Foreign exchange earnings and outgo :Earnings : Rs. 5,052.73 lakhs (previous year Rs. 3,997.65 lakhs)Utilisation (including import of capital goods) : Rs. 656.88 lakhs (previous year Rs. 481.54 lakhs)

DIRECTORSPadmashree Thangam E. Philip, Mr. S. S. Thakur, Mr. T. M. Mohan Nambiar and Mr. Vikram V. Kamat retire byrotation and being eligible, offer themselves for reappointment. Your Directors recommend their re-appointment.Brief profiles of Padmashree Thangam E. Philip, Mr. S. S. Thakur, Mr. T. M. Mohan Nambiar andMr. Vikram V. Kamat proposed to be re-appointed as Directors of the Company are given in Annexure II to theNotice convening the ensuing Annual General Meeting.

The Board of Directors has, considering the valuable contribution of Mr. Vithal V. Kamat, Executive Chairmanand Managing Director, towards the impressive growth of the Company, decided, subject to the approval ofshareholders, to remunerate him by way of commission to be paid annually upto a ceiling of 1% of the net profitof the company computed in the manner specified in the Companies Act, 1956 for the period commencing from1st April, 2008. The commission will be paid in addition to the remuneration payable to him pursuant to the


11

resolution passed by the Shareholders at the Annual General Meeting held on 28th July, 2007. The Board ofDirectors has also decided, subject to the approval of shareholders, to remunerate the non executive directorsby way of commission to be paid annually upto a ceiling of 1% of the net profit of the company for a period of 5years commencing from 1st April, 2008. The accompanying notice of ensuing Twenty- First Annual GeneralMeeting contains necessary resolutions in this regard for your consideration.

CORPORATE GOVERNANCEAs per Clause 49 of the Listing Agreement with the Stock Exchanges, a separate section on ManagementDiscussion and Analysis and Corporate Governance Report together with a certificate from the Company’s Auditorsconfirming compliance is given in the annexure “B” and “C” forming part of this report.CORPORATE SOCIAL RESPONSIBILITYYour Company acknowledges its Corporate Social Responsibility (CSR) and accordingly, it undertakes on anongoing basis several eco friendly initiatives. The Company has organised blood donation camp at the Orchid,the flagship unit of the Company.As a caring corporate citizen your Company has recruited reasonable number of physically challenged persons,thereby providing employment opportunities to this under privileged segment of the Society.AUDITORSM/s. J. G. Verma & Co., Chartered Accountants, Mumbai retire at the ensuing Annual General Meeting and beingeligible, offer themselves for reappointment. M/s Anay Gogte & Co., Chartered Accountants, Mumbai have communicatedthat due to their pre-occupation it would not be possible for them to accept their re-appointment as joint auditorsand have requested the Company not to consider their name for re-appointment as the Joint Auditors of theCompany. Hence, the Board of Directors does not recommend their re-appointment.AUDITORS’ OBSERVATIONSWith regard to observations made by the Auditors in their report in para 16 of the annexure, the same are selfexplanatory and do not call for further explanation.EMPLOYEE RELATIONSThe relations of the management with staff and workers remained cordial during the entire year.ACKNOWLEDGEMENTSThe Directors place on record their appreciation for the sincere and whole hearted co-operation extended by allconcerned, particularly Securities & Exchange Board of India, Stock Exchanges, Department of Tourism, company’sbankers, Municipal authorities, Government of Maharashtra, Central Government, suppliers, clientele and staffand look forward to their continued support. The Directors also thank the shareholders for continuing their supportand confidence in the Company and its management.

ON BEHALF OF THE BOARD OF DIRECTORS

Vithal V. KamatExecutive Chairman & Managing Director

Place : MumbaiDate : 26th July, 2008


12

ANNEXURE ‘A’ TO THE DIRECTORS’ REPORT, 2008.Information as per Section 217 (2A) read with the Companies (Particulars of Employees ) Rules, 1975 and forming partof the Directors’ Report for the period ended 31st March 2008.Name Designation Qualifications Remuneration Experience Age Date of Particulars of last

(Rupees) Years Years Commencement employmentof employment

Mr. Vithal V. Kamat Execut ive Dip.In Elect. Engg. 58,54,407 35 56 1-4-1994 Plaza Hotels Pvt. Ltd.Chairman & (IV Sem.)ManagingDirector

Mr. K. P. Kannampilly* Director FHCIMAPGDHMCT 20,14,443 33 57 1-2-1996 K. Raheja Hotels Pvt Ltd(Whole TimeTechnicalDirectorupto 31st

October, 2007)

Mr. Venkatram Nagamall i* Chief Financial B.COM, MBA 36,55,924 20 46 24-4-2007 Brainvisa TechnologiesOf f icer Pvt. Ltd

Notes :1 . The nature of employment is contractual.2 . The remuneration shown above is gross and comprises of basic salary, allowances and perquisites.3 . *Employed for part of the year.4 . Relationship – Mr. Vithal V. Kamat, Executive Chairman and Managing Director is related to Mr. Vishal V. Kamat, Executive Director and Mr. Vikram V. Kamat,

Director. Mr. K. P. Kannampilly Director is related to Mr. Suhail Kannampilly, Director of the Company.


13

ANNEXURE “B” TO THE DIRECTORS’ REPORTMANAGEMENT DISCUSSION AND ANALYSIS

BUSINESS ENVIRONMENT, INDUSTRY STRUCTURE, DEVELOPMENT & OUTLOOKThe consistent boom in overall economy and buoyancy in tourism sector in particular continues to nourish thegrowth of hotel industry at a healthy rate which surpassed the global average. The hospitality industry is closelylinked to the tourism Industry and its growth has added fillip to the hotel industry. The average room rates andoccupancy rates remained firm in the year 2007-08. While the star rated luxury hotels in metro cities are expectedto perform well over the next few years, the budget and mid market hotels in tier II and tier III cities will witnesshuge growth and expansion. The growth is driven by strong surge in business and leisure travel by domestic andforeign tourists. The Commonwealth Games in 2010,and India co-hosting the Cricket World Cup in 2011 will alsocontribute to the overall growth in the hotel industry.

The phenomenal growth in sectors like information technology, telecom, retails, real estate, buoyant stockmarket and new business opportunities attracted foreign travellers to India. The share of India in internationaltourist arrival has progressively increased from 0.46 percent in 2004 to 0.49 percent in 2005 and further to an0.52 in 2006 and estimated 0.55 in 2007. Foreign tourist arrival rose from 3.46 million in 2004 to an estimated 5million in 2007. The growth of tourist inflow into India was well above world average. Due to growing Indian middleclass with higher disposable income, spending money on vacations abroad and at home growth of domestictravellers is also on the rise .The arrival of low cost airlines and competition among them offers cheaper optionsto the tourists.

Tourism is an important segment of the Indian economy. Besides, being an important exchange earner and majorcontributor to GDP, it also provides employment to millions of people in India both directly and indirectly. Indiawith its diverse landscape offers huge scope for theme based travel like, Medical Tourism, Adventure Tourism,Heritage Tourism, Pilgrimage Tourism, Eco- tourism and Wildlife Tourism among others.

As per the Annual Report 2007-08 presented by Ministry of Tourism, India was unanimously elected as theChairman of the Executive Council of the United Nation World Tourism Organisation(UNWTO) for one year inNovember 2007.India bagged the world Travel Awards-2007 in three categories viz. a) World Leading DestinationMarketing Award for the incredible India campaign b) Asia’s leading destination and c) Asia’s leading tourist andconvention bureau. India has been recognized as a favourite country of the year in the Conde’ Nast TravellerReaders Travel Award-2007.

The Government has adopted multi pronged approach for promotion of tourism which includes, declaring hoteland tourism industry as a high priority sector with a provision for hundred percent Foreign Direct Investment,initiatives for making bilateral and international co-operation , road shows in important European markets, IncredibleIndia and Athithi Devo Bhav Campaign across the world, development of integrated tourism circuits and ruraldestinations and creating awareness about the effect of tourism and preservation of the country’s rich heritageand culture. Proposal has also been made in the Union Budget 2008 for tax holidays for hotels in UNESCOrecognized heritage sites. These measures initiated by the Government are laudable but not sufficient. There isneed to upgrade the existing infrastructures like airport, highways and roads connectivity, power supply, hygienicwater, communication systems etc. to global standard in order to increase the country’s due share in the overallworld tourism which is, though rising at good pace is still at low level. The proposal in the Union Budget for taxholidays is only for hotels in heritage sites under UNESCO and hence it is too restrictive to yield the desiredresults for growth of the hotel industry.

OPPORTUNITIES, THREATS, RISKS AND CONCERNS

The principal factor for growth in the hotel industry is growth of the economy of the country. Any change in thegeneral economic scenario in the country or abroad or market conditions, change in the demand supply situation,


14

unhealthy competition in the industry and seasonal nature of hotel business, may affect the prospects of thehotel industry. The high cost of land also discourages investors to put in money for hotel construction which ishighly capital intensive. The entry of several global hotel chains in the country is likely to intensify the competitionin the industry.

The lack of trained and skilled manpower and high attrition rate are other factors of concern.

Across the country there is no rationalisation of taxes as states charge different rates.

Besides, political stability, riots or social unrest, war between nations, terrorist attacks, natural calamities,spread of deadly diseases like plague, bird flu etc., power and water shortage are other potential risk factors.

The Audit Committee and the Board periodically discuss the significant business risks identified by the Managementand review the measures taken for their mitigation.

REVIEW OF OPERATIONAL AND FINANCIAL PERFORMANCE

The Company has achieved an aggregate turnover of Rs. 15,267 lakhs for the financial year ended on31st March, 2008 as against the turnover of Rs. 11,283 lakhs for the previous financial year. Profit after taxes forthe year under review was Rs. 2,741 lakhs as against Rs. 2,058 lakhs for the previous year. The Average RoomRate, during the year under review, was recorded at Rs. 10,089 at The Orchid as compared to Rs. 8,139 in theprevious year and at Rs. 6,432 at VITS as compared to Rs. 4,814 in the previous year.

SEGMENT WISE PERFORMANCE

The Company is presently operating in only one segment i.e. hospitality.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

Adequate internal controls have been laid down by the Company to safeguard and protect its assets as well asto improve the overall productivity of its operations. The Internal Audit Department of the Company is complementedby the internal auditors, Pipalia Singhal & Associates, Mumbai to ensure compliance with the prescribed internalcontrol procedures. Internal audits are carried out at regular intervals and the audit reports are periodically laidbefore the Audit Committee for review.

HUMAN RESOURCES AND INDUSTRIAL RELATIONS.

The Company has 1150 employees. The Company values its employees as its key assets. Hence, efforts aremade on an ongoing basis to improve the efficiency of the employees by way of training, providing them withbetter working conditions and keeping them motivated at all times. Employees are provided opportunity to growand prosper. The authority and responsibility chain is clearly defined and the employees are free to convey theirideas and suggestions to their superiors. Team meetings are held at frequent intervals to improve communicationand interactions between the employees.

CAUTIONARY STATEMENT

Statements contained in the Management Discussion and Analysis describing the Company’s estimates, projectionsand expectations are forward looking statements and based upon certain assumptions and expectations offuture events over which the Company has no control and which could cause actual results to differ materiallyfrom those reflected in such statements. Readers should carefully review other information in this Annual Reportand in the Company’s periodic reports. The Company undertakes no obligation to update or revise any of thesefuturistic statements, whether as a result of new information, future events, or otherwise.


15

ANNEXURE “C” TO THE DIRECTORS’ REPORTCORPORATE GOVERNANCE REPORT

COMPANY’S PHILOSOPHY

The Company, Kamat Hotels (India) Ltd (KHIL) strongly believes in adopting and adhering to good corporategovernance practices. It upholds the values of transparency, professionalism and accountability and endeavoursto maintain these values on ongoing basis.

MANAGEMENT DISCUSSION AND ANALYSIS

The management discussion and analysis forms part of the Directors’ Report.

BOARD OF DIRECTORS

Composition, category of directors and their attendance at Board Meetings:

The Board of Directors has an optimum combination of executive, non-executive and independent directors. Thechairman of the Board is an executive director and not less than half of the Board comprises of independentdirectors. As on 31st March, 2008 the Board comprised of twelve directors including three executive directors,three non executive directors and six independent non executive directors. The directors are eminent personalitiesin their respective fields like, hoteliering, banking, finance, management, accounting and general administration.This combination has helped the company to take benefit of the rich experience and expertise of the directors intheir core areas of competence.

The following table gives information about the composition of the Board, category of directors, membership ofthe directors in the Boards and Board committees of other public limited companies and attendance of eachdirector at the Board meetings and last AGM of the Company:

Name Designation Board Chairmanship Membership No of Board Last AGMand Category membership of committee of committee Meetings Attendance

in other in other in other of KHIL (Yes/No.)companies* companies companies attended

Mr. Vithal V. Kamat Executive Chairman & 1 – – 6 Ye sManaging Director (Promoter)

Mr. K. P. Kannampilly Non-Executive Director 1 – – 6 Ye s

Padmash ree Independent 2 – – 2 N oThangam E. Philip Non Executive Director

Mr. Ramesh N. Shanbhag Whole-Time Director 2 – – 4 Ye s

Mr. S. S. Thakur Independent Non- 8 3 5 6 Ye sExecutive Director

Mr. Vishal V. Kamat Executive Director (Promoter) 1 – – 6 Ye s

Mr. Ved Prakash Khurana Independent Non-Executive Director 2 – – 6 Ye s

Mr. Pravin N. Ghatalia Independent Non-Executive Director 8 4 4 6 Ye s

Mrs. Rajyalakshmi Rao Independent Non-Executive Director 3 – – 3 Ye s

Mr. Suhail Kannampilly Non-Executive Director - – – 6 Ye s

Mr. T. M. Mohan Nambiar Independent Non-Executive Director 4 2 1 4 Ye s

Mr. Vikram V. Kamat Non-Executive Director(Promoter) 1 – – 6 Ye s

*Excluding private limited companies, Section 25 non profit companies, unlimited companies and companies where the director is an alternate director asper Section 278 of the Companies Act, 1956.


16

During the financial year 2007-2008, six Board meetings were held on 28th April, 2007, 30th May, 2007, 28th July,2007, 27th October, 2007, 22nd January, 2008 and 21st March, 2008. Leave of absence was granted to Directorswho could not attend the Board meetings.

None of the directors on the Board of the Company is a member of more than ten committees or acts aschairman of more than five committees across all companies in which he is a director. For the purpose ofreckoning this limit, only membership and chairmanship of the Audit Committee and the Shareholders’ GrievanceCommittee of directors have been considered. Necessary disclosures have been made by the directors in thisregard.

All the necessary information as required by Clause 49 of the Listing Agreements signed by the Company withthe Stock Exchanges is placed before the Board.

BOARD PROCEDURE

The Board of Directors, in its meetings, focuses mainly on issues concerning policy and business strategies anddeals with important issues relating to business development, internal controls, regulatory compliance and othermatters which need to be considered by the Board for ensuring good corporate governance and enhancing theCompany’s networth and value to the shareholders. The Board also reviews the performance of all the divisions ofthe Company.

COMMITTEES OF THE BOARD

The Board has constituted the following committees in conformity with the applicable statutory requirements andthe Listing Agreements entered in to between the Company and the Stock Exchanges.

AUDIT COMMITTEE

The Company has set up an independent and qualified Audit Committee. The chairman of the Committee is anindependent director who is an eminent senior chartered accountant having expertise in accounting and financialmanagement field. All the other members of the Committee are also non- executive independent Directors of highcaliber possessing vast experience, knowledge and management expertise in accounting and financial field.

The terms of reference of the Audit Committee are in conformity with clause 49 of the Listing Agreement. Accordingly,the Audit Committee, inter-alia, oversees the Company’s financial reporting process, ensures correct and adequatedisclosure of financial information and reviews financial statements, adequacy of internal control systems andcompliance of generally accepted accounting principles. The Committee also recommends the appointment ofStatutory Auditors and fixation of their audit fee.

During the year under review five meetings of Audit Committee were held on 28th April, 2007, 30th May, 2007, 28th

July, 2007, 27th October, 2007 and 22nd January, 2008.The composition of the Audit Committee and attendance atits meetings are as follows:

Sr. No. Name of the Member Category Meetings attended

1 Mr. Pravin N. Ghatalia Chairman 5

2 Mr. S. S. Thakur Member 5

3 Padmashree Thangam E. Philip Member 2

4 Mr. Ved Prakash Khurana Member 5

5 Mr. T. M. Mohan Nambiar Member 4

The Statutory Auditors, Internal Auditors, Chief Financial Officer and Corporate Accounts Manager attend themeetings of the Audit Committee upon invitation. The Company Secretary acts as secretary of the Committee.


17

REMUNERATION COMMITTEE

The scope and broad terms of reference of the Remuneration Committee are:

- To review the remuneration package of the executive directors and recommend suitable annual revisionwithin the upper limit sanctioned by the members.

- To recommend compensation, if any, to the non-executive directors in accordance with the Companies Act,1956.

Details of the composition of the Committee and attendance of the members at its meetings are as follows:

Sr. No. Name of the Member Category Meetings attended

1 Mr. S. S. Thakur Chairman 2

2 Padmashree Thangam E. Philip Member 1

3 Mr. Ved Prakash Khurana Member 2

4 Mr. T. M. Mohan Nambiar Member 1

Note: Mr. T. M. Mohan Nambiar was appointed as a member of the Remuneration Committee by the Board on 30th

May, 2007.

Two meetings of the Remuneration Committee were held on 28th April, 2007 and 28th July, 2007.

The Company Secretary, Mr. Mahesh Kandoi is currently the secretary of the Committee.

DETAILS OF REMUNERATION PAID TO THE WHOLE-TIME DIRECTORS DURING THE YEAR ENDED31ST MARCH, 2008

Name of the Director Salary & Perquisitesallowances (Rs.) (Incl. PF) (Rs).

Mr. Vithal V. Kamat 54,00,000 4,54,407Executive Chairman andManaging Director

Mr. K. P. Kannampilly 12,00,000 8,14,443Wholetime Technical Director (upto 31-10-2007)

Mr. Ramesh N. Shanbhag, 15,00,000 1,86,588Whole-time Director

Mr. Vishal V. Kamat, 15,00,000 2,10,763Executive Director

There is no performance linked incentive payable to Executive Directors.

The service contracts of all the above named whole-time directors was extended for a period of three years i.e.from 1st October, 2007 to 30th September 2010 with approval of shareholders. Mr. K.P. Kannampilly has, however,ceased to be a whole-time director since 31st October, 2007 due to his resignation, though he continues to be anon-executive director of the Company.


18

DETAILS OF SITTING FEES PAID TO NON EXECUTIVE DIRECTORS

(Amount in Rs.)

Name of the Director Board Audit Remuneration Shareholders’ Compensation TotalMeeting Committee Committee Grievance Committee

Fees Fees Fees Committee FeesFees

Padmashree Thangam E. Philip 40,000 40,000 5,000 5,000 – 90,000Mr. K. P. Kannampilly 40,000 – – – – 40,000Mr. S. S. Thakur 1,20,000 1,00,000 10,000 – 5,000 2,35,000Mr. Ved Prakash Khurana 1,20,000 1,00,000 10,000 5,000 – 2,35,000Mr. Pravin N. Ghatalia 1,20,000 1,00,000 – – 5,000 2,25,000Mr. T. M. Mohan Nambiar 80,000 80,000 5,000 – 5,000 1,70,000Mrs. Rajyalakshmi Rao 60,000 – – – – 60,000Mr. Suhail Kannampilly 1,20,000 – – – – 1,20,000Mr. Vikram V. Kamat 1,20,000 – – – – 1,20,000

Total 8,20,000 4,20,000 30,000 10,000 15,000 12,95,000

Number of shares and convertible instruments held by non-executive directors

Name No. of Shares

Padmashree Thangam E. Philip NILMr. K. P. Kannampilly* 3,800Mr. S. S. Thakur NILMr. Pravin N. Ghatalia NILMr. V. P. Khurana 1,500Mrs. Rajyalakshmi Rao NILMr. Suhail Kannampilly NILMr. T. M. Mohan Nambiar* 1,021Mr. Vikram V. Kamat (Promoter) 500

* Only shareholding as first holder is given.SHAREHOLDERS’ GRIEVANCE COMMITTEE:The composition of the Shareholders’ Grievance Committee and attendance of the members in its Meeting:

Sr. No. Name of the Members Category Meeting Attended

1 Mr. Ved Prakash Khurana Chairman 12 Padmashree Thangam E. Philip Member 13 Mr. Ramesh N. Shanbhag Member 1

A meeting of the Shareholders’ Grievances Committee was held on 30th May, 2007.The Company Secretary, Mr. Mahesh Kandoi is currently the secretary of the Committee.All share related issues are handled and resolved by the Share Transfer Committee. However, exceptional cases,if any, are referred to the Shareholders’ Grievance Committee.The scope and broad terms of reference of the Shareholders’ Grievances Committee are:- To look into shareholders’ complaints, if any, and to redress the same.- To approve requests for issue of duplicate share certificates due to loss, misplacement, mutilation etc. of

original share certificates and also to deal with requests for transmission of shares referred by the ShareTransfer Committee.


19

As certified by the Share Transfer Agents M/s. Intime Spectrum Registry Ltd, during the year under review theCompany received 31 shareholders’ complaints, which were promptly responded and resolved to the satisfactionof the concerned shareholders. As on 31st March, 2008 there were no pending share transfers with the Company.

ANNUAL GENERAL MEETINGS AND OTHER GENERAL MEETINGS HELD IN THE LAST 3 FINANCIAL YEARS:Particulars Extra Ordinary FY-2004-2005 Court Convened FY-2005-2006 FY-2006-2007

General Meeting AGM Meeting AGM AGMDate 19th March, 24th September, 22nd October, 23rd September, 28th July,

2005 2005 2005 2006 2007Location “Vishal Hall”, “Vishal Hall”, “Vishal Hall”, “Shubham Hall”, “Shubham Hall”,

Vishal Shopping Vishal Shopping Vishal Shopping Landmark Bldg., Landmark Bldg.,Centre, Hotel Centre, Hotel Centre, Hotel Opp. Vile Parle Opp. Vile ParleHighway Inn, Highway Inn, Highway Inn, Railway Stn., Railway Stn.,Andheri Kurla Road, Andheri Kurla Road, Andheri Kurla Road, Junction of Besant Junction of BesantAndheri (East), Andheri (East), Andheri (East), Road and V. P. Road, Road and V. P. RoadMumbai – 400 069 Mumbai – 400 069 Mumbai – 400 069 Vile Parle (W), Vile Parle (W),

Mumbai – 400 056 Mumbai – 400 056

Time 4.00 p.m. 11.00 a.m. 10.30 a.m. 11.00 a.m. 10.30 a.m.

Four Special Resolutions were passed at each of the Annual General Meetings held on 28th July, 2007 and 23rd

September, 2006. No Special Resolution was passed at the AGM held on 24th September 2005.The Companyhad not passed any Special Resolution in the last year through Postal Ballot. No Special Resolution is proposedto be conducted through Postal Ballot.

SUBSIDIARY COMPANY

Concept Hospitality Limited became a subsidiary of the Company with effect from 3rd December 2007.

The Audit Committee reviews the financial statements, in particular, the investments made by the subsidiarycompany. The minutes of the Board meetings of the subsidiary company are periodically placed before themeetings of the Board of Directors of the Company.

DISCLOSURES:

CEO and CFO Certification:

The Managing Director and Chief Financial Officer have given a certificate to the Board as contemplated inClause 49 of the Listing Agreement.

Related Party Transactions:

Transactions with the Related Parties are disclosed in note No. 3.6 to the Accounts in the Annual Report.

The Company has not entered into any transaction of material nature with any of its related parties that may havepotential conflict with the interest of the Company.

The Company has complied with various rules and regulations prescribed by SEBI or any other statutory authoritiesrelating to the capital market. No penalties/strictures have been imposed on the Company by Stock Exchanges,SEBI or any regulatory authority for non- compliance of any law on any matter related to capital market, duringthe last three years.

There is no formal Whistle Blower Policy but no employee is denied access to the Audit Committee.

The revised Clause 49 of the Listing agreement consists of mandatory and non-mandatory requirements. TheCompany is compliant with all the mandatory clauses. There is no Auditors’ qualification pertaining to financialstatement of the Company.


20

Code of Conduct:

The Board of Directors has laid down a “Code of Conduct”(Code) for all the Board members and the seniormanagement personnel of the Company and this Code is posted on the website of the Company. Annual compliancedeclaration is obtained from every person covered by the Code.

Risk Management

The Audit Committee and the Board periodically discuss the significant business risks identified by the Managementand review the measures taken for their mitigation.

A note on identification and mitigation of risks is included in Management Discussion and Analysis annexed tothe Directors’ Report.

MEANS OF COMMUNICATION

In order to attain maximum shareholders reach, the financial results of the Company are being published inwidely circulated newspapers. It also submits the required reports and returns to the concerned statutory bodies.The shareholders can contact the Company Secretary for necessary information through the following routes:

Telephone No. : 2616 4000Fax No. : 2616 4201Email : [email protected] : www.khil.com

GENERAL SHAREHOLDERS INFORMATION

1. 21st Annual General Meeting

Date : 30th August, 2008

Time : 3.00 P.M.

Venue: Shubham Hall”, Landmark Bldg., Opp. Vile Parle Railway Station, Junction of Besant Road andV. P. Road, Vile Parle (West), Mumbai – 400 056.

2. Registered Office of the Company and Address with Fax No. for Correspondence

Name of the Company : Kamat Hotels (India) LimitedRegistered Office : 70-C, Nehru Road, Vile Parle (East), Mumbai 400 099Telephone No. : 2616 4000Fax No. : 2616 4201Email : [email protected] : www.khil.com

3. Name and designation of Compliance Officer : Mr. Mahesh Kandoi - Company Secretary

4. Tentative Financial Calendar

Audited Annual Accounts for 31st May, 2007 (B M)*the year 2007–2008

Unaudited 1st quarter Results June 30, 2008 End of July 2008

Mailing of Annual Report On or before 6th August 2008Annual General Meeting 30th August, 2008


21

Unaudited 2nd quarter Results by 31st October, 2008 ( B M)(September 30, 2008)Unaudited 3rd quarter Results by 31st January, 2009 (B M)(December, 31st 2008)

Unaudited 4th quarter Results by 30th April, 2009 (B M)(March 31st 2009)* (B M) – Board Meeting

5. Dates of book closure: from 19th August, 2008 to 30th August, 2008 (both days inclusive)

6. Dividend payment date on or before 29th September, 2008for Dividend 2007-2008,if declared

7. Listing of Equity Shares on Stock Exchanges and Market Price Data

Name of the Stock Exchange(s) Stock Code/Symbol

Bombay Stock Exchange Limited 526668

National Stock Exchange of India Limited KAMATHOTEL

The Company has paid listing fee to both the Stock Exchanges upto the financial year 2008-2009.

8. Stock Market Price Data

Bombay Stock Exchange National Stock ExchangeLimited of India Limited –Mumbai

Month High(Rs) Low (Rs) High (Rs) Low (Rs)

April 2007 171.00 143.00 173.90 140.10

May 2007 184.40 147.05 183.00 146.00

June 2007 173.95 146.00 172.70 142.25

July 2007 198.80 145.00 198.80 143.10

August 2007 165.00 148.00 170.00 131.00

September 2007 195.00 160.00 194.95 156.10

October 2007 216.90 153.00 215.00 153.65

November 2007 227.95 182.05 225.55 172.65

December 2007 302.00 205.00 300.20 197.00

January 2008 314.90 182.00 314.70 175.00

February 2008 249.00 176.00 250.00 190.00

March 2008 224.90 138.50 215.00 140.00


22

9. Performance in comparison to Broad based indices Nifty.

10. Registrars and Transfer AgentsIntime Spectrum Registry Ltd.C-13, Pannalal Silk Mills CompoundL. B. S. Marg, Bhandup, Mumbai – 400 078.Tel No. 2596 3838 and Fax No. 2594 6969.For any query, investors are requested to get in touch with the Registrar and Transfer Agent at the addressmentioned above or the Company Secretary at the Registered Office of the Company.

11. Share Transfer SystemThe Share Transfer Committee constituted by the Board considers and approves all physical form sharerelated issues, transfers, transmission of shares, issue of duplicate shares etc. The transfer formalities areattended to on fortnightly basis by the nominated Registrars & Share Transfer Agents. The members of theShare Transfer Committee are:Mr. Vithal V. Kamat - Executive Chairman and Managing DirectorMr. Ramesh N. Shanbhag - Whole-time DirectorMr. Vishal V. Kamat - Executive DirectorThe shares are transferred and returned within the minimum stipulated period provided all the necessarydocuments are found in order.

12. Distribution of Shareholdings as on 31st March, 2008.

Shareholding of Nominal Value Rs. Number of % of Total Nominal % of TotalShareholders value Rs.

1 5,000 7,133 92.841 84,03,930 6.36795,001 10,000 280 3.644 23,49,560 1.780310,001 20,000 122 1.588 19,07,840 1.445620,001 30,000 46 0.599 11,94,360 0.905030,001 40,000 27 0.351 9,29,710 0.704540,001 50,000 13 0.169 6,12,680 0.464250,001 1,00,000 25 0.325 19,67,370 1.4907Above 37 0.483 11,46,08,500 86.84181,00,001Total 7,683 100.000 13,19,73,950 100.0000


23

Category of Shareholdings as on 31st March, 2008.

Category Shares % of Total

Promoter & Promoter group 96,37,198 73.02Directors and their Relatives (other than promoter) 8,872 0.07Mutual Fund 1,500 0.01NRI/OCBs 17,57,477 13.32Public: -Corporate Bodies 2,21,636 1.68- Individual and Others 15,70,712 11.90Total 1,31,97,395 100.00

13. Outstanding FCCBs

Pursuant to the approval of the Board of Directors in its meeting held on 30th April, 2006 and the SpecialResolution of the members passed in the 19th Annual General Meeting of the members of the Companyheld on 23rd September, 2006, the Company issued 5-year 1-day, 5.50% Foreign Currency ConvertibleBonds (FCCBs) aggregating to USD 18 million, with an option to the investors to convert the FCCBs intoordinary shares at Rs.225/- per share at any time from the issue date and 10 business days prior to14th March 2012. The conversion price is subject to adjustments as specified in the terms of the issue withminimum conversion price being regulatory floor price of Rs.170/-. The purpose of the said funding is topart-finance hotel projects of the Company in India. The terms of issue include redemption of the bonds atyield to maturity of 8.80% p.a. The entire outstanding bonds are redeemable at the option of the Companyafter 13th January, 2012 and 10 business days prior to 14th March, 2012, if the milestone event (i.e. 50% ofguest rooms of each of the three hotel projects are put to commercial operations within 36 months from thedate of issue of the bonds) are achieved.

The bonds are listed on the Singapore Stock Exchange, Singapore.

The Company had temporarily parked FCCB proceeds in deposits with banks during the year. The entireproceeds have been utilised for the Company’s hotel projects.

Except the above mentioned FCCB, there is no other outstanding GDR/Warrants and convertible bonds,conversion date of which is likely to have impact on the equity share capital of the Company.

14. Dematerialisation of Shares

As on 31st March, 2008, 1,27,16,841 (96.36%) of total Equity Capital was held in dematerialised form. Thetrading in equity shares of the Company is permitted only in dematerialised form w.e.f. 28th May, 2001 asper the notification issued by the SEBI. The relative ISIN NO. allotted to the company is INE 967C01018.

15. Location of Hotels

1. The Orchid, 70-C, Nehru Road, Vile Parle (E), Mumbai – 400 099. Tel No. 26164040.

2. “VITS”- Mumbai (formerly known as “The Lotus Suites”)Dhanodham, Kondivita Road, Off. Andheri KurlaRoad, Andheri (East), Mumbai - 400 059. Tel No. 28270707.

3. Kamats Hotel Siddharth, Near Nasardi Bridge, Nashik Pune Road, Nashik - 422001.Tel No. 95253-2413376/2412620.

4. Hotel Sunny International, 7, Dhantoli, Wardha Road, Opp. Big Bazar, Nagpur - 440 012.

5. Tourist Reception Centre, NH-17, at Moti Talao, College Road, Sawantwadi - 416 510.

6. Catering: Rambhau Mhalgi Prabodini at Keshav Srushti, Uttan, Bhayander (W), Maharashtra.


24

16. Address for Correspondence70-C, Nehru Road, Near Santacruz Airport,Vile Parle (East), Mumbai - 400 099Contact Person : Mr. Mahesh Kandoi, Company SecretaryTelephone No: 26164000, Fax 26164201Email: [email protected], Website:www.khil.com

17. Declaration on Code of ConductIt is confirmed that the Board has laid down a Code of Conduct for all Board members and senior managementpersonnel of the Company. The Code of Conduct has been posted on the website of the Company. It isfurther confirmed that all Directors and senior management personnel of the Company have affirmed compliancewith the Code of Conduct of the Company for the financial year ended on 31st March, 2008, as envisaged inclause 49 of the listing agreement with stock exchanges.

18. Disclosure of Relationship between DirectorsName of the Director RelationshipMr. Vithal V. Kamat Father of Mr. Vishal V. Kamat and Mr. Vikram V. KamatExec. Chairman and Managing DirectorMr. K. P. Kannampilly, Director Father of Mr. Suhail Kannampilly

ON BEHALF OF THE BOARD OF DIRECTORSPlace : Mumbai Vithal V. KamatDate : 26th July, 2008 Executive Chairman and Managing Director

AUDITORS’ CERTIFICATE ON COMPLIANCE OF CONDITIONS OF CORPORATE GOVERNANCE UNDERCLAUSE 49 OF THE LISTING AGREEMENTS

To,The Shareholders of Kamat Hotels (India) LimitedWe have examined the compliance of conditions of Corporate Governance by Kamat Hotels (India) Limited, for theyear ended 31st March, 2008 as stipulated in clause 49 of the Listing Agreement of the said Company with StockExchanges.The compliance of conditions of Corporate Governance is the responsibility of the management. Our examination waslimited to procedures and implementation thereof, adopted by the Company for ensuring the compliance of the conditionsof Corporate Governance. It is neither an audit nor an expression of opinion on the financial statements of the Company.In our opinion and to the best of our information and according to the explanations given to us, we certify that theCompany has complied in all material respects with the conditions of corporate governance as stipulated in the above-mentioned Listing Agreement.We state that no investor grievances are pending for a period exceeding one month against the Company as per therecords maintained by the Company and presented to the Shareholders Grievance Committee.We further state that such compliance is neither an assurance as to the future viability of the Company nor the efficiencyor effectiveness with which the management has conducted the affairs of the Company.

For J. G.VERMA & CO. For ANAY GOGTE & CO.Chartered Accountants Chartered Accountants

J. G. VERMA A. R. GOGTEPartner ProprietorMembership No. 5005 Membership No. 37046

Mumbai : 26th July, 2008


25

AUDITORS’ REPORT TO THE MEMBERSWe have audited the attached Balance Sheet of KAMAT HOTELS (INDIA) LIMITED, as at 31st March, 2008 and alsothe Profit and Loss Account and the Cash Flow Statement of the Company for the year ended on that date annexedthereto. These financial statements are the responsibility of the Company’s management. Our responsibility is to expressan opinion on these financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted in India. Those Standards requirethat we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free ofmaterial misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosuresin the financial statements. An audit also includes assessing the accounting principles used and significant estimatesmade by the management, as well as evaluating the overall financial statement presentation. We believe that ouraudit provides a reasonable basis for our opinion.

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

Further to our comments in the Annexure referred to above, we report that:

1. We have obtained all the information and explanations, which to the best of our knowledge and belief were necessaryfor the purpose of our audit.

2. In our opinion, proper books of account as required by law have been kept by the Company so far as appearsfrom our examination of those books.

3. The Balance Sheet, the Profit and Loss Account, and the Cash Flow Statement dealt with by this report, are inagreement with the books of account.

4. In our opinion, the Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealt with by thisreport, comply with the applicable Accounting Standards referred to in sub-section (3-C) of Section 211 of theCompanies Act, 1956.

5. On the basis of written representations received from the Directors of the Company, and taken on record by theBoard of Directors, we report that none of the directors of the Company is disqualified as on 31st March, 2008from being appointed as a director under clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956.

6. In our opinion and to the best of our information and according to the explanations given to us, the said accounts,read together with the significant accounting policies and the other notes appearing thereon, give the informationrequired by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity withthe accounting principles generally accepted in India:

(i) in the case of the Balance Sheet, of the state of the affairs of the Company as at 31st March, 2008;

(ii) in the case of the Profit and Loss Account, of the profit of the Company for the year ended on that date; and

(iii) in the case of the Cash Flow Statement, of the cash flows for the year ended on that date.

For J. G.VERMA & CO. For ANAY GOGTE & CO.Chartered Accountants Chartered Accountants


Mumbai: 31st May, 2008


26

ANNEXURE REFERRED TO IN OUR REPORT OF EVEN DATE1. (a) The Company has maintained proper records showing full particulars including quantitative details and situation

of fixed assets installed at its various units.(b) According to the information and explanations given to us, the fixed assets have been physically verified during

the year by the management in accordance with a phased programme of verification, which in our opinionprovides for physical verification of all the fixed assets at reasonable intervals. According to the informationand explanations given to us, the company has written of an amount of Rs. 173.49 Lakhs in respect of certainold and unusable fixed assets on completion of renovation of one of its hotels during the year. Except theabove, no material discrepancies were noticed on such verification.

(c) There has not been any significant disposal of fixed assets during the year affecting going concern.2. (a) As explained to us, physical verification of inventories has been conducted by the management at reasonable

intervals.(b) In our opinion and according to the information and explanations given to us; the procedures of physical

verification of inventories followed by the management are reasonable and adequate in relation to the size ofthe Company and the nature of its business.

(c) On the basis of our examination of the inventory records of the Company, we are of the opinion that the Companyis maintaining proper records of inventory. Discrepancies, which were noticed on physical verification of inventoryas compared to book records, were not material and have been properly dealt with in the books of account.

3. (a) According to the information and explanations given to us, the Company has not granted any loan, securedor unsecured to companies, firms or other parties covered in the Register maintained under section 301 of theCompanies Act, 1956 except (i) interest free trade deposits aggregating to Rs. 8,055.00 Lakhs (maximumbalance Rs. 8,385.00 Lakhs) to four such parties; and (ii) interest free shareholder’s deposit of Rs. Nil (maximumbalance Rs. 1000.00 Lakhs) with a joint venture company against issue of shares.

(b) The terms and conditions of above deposits given are prima facie not prejudicial to the interest of the Company.(c) None of the above deposits were due for refund during the year and accordingly our comments on the regularity

of receipt of the principal amount of these deposits given are not given.(d) There was no overdue amount of such deposits given by the Company during the year.(e) According to the information and explanations given to us, the Company has taken loans by way of secured

debentures aggregating to Rs. 893.95 Lakhs (maximum balance – Rs. 893.95 Lakhs) from such partiesnumbering four.

(f) The rates of interest and other terms and conditions of above debentures are prima facie not prejudicial to theinterest of the Company.

(g) The payment of the principal amount of these debentures and interest thereon was regular.4. In our opinion, and according to the information and explanations given to us, there is an adequate internal control

system commensurate with the size of the Company and the nature of its business for the purchase of inventoryand fixed assets and for the sale of goods and services. During the course of our audit, we have not observed anycontinuing failure to correct major weaknesses in the internal control system.

5. To the best of our knowledge and belief and according to the information and explanations given to us, (a) in ouropinion, the particulars of contracts or arrangements referred to in Section 301 of the Companies Act, 1956 havebeen entered in the register required to be maintained under that section; and (b) such transactions exceedingthe value of Rupees five lacs in respect of any party during the year have been made at prices, which are reasonablehaving regard to prevailing market prices at the relevant time.

6. The Company has not accepted any deposits from the public within the meaning of Section 58A 58AA and otherprovisions of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975. Hence theclause (vi) of the Order is not applicable to the Company.

7. In our opinion, the Company has an internal audit system commensurate with the size and nature of its business.8. The maintenance of cost records has not been prescribed by the Central Government under Section 209(1)(d) of

the Companies Act, 1956 for any of the products of the Company.9. (a) According to the records of the Company and the information and explanations given to us, the Company has

generally been regular in depositing undisputed statutory dues, including provident fund, investor educationand protection fund, employees state insurance, income-tax, sales-tax, wealth-tax, service tax, customs duty,excise duty, cess and other applicable statutory dues with the appropriate authorities during the year. According


27

to the information and explanations given to us, there are no undisputed amounts payable in respect ofundisputed statutory dues as at 31st March, 2008 which were outstanding for a period of more than six monthsfrom the date they became payable.

(b) According to the information and explanations given to us and on the basis of our examination of the documentsand records, there are no cases of non-deposit with appropriate authorities of disputed dues of sales-tax,wealth tax, service tax, customs duty, excise duty, cess. The details of disputed income-tax and propertytax are as under:

Name of the Statute / Nature of Amount Forum where disputethe dues and period (Rupees in Lakhs) is pending

Income tax Act, 1961 – Demand (disputed 3.42 Income-tax Appellate Tribunal andbut recovered by the Department) determined Commissioner of Income-taxon completion of assessment for A.Y. 2002-03 (Appeals)and 2003-04Property tax under BMC Act – Demand raised 368.89 Small Causes Courton revision of ratable value for the period fromAugust 1997 to March, 2008.

10. The Company does not have accumulated losses at the end of the financial year and has not incurred any cashlosses either during the financial year or immediately preceding financial year.

11. According to the records of the Company examined by us and the information and explanations given to us, theCompany has not defaulted in the repayment of dues to financial Institutions, banks and debenture holders.

12. In respect of loans of Rs. 200.00 Lakhs given by the Company in earlier year (considered doubtful by themanagement and fully provided for) inter alia on the basis of pledge of certain shares, the Company has maintainedadequate documents and records. Except the above, the Company has not granted loans and advances on thebasis of security by way of pledge of shares, debentures and other securities.

13. The provisions of any special statute applicable to chit fund / nidhi / mutual benefit fund / societies are not applicableto the Company.

14. The Company is not a dealer or trader in shares, securities, debentures, and other investments.15. According to the information and explanations given to us, the Company has given guarantee for loan taken by a

company from a bank the terms and conditions hereof, in our opinion are not prejudicial to the interest of theCompany.

16. According to the information and explanations given to us, the term loans raised by the Company have beenapplied for the purpose for which they were raised except that out of the total proceeds of Rs. 7,956.00 Lakhs ofthe Foreign Currency Convertible Bonds issued in 2006-07, funds aggregating to Rs. 776.34 Lakhs have beenutilized for hotel projects other than the hotel project originally agreed to.

17. According to the information and explanations given to us and on an overall examination of the Balance sheet ofthe Company, we report that no funds raised on short term basis have been used during the year for long terminvestment.

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

19. During the year, the Company has not issued any debentures. In respect of Foreign Currency Convertible Bondsissued by the Company in 2006-07, approval for issue of corporate guarantee by a group company to secure thesaid Bonds is awaited from Reserve Bank of India, and accordingly security has not been created for these Bonds.

20. The Company has not raised money by public issue during the year,21. To the best of our knowledge and belief, and according to the information given to us, no fraud on or by the Company

was noticed or reported during the year.For J. G. VERMA & CO. For ANAY GOGTE & CO.Chartered Accountants Chartered Accountants



28


BALANCE SHEET AS AT 31ST MARCH, 2008Prev. Year

SCHEDULE Rs. in Lakhs Rs. in Lakhs Rs. in LakhsSOURCES OF FUNDS:SHAREHOLDERS’ FUNDS:Share Capital A 1,378.59 1,378.59Reserves and Surplus B 14,817.79 12,547.95

16,196.38 13,926.54LOAN FUNDS:Secured Loans C 13,375.52 16,479.87Unsecured Loans D 10,744.28 11,258.87

24,119.80 27,738.74DEFERRED TAX LIABILITY (NET) 2,335.89 1,733.49

TOTAL 42,652.07 43,398.77APPLICATION OF FUNDS:FIXED ASSETS: EGross Block (At Cost) 32,905.10 26,203.98Less: Depreciation 5,267.98 4,436.66

Net Block 27,637.12 21,767.32Capital Work-In-Progress 3,577.70 3,020.50

31,214.82 24,787.82INVESTMENTS F 2,008.76 399.28LONG TERM DEPOSITS G 8,043.50 7,990.89CURRENT ASSETS, LOANS AND ADVANCES: HInventories 425.10 315.18Sundry Debtors 1,488.47 665.56Cash and Bank Balances 1,163.35 8,716.03Loans and Advances 2,240.32 3,053.58LESS: CURRENT LIABILITIES AND PROVISIONS: I 5,317.24 12,750.35Current Liabilities 2,186.92 1,331.44Provisions 1,745.33 1,198.13

3,932.25 2,529.57NET CURRENT ASSETS 1,384.99 10,220.78

TOTAL 42,652.07 43,398.77SIGNIFICANT ACCOUNTING POLICIES NAND NOTES ON ACCOUNTS

Signature on the above Balance Sheet and Schedules “A” to “I” and N”.As per our report of even date

For J. G. VERMA & CO. For ANAY GOGTE & CO. Vithal V. KamatChartered Accountants Chartered Accountants Executive Chairman & Managing Director

J. G. Verma A. R. Gogte Ramesh N. ShanbhagPartner Proprietor Wholetime Director

G. N. Shenoy Vishal V. KamatChief Financial Officer Executive Director

Mahesh KandoiCompany Secretary


29


PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2008Prev. Year

SCHEDULE Rs. in Lakhs Rs. in Lakhs Rs. in Lakhs(Except figures of EPS)

INCOME:Income from Hotel Operations J 14,761.18 11,192.98Other Income K 505.93 89.81

TOTAL 15,267.11 11,282.79EXPENDITURE:Operating and General Expenses L 8,078.65 5,970.05Interest and Finance Charges M 1,656.74 1,510.18Depreciation (Note 3.4(c) of schedule ‘N’) 990.52 794.42

TOTAL 10,725.91 8,274.65PROFIT FOR THE YEAR BEFORE EXTRA ORDINARY ITEMS AND TAX 4,541.20 3,008.14Less: Extra Ordinary Item (Note 3.4(a) of Schedule ‘N’) 171.61 -PROFIT FOR THE YEAR BEFORE TAX 4,369.59 3,008.14Less: Provision for Current Tax 998.00 339.33

Provision for Fringe Benefit Tax 28.00 17.00Provision for Wealth Tax 0.52 0.17

1,026.52 356.503,343.07 2,651.64

Less: Provision for Deferred Tax (Note 3.9 of Schedue ‘N’) 602.41 1,072.542,740.66 1,579.10

Add: MAT Credit Entitlement (Note 3.11 of Schedule ‘N’) – 479.10PROFIT AFTER TAX BUT BEFORE ADJUSTMENTS 2,740.66 2,058.20LESS: PRIOR PERIOD ADJUSTMENTS:

(Note 3.4(b) of Schedule ‘N’)Prior Period Expenses 760.64 -Less: Prior Period Credit 753.03 -

7.61 -NET PROFIT BEFORE APPROPRIATION 2,733.05 2,058.20APPROPRIATIONS:Proposed Dividend on Equity Shares (Tax Free) 395.92 329.93Tax on Proposed Dividend 67.29 56.07Transferred to General Reserve 280.00 210.00

743.21 596.001,989.84 1,462.20

ADD: SURPLUS BROUGHT FORWARD FROM PREVIOUS YEAR 3,060.77 1,598.57BALANCE PROFIT CARRIED TO BALANCE SHEET 5,050.61 3,060.77EARNING PER SHARE (EPS) (Note 3.8 of Shedule ‘N’)Earning Per Share before extra ordinary itemBasic EPS (Rs.) 21.63 15.60Diluted EPS (Rs.) 17.05 15.38Earning Per Share after extra ordinary itemBasic EPS (Rs.) 20.71 15.60Diluted EPS (Rs.) 16.33 15.38Number of Equity Shares used in Computing EPSFor Basic EPS 13,197,395 13,197,395For Diluted EPS 16,734,995 13,381,544Nominal Value (Rupees per Share) 10.00 10.00SIGNIFICANT ACCOUNTING POLICIES AND NNOTES ON ACCOUNTS

Signature on the above Profit and Loss Account and Schedules “J to N”.As per our report of even date






30


CASH FLOW STATEMENTP A R T I C U L A R S Year ended Year ended

31st March, 2008 31st March, 2007(Rs. in Lakhs) (Rs. in Lakhs)

A. CASH FLOW FROM OPERATING ACTIVITIES:Net profit before tax and extraordinary items 4,541.20 3,008.14Adjustment for:Depreciation 990.52 794.42Amortisation of Expenses - 6.01Loss on Sale/Discard of Fixed Assets 248.03 19.02Prior Period Adjustment and extra-ordinary items (179.23) -Unrealised Exchange Gain on Borrowings (203.86) -Provision for Loyalty Programmes 75.44 -Provision for Employee Benefits 99.61 63.65Dutyfree Import Benefits (138.82) -Provision for Doubtful Debts 24.26 8.10Investments income (0.18) (0.16)Interest income (52.06) (29.26)Interest paid 1,656.74 1,510.18Operating profit before working capital changes 7,061.65 5,380.10Trade and other receivables (753.98) (329.42)Inventories (109.92) (26.31)Trade Payables 758.37 3.19Cash generated from operations 6,956.12 5,027.56Interest paid (1,656.74) (1,510.18)Direct taxes paid (Net of refunds) (915.93) (302.94)Net cash from operating activities 4,383.45 3,214.44

B. CASH FLOW FROM INVESTING ACTIVITIES:Purchase of Fixed Assets (including Capital Work in Progress and capital advances) (7,548.50) (4,000.60)Sale Proceeds of Fixed Assets 21.77 3.18Deposits Refunds/Paid (including for properties) (52.61) (1,000.49)Investments made during the year (609.60) (1.07)Advance for Investment in Joint venture company - (1000.00)Sale of Investments 0.12 -Interest Received 52.06 29.26Dividend Received 0.18 0.16Net cash used in investing activities (8,136.58) (5,969.56)

C. CASH FLOW FROM FINANCING ACTIVITIES:Proceeds from long term borrowings 500.00 11,810.80Repayments of long term borrowings (3,691.22) (4,460.81)Proceeds from short term borrowings 3,500.00 4,975.00Repayments of short term borrowings (3,723.86) (1,239.11)Dividend paid (including Tax on Dividend) (384.47) (222.50)Net cash used in financing activities (3,799.55) 10,863.38NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS: (7,552.68) 8,108.26CASH AND CASH EQUIVALENTS AS AT 01.04.2007(Opening Balance) 8,716.03 607.77CASH AND CASH EQUIVALENTS AS AT 31.03.2008 (Closing Balance) 1,163.35 8,716.03

Note :- Cash and Cash Equivalents include exchange gain of Rs. Nil (Previous YearRs 52.56 Lakhs) arising out of revaluation of foreign currency deposits.

Signature on the above Cash Flow StatementAs per our report of even date






31


SCHEDULES FORMING PART OF THE BALANCE SHEET AS AT 31ST MARCH, 2008Prev. Year

Rs. in Lakhs Rs. in Lakhs Rs. in LakhsSCHEDULE “A”

SHARE CAPITAL:

AUTHORISED:

3,00,00,000 Equity Shares of Rs. 10/- each. 3,000.00 3,000.00

3,000.00 3,000.00

ISSUED, SUBSCRIBED AND PAID UP:

1,31,97,395 Equity Shares of Rs. 10/- each, fully paid up 1,319.74 1,319.74(See Note below)

Forfeited Shares Account 58.85 58.85

TOTAL 1,378.59 1,378.59

Note: Of the above, 24,54,545 (Prev. Year 24,54,545) Equity Shares of Rs. 10/- each were allotted at par during the year ended31st March, 2006 to the shareholders of erstwhile “The Himco (india) Limited” amalgamated with the Company pursuant to the Schemeof Amalgamation approved by the Bombay High Court vide Order dated 9th December, 2005.

SCHEDULE “B”

RESERVES AND SURPLUS:

SHARE PREMIUM ACCOUNT:

As per last accounts 5,550.55 5,550.55

DEBENTURE REDEMPTION RESERVE:

As per last accounts 1.00 1.00

CAPITAL REDEMPTION RESERVE:

As per last accounts 266.50 266.50

GENERAL RESERVE:

As per last accounts 3,669.13 3,459.13

Add: Transfer from Profit and Loss Account 280.00 210.00

3,949.13 3,669.13

SURPLUS IN PROFIT AND LOSS ACCOUNT 5,050.61 3,060.77

TOTAL 14,817.79 12,547.95

32


SCHEDULES FORMING PART OF THE BALANCE SHEET AS AT 31ST MARCH, 2008Prev. Year

Rs. in Lakhs Rs. in Lakhs Rs. in Lakhs

SCHEDULE “C”

SECURED LOANS:

DEBENTURES:

1. 89,39,500 12% Secured Non-Convertible Debentures 893.95 893.95of Rs. 10/- each. (Note 1 below)

TERM LOANS:

From Banks:

Long Term:

2. EXIM Bank (Note 2 below) 1,688.75 2,009.36

3. Andhra Bank (Note 2 below) 840.17 1,513.45

4. Canara Bank (Note 2 below) 5,947.61 6,839.00

5. The Saraswat Co-Operative Bank (Repaid during the year) - 4.87

6. Tamilnad Mercantile Bank Limited (Note 3 below) 395.80 645.83

8,872.33 11,012.51

Short Term:

7. Andhra Bank (Note 2 below) 2,000.00 -

8. Bank of India (Repaid during the year) - 750.00

9. State Bank of Travancore (Repaid during the year) - 750.00

10. The Karur Vysya Bank Limited (Note 3 below) 1,000.00 750.00

3,000.00 2,250.00

VEHICLE LOANS FROM BANKS (Note 4 below) 35.77 54.40

LOANS FROM OTHERS

11. Clearwater Capital Partners India Private Limited (Note 3 below) 500.00 1,500.00

CASH CREDIT FACILITY FROM A BANK (Note 5 below) 68.30 755.59

INTEREST ACCRUED AND DUE 5.17 13.42

TOTAL 13,375.52 16,479.87

33


SCHEDULES FORMING PART OF THE BALANCE SHEET AS AT 31ST MARCH, 2008SCHEDULE “C” CONTD...:

Notes :

(1) The Debentures under item (1) are secured by second charge on whole of the immovable and moveable property of Kamat HolidayResorts (Silvassa) Private Limited, situated at Silvassa together with all plant and machinery thereat under Debenture Trust Deeddated 6th April 2005. These Debentures shall be redeemed in one instalment on the expiry of twelve years from the date of allotment,i.e. 31st March 2005.

(2) The Loans under items (2), (3), (4) and (7) are secured by (i) hypothecation of moveable properties of the Company (save andexcept stocks and book debts),(ii) personal guarantee of Mr. V.V. Kamat, Executive Chairman and Managing Director of the Company,(iii) a Corporate Guarantee issued by Plaza Hotels Private Limited (PHPL) and (iv) First mortgage/charge by Composite Deed of Mortgageon immoveable properties being “The Orchid Hotel” at Vile Parle (East) Mumbai, land at plot no. A,B,C and D together with Hotel “VITS”at Dhanodham, Kondivita Road, off Andheri Kurla Road, Andheri (East), Mumbai, office unit No. 1,2 and 3 situated on 2nd Floor ofMalkani Chambers, Nehru Road, Vile Parle (East), and Flat No 101-B,102-B and 103-B on the 1st Floor in B Wing, Blue Arch, Bamanwada,Andheri (East) Mumbai on pari passu basis amongst the lenders. Corporate Loan included in item (3) of Rs. 7.12 Crores is furthersecured by (i) assignment of credit card receivables from American Express credit cards ; and (ii) pledge of 22,50,150 equity sharesof the PHPL held by promoters and their relatives. Rupee Term Loans included in item (4) aggregating to Rs. 33.82 Crores are furthersecured by (i) assignment of credit card receivables from Master and Visa credit cards; and (ii) pledge of 22,50,150 equity shares ofPHPL held by promoters and their relatives. Balance Rupee Term Loan included in item (4) of Rs. 1.80 Crores is further secured byhypothecation of Diners Credit Card receivables and equitable mortgage of Company’s office premises at Malkani Chambers, situatedat Vile Parle (East), Mumbai and pledge of certain investments held by the Promoters.

(3) The Loans under item (6), (10), and (11) are secured by pledge of investments held by the promoter group companies and personalguarantee of Executive Chairman and Managing Director of the Company.

(4) The Vehicle Loans (Long Term) are secured by hypothecation of certain vehicles.

(5) The Cash Credit Facility is secured by hypothecation of stocks and book debts of the company including certain credit card collectionsand mortgage by Composite Deed of Mortgage on immoveable properties described in note no. (2) above (Limit Rs.10.00 crores).

(6) Amount payable within one year Rs. 51.75 Crores (Prev. Year Rs. 58.66 Crores).

34


SCHEDULES FORMING PART OF THE BALANCE SHEET AS AT 31ST MARCH, 2008

Prev. YearRs. in Lakhs Rs. in Lakhs

SCHEDULE “D”

UNSECURED LOANS:

1. From Banks (Due to issue of cheques) 29.40 3.26

Long Term Loans from Others:

2. 5.50% Foreign Currency Convertible Bonds (US $ 18 Million) 7,200.00 7,956.00(Note 1 & 2 below)

3. Advance Time-Share Membership Money Received 3,389.88 3,174.61

4. Sales Tax Deferred (Note 3 below) 125.00 125.00

TOTAL 10,744.28 11,258.87

Notes:

1. Pursuant to the approval of Board of Directors in its meeting held on 30th April 2006 and Special Resolution of the members in the 19thAnnual General Meeting of the Company held on 23rd September, 2006 the Company issued 5-year 1-day, 5.50% Foreign CurrencyConvertible Bonds (FCCBs) during the year ended 31st March, 2007 aggregating to USD 18 million (Rs.79.56 Crores), with an option tothe investors to convert the FCCBs into ordinary shares at Rs.225/- per share at any time from the Issue Date and 10 business daysprior to 14th March 2012. The Conversion price is subject to adjustments as specified in the terms of the Issue with minimum conversionprice being regulatory floor price of Rs.170/-. The purpose of the said funding is to part-finance three hotel projects of the Company inIndia. The terms of issue include redemption of the Bonds at Yield To Maturity of 8.80% p.a. The entire outstanding bonds are redeemableat the option of the Company after 13th January, 2012 and 10 business days prior to 14th March, 2012, if the milestone events (i.e.50% of guest rooms of each of the three hotel projects are put to commercial operations within 36 months from the date of issue ofthe bonds) are achieved.

The bonds are listed on the Singapore Exchange Securities Trading Ltd., Singapore. The bonds shall be secured by the CorporateGuarantee of the promoter group companies, for which RBI approval is awaited.

2. The balance of FCCB proceeds has been fully utilised during the year by the Company on hotel projects undertaken by the Company.

3. The Compnay has deferred its sales tax liability in terms of certificate of entitlement granted for availing sales tax incentives issued bythe Sales Tax Department, Maharashtra. This liability will be due in installment from the year 2013 to 2022.

35


SCH

EDU

LES

FOR

MIN

G P

AR

T O

F TH

E B

ALA

NC

E SH

EET

AS

AT 3

1ST

MA

RC

H, 2

008

SCH

EDU

LE “

E”

FIXE

D A

SSET

S:(R

upee

s in

Lak

hs)

G R

O S

S

B L

O C

K (

A T

C O

S T

)D

E P

R E

C I

A T

I O

NN

E T

B

L O

C K

PAR

TIC

ULA

RS

AS

ATA

DD

ITIO

NS

DED

UC

TIO

NS

AS

ATU

PTO

FOR

TH

ED

EDU

CTI

ON

STO

-DAT

EA

S AT

AS

AT01

.04.

2007

(Not

e 2

belo

w)

31.0

3.20

0801

.04.

2007

YEA

R31

.03.

2008

31.0

3.20

07

(A) T

AN

GIB

LE A

SSET

S:

Land

:Fr

eeho

ld2,

955.

4227

0.20

-3,

225.

62-

--

-3,

225.

622,

955.

42B

uild

ings

:Fr

eeho

ld (

Not

e 1

belo

w)

8,63

9.46

686.

57-

9,32

6.03

1,15

2.82

198.

72-

1,35

1.54

7,97

4.49

8,96

0.15

Impr

ovem

ents

to

Hot

elB

uild

ings

und

er L

ong

Term

Con

tract

s8,

186.

235,

202.

8937

.92

13,3

51.2

085

0.28

317.

187.

621,

159.

8412

,191

.36

5,86

2.44

Sub

-Tot

al16

,825

.69

5,88

9.46

37.9

222

,677

.23

2,00

3.10

515.

907.

622,

511.

3820

,165

.85

14,8

22.5

9P

lant

& M

achi

nery

4,31

9.57

584.

9423

4.63

4,66

9.88

1,28

5.11

258.

4263

.28

1,48

0.25

3,18

9.63

3,03

4.45

Furn

iture

& F

ixtu

res

1,47

7.98

274.

1311

8.59

1,63

3.52

987.

5016

1.23

63.2

71,

085.

4654

8.06

793.

66O

ffice

Equ

ipm

ents

331.

8130

.50

32.1

833

0.13

7.63

28.1

319

.57

16.1

931

3.94

21.1

3Ve

hicl

es17

1.48

44.2

15.

6821

0.01

61.1

616

.21

5.46

71.9

113

8.10

110.

33To

tal

(A)

26,0

81.9

57,

093.

4442

9.00

32,7

46.3

94,

344.

5097

9.89

159.

205,

165.

1927

,581

.20

21,7

37.5

8(B

) IN

TAN

GIB

LE A

SSET

S:C

ompu

ter

Sof

twar

es12

2.03

36.6

8-

158.

7192

.16

10.6

3-

102.

7955

.92

29.7

4To

tal

(B)

122.

0336

.68

-15

8.71

92.1

610

.63

-10

2.79

55.9

229

.74

Gra

nt T

otal

26,2

03.9

87,

130.

1242

9.00

32,9

05.1

04,

436.

6699

0.52

159.

205,

267.

9827

,637

.12

21,7

67.3

2P

revi

ous

Year

Tot

al29

,719

.20

2,62

0.30

6,13

5.52

26,2

03.9

83,

679.

2379

4.42

36.9

94,

436.

6621

,767

.32

Cap

ital W

ork-

in-P

rogr

ess

3,02

0.50

7,33

0.35

6,77

3.15

3,57

7.70

--

--

3,57

7.70

3,02

0.50

(Not

e 3

belo

w)

Pre

viou

s Ye

ar T

otal

2,60

6.20

1,38

0.30

966.

003,

020.

50-

--

-3,

020.

50

Not

es :

1.B

uild

ings

inc

lude

(i)

cost

of

resi

dent

ial

flats

of

Rs.

54.

34 l

akhs

(P

rev.

Yea

r R

s. 5

4.34

lak

hs)

and

(ii)

cost

of

shar

es o

f R

s.0.

02 L

akhs

(P

rev.

Yea

r R

s.0.

02 L

akhs

) in

Co-

oper

ativ

e H

ousi

ng S

ocie

ty a

nd O

wne

rs C

ondo

min

ium

rep

rese

ntin

g ow

ners

hip

right

.2.

Ded

uctio

n in

Bui

ldin

gs i

nclu

de R

s. N

il (P

rev.

Yea

r R

s. 3

6.40

Lak

hs)

for

adju

stm

ent

on a

ccou

nt o

f ex

cess

pro

visi

on f

or S

tam

p D

uty

on m

erge

r w

ritte

n ba

ck o

n fin

alad

judi

catio

n.3.

Cap

ital w

ork-

in-p

rogr

ess

incl

udes

:(i)

Adv

ance

s/de

posi

t fo

r fix

ed a

sset

s R

s. 1

,275

.32

Lakh

s (P

rev.

Yea

r R

s.59

7.88

Lak

hs)

in w

hich

incl

uded

Rs.

488.

62 L

akhs

pai

d to

Cen

tre f

or S

tudy

of

Soc

ial C

hang

efo

r H

otel

Pro

ject

at

Ban

dra

Kur

la C

ompl

ex.

(ii)

Cap

ital W

orik

-In-P

rogr

ess

pend

ing

allo

catio

n in

cude

s: S

taff

Cos

t R

s.3.

53 L

akhs

(P

rev.

Year

Rs.

4.14

Lak

hs);

Trav

ellin

g E

xpen

ses

by D

irect

ors

Rs.

3.84

Lak

hs (

Pre

v.Ye

ar R

s.2.

29 L

akhs

); by

Oth

ers

Rs.

3.29

Lak

hs (

Pre

v. Y

ear

Rs.

5.09

Lak

hs);

Inte

rest

on

Fixe

d Lo

ans

Rs.

280.

23 L

akhs

(P

rev.

Yea

r R

s.27

1.72

Lak

hs);

Gen

eral

Exp

ense

sR

s.12

7.89

Lak

hs (

Pre

v. Y

ear

Rs.

134.

39 L

akhs

); Li

cenc

e, R

ates

& T

axes

Rs.

4.95

Lak

hs (

Pre

v. Y

ear

Rs.

14.5

4 La

khs)

; Le

gal &

Pro

fess

iona

l Cha

rges

Rs.

237.

95 L

akhs

(Pre

v. Y

ear

Rs.

16.0

7 La

khs)

; P

osta

ge &

Tel

epho

ne C

harg

es R

s.0.

03 L

akhs

(P

rev.

Yea

r R

s.0.

09 L

akhs

); P

rintin

g &

Sta

tione

ry R

s.0.

15 L

akhs

(P

rev.

Yea

r R

s.0.

15La

khs)

; Fi

nanc

e C

harg

es R

s.21

.13

Lakh

s (P

rev.

Yea

r R

s.22

.10

Lakh

s); A

dver

tisem

ent

Cha

rges

Rs.

0.36

Lak

hs (

Pre

v. Y

ear

Rs.

Nil)

; C

onsu

ltanc

y Fe

es R

s.38

.78

Lakh

s(P

rev.

Yea

r R

s.86

.43

Lakh

s);

Bui

ldin

g U

nder

Con

stru

ctio

n R

s.1,

410.

19 L

akhs

(P

rev.

Yea

r R

s.1,

514.

22 L

akhs

); Fu

rnitu

re &

Fix

ture

s R

s.31

.22

Lakh

s (P

rev.

Yea

rR

s.70

.40

Lakh

s); P

lant

& M

achi

nery

Rs.

4.90

Lak

hs (

Pre

v. y

ear

Rs.

122.

46 L

akhs

); FC

CB

Exp

ense

s R

s. 1

33.9

3 La

kh (

Pre

v. Y

ear

Rs.

158

.52

Lakh

s).

36




SCHEDULE “F”INVESTMENTS:LONG TERM - TRADE (AT COST)EQUITY SHARES (QUOTED)

1 Asian Hotels Limited - -1 Equity Share of Rs. 10/- each, fully paid up.(Amount Rs. 71/-)

2 Bharat Hotels Limited - -3 Equity Shares of Rs. 10/- each, fully paid up(Amount Rs. 22/-)

3 Centurion Bank of Punjab Limited 2.61 2.6158,725 Equity Shares of Re. 1/- each, fully paid up.

4 EIH Limited - -7 Equity Shares of Rs. 2/- each, fully paid up(Amount Rs. 211/-)

5 Fortune Financial Services Limited 11.91 11.9139,700 Equity Shares of Rs. 10/- each, fully paid up.

6 Hotel Leela Venture Limited - -5 Equity Shares of Rs. 2/- each, fully paid up(Amount Rs. 21/-)

7 Indusind Bank Limited 0.72 0.721,600 Equity Shares of Rs. 10/- each, fully paid up.

8 Oriental Hotels Limited - -1 Equity Share of Rs. 10/- each, fully paid up.(Amount Rs. 68/-)

9 Punjab National Bank Limited 0.03 0.03100 Equity Shares of Rs. 10/- each, fully paid up.

10 Satra Properties (India) Limited 0.57 0.57100 Equity Shares of Rs. 10/- each, fully paid up.

11 Suvarna Apparel & Fashion Exports Limited 1.00 1.0010,000 Equity Shares of Rs. 10/- each, fully paid up.

12 The Indian Hotels Company Limited - -10 Equity Shares of Re. 1/- each, fully paid up(Amount Rs. 179/-)Carried forward 16.84 16.84

37



Prev. YearRs. in Lakhs Rs. in Lakhs Rs. in Lakhs

SCHEDULE “F” (CONTD…)Brought forward 16.84 16.84

EQUITY SHARES: (UNQUOTED)1 Abhyudaya Co-Operative Bank Limited 0.50 0.50

5,000 Equity Shares of Rs. 10/- each, fully paid up.2 BW Highway Star Private Limited 1,000.00 -

20,00,000 Equity Shares of Rs. 10/- each, fully paid up.(Acquired during the year)

3 Kamat Concept Hospitality Private Limited 0.50 0.505,000 Equity Shares of Rs. 10/- each, fully paid up.

4 The Saraswat Co-Operative Bank Limited 0.25 0.252,500 Equity Shares of Rs. 10/- each, fully paid up.

5 The Satara Sahakari Bank Limited 1.00 1.002,000 Equity Shares of Rs. 50/- each, fully paid up.

1,002.25 2.25CUMULATIVE REDEEMABLE PREFERENCE SHARES: (UNQUOTED)

Vishal Amusements Limited 350.00 350.003,50,000 1% Cumulative Redeemable PreferenceShares of Rs. 100/- each.(Redeemable on the expiry of ten years fromthe date of allotment)

IN SUBSIDIARY (UNQUOTED)Concept Hospitality Limited 609.60 -4,80,000 Equity Shares of Rs. 10/- each, fully paid up.(Acquired during the year)

IN GOVERNMENT SECURITIES:6 Years National Savings Certificates(Deposited with Government Departments 0.07 0.19to the extent of Rs.0.07 Lakhs) (Prev. Year Rs.0.19 Lakhs)

INVESTMENTS-OTHERS:ICICI Tax Saving Bonds 10.00 10.00(Maturing on 16th November 2017)(200 Bonds of Rs. 5000/- each)IDBI Tax Saving Bonds 20.00 20.00(Maturing on 11th September 2014)(400 Bonds of Rs. 5000/- each)

30.00 30.00TOTAL 2,008.76 399.28

Notes:1. Aggregate of quoted investments:

At Cost 16.84 16.84At Market Value 92.20 47.49

2. Aggregate of unquoted investments:At Cost 1,991.92 382.44

38




SCHEDULE “G”

LONG TERM DEPOSITS:

Long Term Deposits for Hotel and Other properties 8,043.50 7,990.89

TOTAL 8,043.50 7,990.89

Note: The above deposits include Rs. 80.00 Crores (Prev. Year Rs. 79.43 Crores) paid to Plaza Hotels Private Limited(a Company wherein some directors are common).

SCHEDULE “H”

CURRENT ASSETS, LOANS AND ADVANCES:

CURRENT ASSETS:

Inventories:(Valued and Certified by the Management)

Food and Beverages 68.47 63.20Stores and Operating Supplies 356.63 251.98

425.10 315.18Sundry Debtors: (Unsecured, considered good,unless otherwise stated)Over six months (Incl. Rs.27.70 Lakhs considered doubtful) 198.22 41.24(Prev. Year Rs. 12.22 Lakhs)Others 1,317.95 636.54

1,516.17 677.78Less: Provision for Doubtful Debts (Note 1 below) 27.70 12.22

1,488.47 665.56Cash and Bank Balances:On Hand (Including Cheques on hand Rs.7.67 Lakhs) 25.56 133.03(Prev. Year Rs. 66.75 Lakhs)With Scheduled Banks on:Current Accounts 1,079.18 954.76Call and Deposit Accounts 41.18 7,616.38Dividend Accounts 13.13 11.59With Other Bank on: (Note 2 below)Current Account 4.30 0.27

1,163.35 8,716.03Carried forward 3,076.92 9,696.77

39




SCHEDULE “H” (CONTD…)

Brought forward 3,076.92 9,696.77

LOANS & ADVANCES:(Unsecured, considered good, unless otherwise stated)Inter-Corporate Deposits - Considered doubtful 200.00 200.00Less: Provision 200.00 200.00

- -Advances Recoverable in cash or kindor for value to be received (Note 3 below) 330.04 1,230.59Amount due from Subsidiary 59.50Interest receivable 37.73 42.54Deposits 212.35 435.67Prepaid Expenses 121.99 144.63MAT Credit Entitlement (Note 3.11 of Schedule ‘N’) - 479.10Staff Advances 11.37 12.74Payment of Taxes 1,467.34 708.31

2,240.32 3,053.58

TOTAL 5,317.24 12,750.35

Notes:1. Provision for doubtful debts:- Opening balance Rs. 12.22 Lakhs, Addition Rs. 15.48 Lakhs, Deduction Rs. Nil;

Closing balance Rs. 27.70 Lakhs.2. Balance with a Non-Scheduled Bank: Name of the Bank: The Dhanalakshmi Bank Limited;

In Current Account: Balance outstanding as on 31st March, 2008 Rs. 4.29 Lakhs (Prev. Year Rs.0.27 Lakhs)and maximum amount outstanding at any time during the year Rs. 5.00 Lakhs (Prev. Year Rs. 1.19 Lakhs).

3. Include Advance of Rs. Nil (Prev. Year Rs. 1,000 Lakhs) paid for acquiring shares in a joint venture company,which have been issued during the year and included under Schedule ‘F’ “Investments”.

SCHEDULE “I”

CURRENT LIABILITIES AND PROVISIONS:CURRENT LIABILITIES:Sundry Creditors (Note 1 below) 1,645.21 975.58(Include Rs. Nil due to Micro, Small and Medium Enterprises)Security Deposits 26.14 73.99Advance from Customers 201.02 49.79Interest accrued but not due 21.09 42.84Unclaimed Debentures (Note 2 below) 1.09 1.15Unclaimed Dividend 13.13 11.59Other Liabilities 203.80 176.50

SUB-TOTAL (A) 2,111.48 1,331.44

40




SCHEDULE “I” (CONTD…)

PROVISIONS:

Provision for Taxation:As per last accounts 677.24 330.14Add: Transferred during the year 1,026.52 356.50

1,703.76 686.64Less: Deductions during the year 156.90 9.40

1,546.86 677.24Less: MAT Credit Entitlement Availed 479.10 -

1,067.76 677.24Provision for Gratuity:As per last accounts 32.15 34.68Add: Transferred during the year 31.27 33.95

63.42 68.63Less: Contribution to LIC of India Gratuity Fund 4.49 36.48

58.93 32.15Provision for Earned Leave:As per last accounts 102.73 72.93Add: Transferred during the year 52.70 29.80

155.43 102.73Provision for Loyalty Programmes (Note 3 below) 75.44 -Proposed Dividend 395.92 329.94Tax on Proposed Dividend 67.29 56.07

SUB-TOTAL (B) 1,820.77 1,198.13

TOTAL [(A) + (B)] 3,932.25 2,529.57

Notes:

1. The Company has not received any intimation from suppliers regarding their status under the Micro, Small andMedium Enterprises Development Act, 2006 and hence disclosures, if any, relating to amounts unpaid as at theyear end together with interest paid/payable as required under the said Act have not been given.

2. In accordance with the terms of issue, the Company redeemed 12,00,000 14% Secured Non-Convertible Debenturesof Rs.100/- each in earlier year and paid/adjusted the redemption value to the debenture holders. However, certaindebenture holders holding debentures aggregating to Rs.1.00 Lakh did not surrender the debenture certificates tothe Company duly discharged and the same are pending redemption. Pending completion of formalities forredemption of the said debentures, the Company has shown the unpaid amount (net of amount due on allotment)under “Current Liabilities” and retained a sum of Rs. 1.00 Lakh in the Debenture Redemption Reserve. The Companyhas deposited an equivalent amount in a ‘no lien bank account’ for payment of this amount.

3. The Company has loyalty programmes, which enable its customers to accumulate points based on their spendsat the Company’s hotels. Such points can be encashed at the Company’s hotels or by purchase of merchandise.The above is the estimated liability against the loyalty schemes.

41


SCHEDULES FORMING PART OF THE PROFIT AND LOSS ACCOUNTFOR THE YEAR ENDED 31ST MARCH, 2008


SCHEDULE “J”INCOME FROM HOTEL OPERATIONS:a) Rooms, Restaurants, Banquets, and 13,735.12 10,268.39

Other Services[Include sale of food, beverages, etc.Rs. 2,676.06 Lakhs (Prev. Year 2,358.30 Lakhs)](Tax deducted at source Rs. 201.70 Lakhs)(Prev. Year Rs. 120.48 Lakhs)[Net of Excise Duty of Rs. 0.68 Lakhs(Prev. Year Rs. 0.42 Lakhs)]

b) Wines and Liquors 585.13 543.11c) Communication Services 148.82 137.17d) Income from Time-Share Business (See note below) 210.76 197.40e) Other Operations 81.35 46.91

(Tax deducted at source Rs. 4.17 Lakhs)(Prev. Year Rs. 0.44 Lakhs)

TOTAL (A) 14,761.18 11,192.98

Note:The Company’s business, inter alia, is to sell Time Share and provide holiday facilities to members for a specifiedperiod each year, over a number of years, for which membership fees is collected either in full upfront, or on a deferredpayment basis. Out of the total membership fee, relevant portion reasonably attributable towards cost required to marketTime Share, which is assessed and revised periodically, is recognized as Time Share income in the year in which thepurchaser of Time Share becomes a member and the balance representing ‘Advance towards members’ facilities isbeing recognized as Time Share income equally over a period for which holiday facilities are provided commencingfrom the year in which the member is entitled to benefits of membership under the scheme. Annual subscription feedues from timeshare members is recognized as income. Refer note 3.4 (b) of Schedule ‘N’.

SCHEDULE “K”OTHER INCOME:a) Dividend (Gross) 0.18 0.16

(Tax Deducted at source Rs. Nil)(Prev. Year Rs. Nil)

b) Interest (Gross) 52.06 29.26(Tax Deducted at source Rs. 1.25 Lakhs)(Prev. Year Rs. 3.26 Lakhs)

c) Shop Licence Fees 31.40 21.88(Tax Deducted at source Rs. Nil)(Prev. Year Rs. 0.54 Lakhs)

d) Gain on Foreign Exchange difference (Net) 213.46 -e) Miscellaneous Income (Note 3.12 of Schedule ‘N’) 208.83 38.51

TOTAL (B) 505.93 89.81TOTAL [(A)+(B)] 15,267.11 11,282.79

42




SCHEDULE “L”OPERATING AND GENERAL EXPENSES:1. OPERATING EXPENSES:(a) CONSUMPTION OF PROVISIONS, WINES AND SMOKES:

i) Provisions, Beverages (excluding Winesand Liquor) and SmokesOpening Stock 20.32 13.29Purchases 684.14 592.26

704.46 605.55Less: Closing Stock 30.13 20.32

674.33 585.23ii) Wines and Liquor

Opening Stock 42.87 16.67Purchases 121.27 136.76

164.14 153.43

Less: Closing Stock 38.34 42.87

125.80 110.56800.13 695.79

(b) PAYMENTS TO AND PROVISIONS FOR EMPLOYEES:

Salaries and Wages 1,878.45 1,447.79Contribution to Provident andEmployees State Insurance Fund 104.28 86.39Provision for Leave Encashment 56.80 29.71Retirement Gratuity 42.81 33.94Workmen and Staff Welfare Expenses 311.07 138.03

2,393.41 1,735.86

(c) OTHER OPERATING EXPENSES:Heat, Light and Power 865.75 529.74Repairs to Building 205.84 267.13Repairs to Plant & Machinery 187.35 251.72Repairs to Others 154.01 151.62Replacements 79.20 102.48Expenses on Apartment and Board 537.92 331.58Royalty and Fees on Sales 106.59 96.15Commission and Discount 372.82 291.61Music Expenses 147.20 129.86RCI Time Share Membership Expenses 7.07 14.31Washing and Laundry (Prev. Year Net) 178.91 80.39Water Charges 29.55 24.10

2,872.21 2,270.69Carried forward 6,065.75 4,702.34

43




SCHEDULE “L” (CONTD…)

Brought forward 6,065.75 4,702.34

2. GENERAL EXPENSES:Printing and Stationery 69.22 49.13Expenses on Communication Services 119.11 109.06Travelling and Conveyance 109.92 85.84Insurance 54.87 41.40Advertisement, Publicity and Sales Promotion 615.79 347.38Licences, Rent, Rates and Taxes 429.05 313.42Legal and Professional Fees 197.69 108.71Financial Consultancy Charges - 56.58Sitting Fees 12.95 12.80

Sales-tax / Luxury Tax etc. assessment dues 4.18 16.50Donations 0.39 2.65Bad Debts & Irrecoverable amounts written off (net) 24.26 8.10(Including Provision for Doubtful Debts of Rs.21.53 Lakhs)(Previous Year Rs. 8.10 Lakhs)Loss on sale/discard of Fixed Assets (Net) 248.03 19.02Loss on Foreign Exchange difference (Net) - 2.40Expenses on Amalgamation - 9.99Miscellaneous Expenses 127.44 84.73

2,012.90 1,267.71

TOTAL 8,078.65 5,970.05

SCHEDULE “M”

INTEREST AND FINANCE CHARGES :On Fixed Loans 1,465.88 1,432.38On Other Loans / Payments 171.42 45.25Finance Charges 19.44 32.55

TOTAL 1,656.74 1,510.18

44


SCHEDULE "N" FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 31ST MARCH, 2008.

SIGNIFICANT ACCOUNTING POLICIES AND NOTES ON ACCOUNTS

1. Background:

Kamat Hotels (India) Limited ("the Company" or "Kamats") was incorporated in India on 21st March, 1986 as apublic limited company under the Companies Act, 1956 with its registered office located in Mumbai. The Companywent public in April 1994 and the shares are currently listed on Bombay Stock Exchange and National StockExchange, and FCCBs are listed on the Singapore Exchange Securities Trading Limited, Singapore.

Kamats is an ISO 14001 company operating in hospitality sector, with its hotels and restaurants located in Mumbai,Nashik, Nagpur and Pune.

2. Significant Accounting Policies:

2.1 Basis for preparation of financial statements:

The financial statements are prepared and presented under the historical cost convention on the accrualbasis of accounting in accordance with accounting principles generally accepted in India ("Indian GAAP")and are in compliance with the Accounting Standards as notified by the Companies (Accounting Standards)Rules, 2006.

2.2 Use of estimates:

The preparation of the financial statements in conformity with Indian GAAP requires Company managementto make estimates and assumptions that affect the reported amounts of assets and liabilities and thedisclosure of contingent liabilities as of the date of financial statements. Actual results could differ fromthese estimates. Any revision to accounting estimates is recognized prospectively in the current and futureperiods.

2.3 Fixed assets and depreciation:

Fixed assets are carried at cost of acquisition less accumulated depreciation. The cost of acquisitionincludes inward freight, duties, taxes and other directly attributable incidental expenses including borrowingcost.

Depreciation on fixed assets is provided on the straight line method pro-rata to the period of use. The ratesof depreciation prescribed in Schedule XIV to the Companies Act, 1956 are considered as the minimumrates. If the management's estimate of the useful life of a fixed asset at the time of acquisition of the assetor of the remaining useful life on a subsequent review is shorter than that envisaged in the aforesaid schedule,depreciation is provided at a higher rate based on management's estimate of the useful life / remaininguseful life. Buildings taken on lease and Leasehold improvements are written off over the primary leaseperiod. Individual assets costing less than Rs. 5,000/- are depreciated in full in the year of purchase.

2.4 Impairment:

In accordance with Accounting Standard 28 - Impairment of Assets (AS 28), as notified by the Companies(Accounting Standards) Rules, 2006, the carrying amounts of the company's assets including intangibleassets are reviewed at each balance sheet date to determine whether there is any indication of impairment.If any such indication exists, the asset's recoverable amount is estimated, as the higher of the net sellingprice and the value in use. Any impairment loss is recognized whenever the carrying amount of an asset orits cash generating unit exceeds, its recoverable amount.

2.5 Leases:

Lease payment under an operating lease is recognized as an expense in the profit and loss account on astraight line basis over the lease term.

45


SCHEDULE "N" FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 31ST MARCH, 2008 (Contd...).

Assets taken on finance lease are capitalized and finance charges are charged to profit and loss accounton accrual basis.

2.6 Investments:

Long term investments are carried at cost less any diminution in value, other than temporary, determinedseparately of each individual investment.

2.7 Long Term Deposits:

Deposit amounts paid for acquiring management and other rights of enduring nature in the hotel and otherproperties owned by other parties for period exceeding ten years are classified as long term deposits.

2.8 Inventories:

Inventories are valued at lower of cost (weighted average basis) and net realizable value.

2.9 Revenue Recognition:

The Company derives revenues primarily from hospitality services. Revenue on time and material contractsare recognized as the related services are performed. Revenue from fixed price contracts are recognizedusing the percentage completion method. Revenue yet to be billed is recognized as unbilled revenue.Amounts received on long term contracts are represented as advance billing and is recognized proportionatelyover the period of the contract.

Sales and services are stated exclusive of taxes.

Interest income is recognized using the time proportion method based on the underlying interest rates.Dividends are recorded when the right to receive payment is established.

2.10 Export Benefits Entitlement:

Export Benefits in the nature of Duty Credit Scrips are recognised in Profit and Loss account upon theactual utilisation of Duty Credit Scrips.

2.11 Foreign exchange transactions:

Transactions in foreign currencies are recorded at the exchange rates prevailing at the date of thetransactions. Exchange differences arising on foreign currency transactions settled during the year arerecognized in the profit and loss account of the year.

Monetary assets and liabilities denominated in foreign currency at the balance sheet date are translated atthe year end exchange rate and the resultant exchange differences are recognized in the profit and lossaccount except those related to acquisition of imported fixed assets which are adjusted in the carryingamount of the related fixed assets.

2.12 Borrowing costs:

Borrowing costs that are directly attributable to the acquisition or construction of qualifying assets arecapitalised as part of the cost of such assets. However, capitalization of such costs is suspended duringextended periods in which active development of qualifying asset is interrupted. A qualifying asset is onethat necessarily takes substantial period of time to get ready for intended use. All other borrowing costsare recognized in the profit and loss account. Interest income earned from temporary deposits out of borrowedmoney pending deployment of funds to the full extent or until qualifying assets is ready, is reduced fromborrowing costs capitalized.

46



2.13 Provisions and contingent liabilities:

The Company creates a provision where there is a present obligation as a result of a past event that probablyrequires an outflow of resources and a reliable estimate can be made of the amount of obligation. A disclosurefor a contingent liability is made when there is a possible obligation or a present obligation that may, butprobably will not require an outflow of resources. When there is a possible obligation in respect of whichlikelihood of outflow of resources is remote, no provision or disclosure is made.

2.14 Employee benefits:

Contribution to provident fund, which is a defined contribution scheme, is recognized as an expense in theprofit and loss account in the year in which the contribution is made.

Provision for leave encashment is determined on the basis of actuarial valuation carried out by an independentactuary at the balance sheet date.

The Company contributes to a Group Gratuity Scheme administered by the Life Insurance Corporation ofIndia. The Contributions are charged to the Profit and Loss account. Provision is made for the differencebetween the actuarial valuation (determined as at the balance sheet date) and the funded balance on thebasis of projected unit credit method carried out annually. Actuarial gains and losses are immediatelyrecognised in the Profit and Loss Account.

2.15 Taxation:

Tax expense comprises of current, deferred and fringe benefit tax. Current income tax and fringe benefittax is measured at the amount expected to be paid to the tax authorities in accordance with the IncomeTax Act, 1961. Deferred income taxes reflect the impact of current period timing differences between taxableincome and accounting income for the year and reversal of timing differences of earlier years. Deferred taxis measured based on the tax rates and the tax laws enacted or substantively enacted at the balancesheet date. Deferred tax assets are recognised only to the extent that there is reasonable certainty thatsufficient future taxable income will be available against which such deferred tax assets can be realised.Deferred tax assets are recognised on carry forward of unabsorbed depreciation and tax losses only if thereis virtual certainty that such deferred tax assets can be realized against future taxable profits. Unrecogniseddeferred tax assets of earlier years are re-assessed and recognised to the extent that it has becomereasonably certain that future taxable income will be available against which such deferred tax assets canbe realised.

2.16 Prior Period Adjustments, Extraordinary items and changes in Accounting Policies:

Prior period adjustments, extraordinary items and changes in accounting policies having material impacton the financial affairs of the Company are disclosed.

2.17 Earnings per Share:

Basic earnings per share are calculated by dividing the net profit or loss for the year attributable to equityshareholders by the weighted average number of equity shares outstanding during the year. Partly paidequity shares are treated as a fraction of an equity share to the extent that they were entitled to participatein dividends relative to a fully paid equity share during the reporting year. The weighted average number ofequity shares outstanding during the year are adjusted for events of bonus issue; bonus element in a rightsissue to existing shareholders; share split; and reverse share split (consolidation of shares). For the purposeof calculating diluted earnings per share, the net profit or loss for the year attributable to equity shareholdersand the weighted average number of shares outstanding during the year are adjusted for the effects of alldilutive potential equity shares.

47



3. Notes on Accounts:

3.1 Previous year comparatives:

The figures for the previous year have been regrouped / rearranged wherever necessary.

3.2 Contingent liabilities:(a) Estimated amount of capital commitments to be executed on capital account and not provided for

Rs. 943.93 lakhs (Prev. Year Rs. 984.72 lakhs) (Net of advances).(b) Disputed Income Tax Demand Rs.3.43 lakhs (Prev. Year Rs.30.96 lakhs).(c) Open import licenses Rs. 179.36 lakhs (Prev. Year Rs. 198.92 lakhs)(d) Joint Corporate guarantee to a bank in respect of credit facilities availed by Joint venture company,

liability restricted to Rs. 3,666.67 lakhs (Prev. Year Rs. Nil)(e) Counter Guarantees issued by the Company to secure Bank Guarantees Rs. 40.72 lakhs (Previous

Year Rs. 35.52 lakhs)(f) Differential Interest payable on FCCBs on the basis of Yield To Maturity of 8.80% per annum, in the

event of non-conversion of Bonds into equity Rs. 289.90 lakhs (Prev Year Rs. 15.49 lakhs)(g) Other matters Rs. 260.02 lakhs (Prev. Year Rs.144.49 lakhs)

3.3 The Company has made provision for property tax at Rs. 249.92 lakhs (Previous year Rs.233.37 lakhs)based on bills raised by the Mumbai Municipal Corporation on the basis of assessment of ratable value ofthe Company's Hotels at Vile Parle and Andheri. The Company has disputed the assessment of the saidratable value by filing appeals, which are pending before an appropriate Court. Adjustments, if any, will bemade on disposal of appeals.


(a) Extra-ordinary item for the year represents Luxury tax assessment dues of Rs. 171.61 lakhs for theperiod from May 2004 to March 2005 paid on disposal of Luxury Tax appeal vide appallate order dated12th December 2007.

(b) Prior periods adjustments: In respect of time share operations, revenue out of the total membershipfees due is recognized in the year of membership to the extent of cost attributable to market suchmembership and balance membership fees is recognized equally over the membership period. In thepast, out of the total direct expenses incurred on marketing the time share scheme, the managementhad considered a part of such expenses attributable to the first year' income and balance such expenseswere netted off against the advance membership fees, which has been shown under Liabilities. TheCompany has now been advised that the entire expenses should be charged to revenue in the veryfirst year. Accordingly the balance of such expenses amounting to Rs. 753.04 lakhs incurred upto31st March, 2007 has been charged to revenue this year and a corresponding credit of equivalentamount out of the advance membership fees has been taken against the same to reflect the grossadvance membership fees, which will be recognized as income equally over the balance membershipperiod. The impact of the above adjustment on the year's profitability and the income-tax liability isneutral.

(c) Hitherto Company was providing depreciation on improvements to hotel buildings taken under LongTerm contracts at the rates prescribed in Schedule XIV to the Companies Act, 1956. The managementhas reviewed the same and decided to change the method of calculating depreciation on the cost ofimprovement to the hotel buildings taken on long term basis by writing off such cost over the primarylease period on straight line method from the date of the asset coming into use. Accordingly shortfallin depreciation of Rs. 120.79 lakhs (including Rs. 89.94 lakhs for the period upto 31.03.2007) has

48


been provided during the year and included in the Depreciation for the year. Had the Company followedthe old method, the depreciation charge for the year would have been lower by Rs. 120.79 lakhs andconsequently the profit for the year would have been more by the said amount.

3.5 Segment Reporting:

The Company's activities involve predominantly providing hospitality related services, which is consideredto be a single business segment since these are subject to similar risks and returns. Further, services arenot provided out of India and hence there are no reportable geographical segments. Accordingly, the financialstatements are reflective of the information required by Accounting Standard 17 - Segment Reporting asnotified by the Companies (Accounting Standards) Rules, 2006.

3.6 Related Party Disclosures:

Related Parties where control exists:

(a) Holding Company or Subsidiary Company:Concept Hospitality Limited (w.e.f. 3rd December, 2007) Subsidiary

(b) Associates:Plaza Hotels Private LimitedKamats Development Private LimitedKamat Holiday Resorts Private LimitedKamat Holiday Resorts (Silvassa) Private LimitedVishal Amusements LimitedTalent Hotels Private LimitedIndira Investments Private LimitedKamat Concept Hospitality Private LimitedBW Highway Star Private Limited (Joint venture)Concept Hospitality Limited (upto 2nd December, 2007)

(c) Key Management Personnel -

Mr. Vithal V. Kamat - Executive Chairman & Managing DirectorMr. K. P. Kannampilly Wholetime Technical Director (Upto 31st October, 2007)Mr. Ramesh N. Shanbhag - Wholetime DirectorMr. Vishal V. Kamat - Executive Director & also relative

(d) Other related parties with whom transactions have taken place during the year:

V. V. Kamat HUFKamats Klub, Lokhandwala (Prop. Mr. Vithal V. Kamat)

(e) Summary of transactions during the year with Related Parties entered into on commercial basis inthe interest of the Company and approved by the Board and status of outstanding balances as on31st March, 2008:


49


SCHEDULE "N" FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 31ST MARCH, 2008 (Contd...).Rs. in Lakhs

Sr. Nature of transactions Subsidiary Associates Key OtherNo. Company Management related

Personnel & partiesrelatives *

1. Gross Sale of services including Nil Nil Nil 4.22Management & Consultancy Fees (Nil)** (5.13) (Nil) (44.71)

2. Purchase of goods & services Nil 4.84 9.02 Nil(Nil) (5.16) (1.09) (Nil)

3. Consultancy Fees/Fees paid towards Nil 96.27 Nil Nilhotel property under Business (Nil) (79.03) (Nil) (Nil)Contract Agreement

4. Reimbursement of contractual 27.96 102.65 Nil Nilremuneration of personnel deputed (Nil) (158.74) (Nil) (Nil)to Company

5. Rent paid incl. Reimbursement of (Nil) 22.50 Nil 3.00expenses (Nil) (20.14) (Nil) (3.60)

6. Reimbursement received towards (Nil) 0.70 Nil Nilexpenses incurred (Nil) (15.79) (Nil) (0.02)

7. Interest paid Nil 75.54 Nil 51.24(Nil) (56.03) (Nil) (51.24)

8. Dividend paid Nil 220.47 16.89 3.47(Nil) (132.28) (10.28) (2.08)

9. Security Deposit given / refunded Nil 57.01 Nil Nil(Nil) (1,006.99) (Nil) (Nil)

10. Advances given on Capital/Current 59.50 30.00 Nil NilAccount (Nil) (54.45) (Nil) (Nil)

11. Inter Corporate Deposit Nil 1,000.00 Nil NilTaken / Refunded (Nil) (Nil) (Nil) (Nil)

12. Investments in Shares 609.60 1,000.00 Nil Nil(Nil) (0.50) (Nil) (Nil)

13. Balance outstanding at the year end:(a) Secured Non-convertible Nil 466.95 Nil 427.00

Redeemable Debentures (Nil) (466.95) (Nil) (427.00)(b) Investments in Shares 609.60 1,350.50 Nil Nil

(Nil) (350.50) (Nil) (Nil)(c) Accounts receivable 59.50 Nil Nil Nil

(Nil) (24.93) (Nil) (Nil)(d) Deposit paid incl. Under Nil 8,005.00 Nil 50.00

Business Contract Agreement (Nil) (7,947.99) (Nil) (380.00)(e) Amounts Payable Nil 27.22 0.01 Nil

(Nil) (22.74) (1.03) (Nil)

50


SCHEDULE "N" FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 31ST MARCH, 2008 (Contd...).Rs. in Lakhs

Sr. Nature of transactions Subsidiary Associates Key OtherNo. Company Management related

Personnel & partiesrelatives *

14. Corporate Guarantee issued by the Nil 3,666.67 Nil NilCompany in favour of a bank on (Nil) (Nil) (Nil) (Nil)behalf of Joint venture company

15. Corporate Guarantee / Personal Nil 19,807.93 13,831.76 NilGuarantee provided by Plaza Hotels (Ni) (19,444.76) (14,831.76) (Nil)Private Limited /Indira InvestmentsPvt. Ltd/ Executive Chairman &Managing Director

* Relatives of Key Management Personnel: Mrs. Vidya V. Kamat, Mr. Vikram Kamat and Ms. Vidita Kamat(wife and children respectively of Mr. Vithal V. Kamat), Mrs. Sharda S. Kamat (sister of Mr. Vithal V. Kamat)and Mrs. Sabrina Kannampilly (wife of Mr. K.P. Kannampilly), Mrs. Maya Shanbhag (wife of Mr. Ramesh N.Shanbhag).

** Figures in brackets are for Previous Year.3.7 Leases:

The Company's significant leasing arrangements are in respect of operating leases for premises. These leasingarrangements, which are not non-cancellable, range between 11 months and 9 years generally or longer andare usually renewable by mutual consent on mutually agreeable terms. The aggregate lease rentals payableare charged as rent and aggregate licence fees income from shops is shown as Licence Fees.Future commitments in respect of minimum lease payments payable for non-cancellable operating leases (otherthan land) entered into by the Company:Particulars Current Year Previous Year

(Rs. in Lakhs) (Rs. in Lakhs)

Payable within one year - 143.15 127.80Payable later than one year but not later than five years - 614.39 545.36Payable after five years - 2,787.21 2,693.95

The Company also has finance leasing arrangements in respect of vehicles. Future commitments in respect ofminimum installments payable under Finance schemes:

Particulars Current Year Previous Year(Rs. in Lakhs) (Rs. in Lakhs)

Minimum Installments:Payable within one year - 23.24 23.24Payable later than one year but not later than five years - 15.80 39.04Present value of Minimum installments:Payable within one year - 20.75 20.75Payable later than one year but not later than five years - 12.57 29.75

51



The Company also has given the shops on leave & license basis in respect of which future minimum licensefees receipts expected:


Receivable within one year - 47.67 31.76

Receivable later than one year but not later than five years - 17.21 7.55

Receivable after five years - Nil Nil

3.8 Earnings per share:Basic & Diluted:


Profit after tax as per Accounts:

Before Extraordinary items 2,853.94 2,058.20

After Extraordinary Items 2,733.05 2,058.20

No. of Shares issued 1,31,97,395 1,31,97,395

Nominal Value of Share (Rs. ) 10.00 10.00

Weighted average no. of shares - Basic 1,31,97,395 1,31,97,395

Basic E.P.S. (Rs.) :

Before Extraordinary items 21.63 15.60

After Extraordinary items 20.71 15.60

Weighted average no. of shares - diluted 1,67,34,995 1,33,81,544

Diluted E.P.S. (Rs.):

Before Extraordinary items 17.05 15.38

After Extraordinary items 16.33 15.38

3.9 Deferred Tax:

a) Major Components of Deferred Tax Assets and Deferred Tax Liabilities:


Deferred tax liabilities

Difference in depreciation. 2,575.55 2,356.27Expenditure claimed as revenue under the Income Tax Act, 1961 Nil Nilbut treated as deferred revenue expenditure in the books.

Total 2,575.55 2,356.27

52




Deferred tax assetsExpenses allowable for tax purpose on payment basis 230.24 178.92Unabsorbed Depreciation / Business Loss Nil 439.75Provision for doubtful debts / contingencies 9.42 4.11Total 239.66 622.78Deferred Tax Liability (net) 2,335.89 1,733.49Incremental Liability 602.40

(b) Deferred Tax Liability of Rs. Nil (Previous Year Rs.139.80 lakhs) was adjusted and transferred to AmalgamationReserve Account in accordance with the provisions of Accounting Standard 22 "Accounting for Taxes onIncome" on giving effect to the Scheme of amalgamation of The Himco (India) Limited with the Company.

3.10 Employee Benefits:

The disclosures required under Accounting Standard 15 "Employee Benefits" notified in the Companies (AccountingStandards) Rules 2006, are given below:

Defined Contribution Plan

Contribution to Defined Contribution Plan, recognized and charged off for the year are as under:

Particulars Current Year(Rs. in Lakhs)

Employer's Contribution to Provident Fund 41.33Employer's Contribution to Pension Scheme 36.59

Defined Benefit Plan

The employees' gratuity fund scheme managed by Life Insurance Corporation of India is a defined benefit plan.The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method,which recognises each period of service as giving rise to additional unit of employee benefit entitlement andmeasures each unit separately to build up the final obligation. The obligations for leave encashment is recognizedin the same manner as gratuity.

Gratuity (Funded):


a. Reconciliation of opening and closing balances of DefinedBenefit obligation

Defined Benefit obligation at beginning of the year 81.15Current Service Cost 14.01Interest Cost 1.56Actuarial (gain) / loss 15.08Benefits paid (12.13)Defined Benefit obligation at year end 99.67

53



Gratuity (Funded):


b. Reconciliation of opening and closing balances of fairvalue of plan assets

Fair value of plan assets at beginning of the year 71.74Expected return on plan assets 6.36Employer contribution 0.66Benefits Paid (12.13)Actuarial gain/(loss) 2.39Fair value of plan assets at year end 69.02Actual return on plan assets 6.36

c. Reconciliation of fair value of assets and obligations

Fair value of plan assets as at 31st March, 2008 69.02Present value of obligation as at 31st March, 2008 99.67Amount recognised in Balance Sheet 30.65

d. Net Gratuity and other cost for the year

Current Service Cost 14.01Interest Cost 1.56Expected return on plan assets (6.36)Actuarial (gain) / loss 15.08Net Cost 24.29

e. Investment Details % invested

L.I.C. Group Gratuity (Cash Accumulation) Policy 100

f. Actuarial assumptions

Mortality Table (L.I.C.) 1994-96 (Ultimate)Discount rate (per annum) 8.00%Expected rate of return on plan assets (per annum) 9.15%Rate of escalation in salary (per annum) 5.00%

Leave Encashment (Non-Funded):


a. Reconciliation of opening and closing balances ofDefined Benefit obligationDefined Benefit obligation at beginning of the year 102.74Actuarial (gain) / loss 52.70Defined Benefit obligation at year end 155.44

54




b. Reconciliation of fair value of assets and obligationsPresent value of obligation as at 31st March, 2008 155.44Amount recognised in Balance Sheet 155.44

c. Expenses recognized during the yearActuarial (gain) / loss 52.70Net Cost 52.70

The estimated of rate of escalation in salary considered in actuarial valuation, take into account inflation, seniority,promotion and other relevant factors including supply and demand in the employment market. The above informationis certified by the actuary. This being the first year of implementation of AS-15 (Revised), previous year figureshave not been given.

3.11. Income Tax

In accordance with guidance note issued by ICAI, the Company had accounted for MAT Credit Entitlement ofRs. 479.10 lakhs in the previous year which consists of MAT paid of Rs.143.53 lakhs and Rs. 335.57 lakhs forthe financial years 2005-06 and 2006-07 respectively. The said credit has been fully adjusted during the currentyear against the current year's tax liability.

3.12 Miscellaneous Income of Rs.208.83 lakhs (Prev. Year Rs.38.51 lakhs) includes Duty Free entitlement credit ofRs.138.82 lakhs for the period from 2004-05 to 2007-08 on capital account.

3.13 Additional information pursuant to the provisions of para IV of part II of schedule VI to the CompaniesAct, 1956

a) Auditors' Remuneration:


As Audit Fees 5.00 2.23For Tax Audit Fees 0.55 0.55For Certification & Other Services 2.13 1.07Out of Pocket Expenses 0.20 0.20Service Tax 0.97 0.50Total 8.85 4.55

b) Managerial Remuneration:


Remuneration to Managing and Whole Time Directors[Rs.54.00 lakhs to Managing Director(Prev. Year Rs.45.00 lakhs)] 96.00 81.18Contribution to Provident Fund 8.85 6.16Perquisites 7.81 0.93Directors sitting fees 12.95 12.80Total 125.61 101.07

55


SCHEDULE "N" FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 31ST MARCH, 2008 (Contd...).Note:- Managerial remuneration excludes provision for gratuity and earned leave, since it is provided on an acturialvaluation of the Company’s liability to all its employees.

c) Earnings in foreign exchange:


For Services rendered 5,052.73 3,997.65

d) Expenditure in foreign currency (including provisions):


Professional Fees Nil 147.22Interest on Foreign Currency Convertible Bonds 417.45 NilCommission to Travel Agents, Membership & 93.26 65.84Subscription, Internet / Website Charges, Bank Charges,Annual Listing Fees, Advertisement Charges, etc

e) Dividend to Non-resident Shareholders:

The Company has not made any remittance in Foreign Currencies on account of dividends during the year underreport and does not have information as to the extent to which remittance in foreign currencies on account ofdividends have been made by or on behalf of non-resident shareholders. The particulars of dividends paid to non-resident shareholders are as follows:

Particulars Current Year Previous Year(Rs. in lakhs) (Rs. in lakhs)

Dividend (2006-07):

(a) Number of non-resident shareholders 330 436(b) Number of Equity Shares held 16,49,893 11,37,380(c) Amount of Dividend remittable and paid 41.25 17.06

f) Value of Imports on CIF basis:

Particulars Current Year Previous Year(Rs. in lakhs) (Rs. in lakhs)

Capital Goods 141.20 250.74

Spare Parts 1.01 3.75

Provisions, Wines etc. 3.96 13.99

g) Quantitative Information:

In respect of the Company's turnover of Food & Beverages, it is not possible to give quantity-wise details of suchturnover. The Government of India, Ministry of Finance (Department of Company Affairs) vide their Order No. 46/83/2006-CL-III dated 30th May, 2006 has exempted the Company from giving these particulars in the accountsfor the financial year ending March 2006 to March 2008, subject to certain specific disclosures, which have beencomplied with by the company.

56


Information pursuant to Part IV of Schedule VI to the Companies Act, 1956:(Rupees in Thousands)

I Registration Details:CIN No. L55101MH1986PLC039307State Code 11Balance Sheet date 31.03.2008

II Capital raised during the year:Public Issue NilBonus Issue NilRight Issue NilPrivate Placement Nil

III Position of Mobilisation and Deployment of Funds:Total Liabilities 42,65,207Total Assets 42,65,207Sources of Funds:Paid up Capital 1,37,859Reserves & Surplus 14,81,779Secured Loans 13,37,552Unsecured Loans 10,74,428Deferred Tax Liability (Net) 2,33,589Application of Funds:Net fixed assets (incl. Capital work in progress) 31,21,482Investments 2,00,876Long Term Deposits 8,04,350Net Current Assets 1,38,499Miscellaneous Expenditure NilAccumulated Losses Nil

IV. Performance of the Company:Turnover (including other income) 15,26,711Total Expenditure 10,89,752Profit (+)/ Loss (-) before tax (+) 4,36,959Profit (+) / Loss (-) after tax (+) 2,73,305Earnings per equity share (in Rupees) 21.63Dividend on equity shares (Rate in %) 30%

V Generic Names of Three Principal Products of Company:The Company is in the business of hoteliering and catering & timeshare,which is not covered under ITC classification.

Vithal V. Kamat Executive Chairman & Managing Director

Ramesh N. Shanbhag Wholetime Director

Vishal V. Kamat Executive Director

G. N. Shenoy Mahesh KandoiMumbai: 31st May, 2008 Chief Financial Officer Company Secretary


57

AUDITORS’ REPORT ON CONSOLIDATED FINANCIAL STATEMENTS

To The Boards of Directors,Kamat Hotels (India) Limited

We have audited the attached Consolidated Balance Sheet of Kamat Hotels (India) Limited (the Company) and itsSubsidiary, Concept Hospitality Limited and its Jointly Controlled Entity Forbes Concept Hospitality Services PrivateLimited (collectively referred to as “the Group”) as at 31st March, 2008, and also the Consolidated Profit and LossAccount and the Consolidated Cash Flow Statement for the year ended on that date annexed thereto. These financialStatements are the responsibility of the Company’s management and have been prepared by the Management on thebasis of separate financial statements and other financial information regarding components. Our responsibility is toexpress an opinion on these financial statements based on our audit.

We conducted our audit in accordance with the auditing standards generally accepted in India. Those Standards requirethat we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free ofmaterial misstatements. An Audit also includes assessing the accounting principles used and significant estimatesmade by the Management, as well as evaluating the overall financial statement presentation. We believe that ouraudit provides a reasonable basis for our opinion.

We have relied upon the unaudited financial statements of jointly controlled entity of the subsidairy, i.e. Forbes ConceptHospitality Services Private Limited having total assets (net) of Rs.333.27 Lakhs as at 31st March, 2008, total revenuesof Rs.733.24 Lakhs and net cash flows amounting to Rs.25.55 Lakhs for the year then ended, which have been furnishedto us by the Management and our report in so far as it relates to the amounts included in respect of the said jointlycontrolled entity is based solely on such unaudited financial statements. We have not audited the aforesaid accountsof the said jointly controlled entity.

We report that the consolidated financial statements have been prepared by the Company’s management in accordancewith the requirements of Accounting Standard (AS) 21, Consolidated Financial statements, and Accounting Standard(AS) 27, Financial Reporting of Interests in Joint Venture notified by Companies (Accounting Standards) Rules, 2006.

Subject to the above and based on our audit as aforesaid, and on consideration of separete reports on individual financialstatements of the Company, its aforesaid subsidiary and subsidiary’s joint controlled entity referred to above and tothe best of our information and according to the explanations given to us, we ae of the opinion that the attachedconsolidated financial statements give a true and fair view in confirmity with the accounting principles generally acceptedin India:

i) In the case of the Consolidated Balance Sheet, of the State of Affairs of the Group as at 31st March, 2008,

ii) In the case of the Consolidated Profit and Loss Account, of the Profit of the Group for the year ended on thatdate; and

iii) In the case of the Consolidated Cash Flow Statement, of the Cash Flows of the Group for the year ended onthat date.

For J. G. VERMA & CO. For ANAY GOGTE & CO.Chartered Accountants Chartered Accountants




58

CONSOLIDATED BALANCE SHEET AS AT 31ST MARCH, 2008

SCHEDULE Rs. in Lakhs Rs. in LakhsSOURCES OF FUNDS:SHAREHOLDERS’ FUNDS:Share Capital A 1,378.59Reserves and Surplus B 14,718.05

16,096.64MINORITY INTEREST 160.06LOAN FUNDS:Secured Loans C 13,392.18Unsecured Loans D 10,754.37

24,146.55DEFERRED TAX LIABILITY (NET) 2,335.79

TOTAL 42,739.04APPLICATION OF FUNDS:FIXED ASSETS: EGross Block (At Cost) 33,092.91Less: Depreciation 5,352.43Net Block 27,740.48Capital Work-In-Progress 3,581.50

31,321.98GOODWILL (ON CONSOLIDATION) 433.89INVESTMENTS F 1,399.16LONG TERM DEPOSITS G 8,043.50CURRENT ASSETS, LOANS AND ADVANCES: HInventories 429.05Sundry Debtors 1,870.90Cash and Bank Balances 1,237.92Loans and Advances 2,484.02LESS: CURRENT LIABILITIES AND PROVISIONS: I 6,021.89Current Liabilities 2,467.96Provisions 2,018.36

4,486.32NET CURRENT ASSETS: 1,535.57MISCELLANEOUS EXPENDITURE: 4.94(To the extent not written off)

TOTAL 42,739.04

SIGNIFICANT ACCOUNTING POLICIES ANDNOTES ON ACCOUNTS: N

Signature on the above Balance Sheet and Schedules “A” to “I” and “N”.As per our report of even date

For J. G. VERMA & CO. For ANAY GOGTE & CO. Vithal V. KamatChartered Accountants Chartered Accountants Executive Chairman & Managing DirectorJ. G. Verma A. R. Gogte Ramesh N. ShanbhagPartner Proprietor Wholetime Director

G. N. Shenoy Vishal V. KamatChief Financial Officer Executive DirectorMahesh KandoiCompany Secretary



59

CONSOLIDATED PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2008SCHEDULE Rs. in Lakhs Rs. in Lakhs

(Except figures of EPS)INCOME:Income from Hotel Operations J 15,521.33Other Income K 536.98

TOTAL 16,058.31EXPENDITURE:Operating and General Expenses L 8,667.23Interest and Finance Charges M 1,663.63Depreciation (Note 2.4 (c) of Schedule ‘N’) 999.46

TOTAL 11,330.32PROFIT FOR THE YEAR BEFORE EXTRA ORDINARY ITEMS AND TAX: 4,727.99Less: Extra Ordinary Item (Note 2.4 (a) of Schedule ‘N’) 171.61PROFIT FOR THE YEAR BEFORE TAX 4,556.38Less:Provision for Current Tax 1,083.00

Provision for Fringe Benefit Tax 29.65Provision for Wealth Tax 0.52

1,113.173,443.21

Less: Provision for Deferred Tax 601.29PROFIT AFTER TAX BUT BEFORE ADJUSTMENTS 2841.92LESS: PROFIT ATTRIBUTABLE TO MINORITY INTEREST 42.92

2,799.00LESS: PRIOR PERIOD ADJUSTMENTS:(Note 2.4 (b) of Schedule ‘N’)

Prior Period Expenses 760.64Less: Prior Period Credit 753.03

7.61NET PROFIT BEFORE APPROPRIATION 2,791.39APPROPRIATIONS:Proposed Dividend on Equity Shares (Tax Free) 395.92Tax on Proposed Dividend 67.29Transferred to General Reserve 280.00

743.212,048.17

ADD: SURPLUS BROUGHT FORWARD FROM PREVIOUS YEAR 3,060.77BALANCE PROFIT CARRIED TO BALANCE SHEET 5,108.95EARNING PER SHARE (EPS) (Note 2.8 of Shedule ‘N’)Earning Per Share before extra ordinary itemBasic EPS (Rs.) 22.07Diluted EPS (Rs.) 17.40Earning Per Share after extra ordinary itemBasic EPS (Rs.) 21.15Diluted EPS (Rs.) 16.68Number of Equity Shares used in Computing EPSFor Basic EPS 13,197,395For Diluted EPS 16,734,995Nominal Value (Rupees per Share) 10.00SIGNIFICANT ACCOUNTING POLICIES ANDNOTES ON ACCOUNTS: N

Signature on the above Profit and Loss Account and Schedules “J” to “N”.As per our report of even date





60

CONSOLIDATED CASH FLOW STATEMENTPARTICULARS Year ended

31st March, 2008(Rs. in Lakhs)

A. CASH FLOW FROM OPERATING ACTIVITIES:Net profit before tax and extraordinary items 4,727.99Adjustment for:Depreciation 999.46Loss on Sale/Discard of Fixed Assets 248.04Prior Period Adjustment and extra-ordinary items (179.22)Unrealised Exchange Gain on Borrowings (203.86)Provision for Loyalty Programmes 75.44Provision for Employee Benefits 104.52Dutyfree Import Benefits (138.82)Provision for Doubtful Debts 53.11Investments income (0.18)Interest income (56.23)Interest paid 1,663.63Operating profit before working capital changes 7,293.88Trade and other receivables (1,171.89)Inventories (113.87)Trade Payables 1,022.51Cash generated from operations 7,030.63Interest paid (1,663.63)Direct taxes paid (Net of refunds) (999.49)Net cash from operating activities 4,367.51

B. CASH FLOW FROM INVESTING ACTIVITIES:Purchase of Fixed Assets (including Capital Work in Progress and (8,098.75)capital advances)Sale Proceeds of Fixed Assets 22.02Deposits Refunds/Paid (including for properties) (52.61)Sale of Investments 0.12Interest Received 56.23Dividend Received 0.18Net cash used in investing activities (8,072.81)

C. CASH FLOW FROM FINANCING ACTIVITIES:Proceeds from long term borrowings 500.00Repayments of long term borrowings (3,674.57)Proceeds from short term borrowings 3,500.00Repayments of short term borrowings (3,713.76)Dividend paid (including Tax on Dividend) (384.48)Net cash used in financing activities (3,772.81)NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS: (7,478.11)CASH AND CASH EQUIVALENTS AS AT 01.04.2007 (Opening Balance) 8,716.03CASH AND CASH EQUIVALENTS AS AT 31.03.2008 (Closing Balance) 1,237.92

Signature on the above Cash Flow StatementAs per our report of even date




61

SCHEDULES FORMING PART OF THE CONSOLIDATEDBALANCE SHEET AS AT 31ST MARCH, 2008

Rs. in Lakhs

SCHEDULE “A”

SHARE CAPITAL:

AUTHORISED:

3,00,00,000 Equity Shares of Rs. 10/- each. 3,000.00

3,000.00

ISSUED, SUBSCRIBED AND PAID UP:

1,31,97,395 Equity Shares of Rs. 10/- each, fully paid up 1,319.74(See Note below)

Forfeited Shares Account 58.85

TOTAL 1,378.59

Note: Of the above, 24,54,545 Equity Shares of Rs. 10/- each were allotted at par during the previous year ended 31st March, 2006 to theshareholders of erstwhile “The Himco (india) Limited” amalgamated with the Company pursuant to the Scheme of Amalgamation approvedby the Bombay High Court vide Order dated 9th December, 2005.

Rs. in Lakhs Rs. in Lakhs

SCHEDULE “B”

RESERVES AND SURPLUS:

SHARE PREMIUM ACCOUNT:

As per last accounts 5,550.55

DEBENTURE REDEMPTION RESERVE:

As per last accounts 1.00

CAPITAL REDEMPTION RESERVE:

As per last accounts 266.50

GENERAL RESERVE:

As per last accounts 3,669.13

Add: Transfer from Profit and Loss Account 280.00

3,949.13

Less: Share of Post Acquisition Reserve of Group Company 158.08

3,791.05

SURPLUS IN PROFIT AND LOSS ACCOUNT 5,108.95

TOTAL 14,718.05


62



SCHEDULE “C”SECURED LOANS:DEBENTURES:

1. 89,39,500 12% Secured Non-Convertible Debentures 893.95of Rs. 10/- each. (Note 1 below)

TERM LOANS:From Banks:Long Term:2. EXIM Bank (Note 2 below) 1,688.753. Andhra Bank (Note 2 below) 840.174. Canara Bank (Note 2 below) 5,947.615. Tamilnad Mercantile Bank Limited (Note 3 below) 395.806. Centurian Bank of Punjab (Note 4 below) 0.46

8,872.79Short Term:7. Andhra Bank (Note 2 below) 2,000.008. The Karur Vysya Bank Limited (Note 3 below) 1,000.00

3,000.00VEHICLE LOANS FROM BANKS (Note 5 below) 37.95LOANS FROM OTHERS (LONG TERM):9. Clearwater Capital Partners India Private Limited (Note 3 below) 500.00CASH CREDIT FACILITY FROM A BANK (Note 6 below) 82.32INTEREST ACCRUED AND DUE 5.17

TOTAL 13,392.18

Notes :(1) The Debentures under item (1) are secured by second charge on whole of the immovable and moveable property of Kamat Holiday

Resorts (Silvassa) Private Limited, situated at Silvassa together with all plant and machinery thereat under Debenture Trust Deeddated 6th April 2005. These Debentures shall be redeemed in one instalment on the expiry of twelve years from the date of allotment,i.e. 31st March 2005.

(2) The Loans under items (2), (3), (4) and (7) are secured by (i) hypothecation of moveable properties of the Company (save andexcept stocks and book debts),(ii) personal guarantee of Mr. V. V. Kamat, Executive Chairman and Managing Director of the Company,(iii) a Corporate Guarantee issued by Plaza Hotels Private Limited (PHPL) and (iv) First mortgage/charge by Composite Deed of Mortgageon immoveable properties being “The Orchid Hotel” at Vile Parle (East) Mumbai, land at plot no. A,B,C and D together with Hotel“VITS” at Dhanodham, Kondivita Road, off Andheri Kurla Road, Andheri (East), Mumbai, office unit No. 1,2 and 3 situated on 2nd Floorof Malkani Chambers, Nehru Road, Vile Parle (East), and Flat No 101-B,102-B and 103-B on the 1st Floor in B Wing, Blue Arch,Bamanwada, Andheri (East) Mumbai on pari passu basis amongst the lenders. Corporate Loan included in item (3) of Rs. 7.12 Croresis further secured by (i) assignment of credit card receivables from American Express credit cards ; and (ii) pledge of 22,50,150equity shares of the PHPL held by promoters and their relatives. Rupee Term Loans included in item (4) aggregating to Rs. 33.82Crores are further secured by (i) assignment of credit card receivables from Master and Visa credit cards; and (ii) pledge of 22,50,150equity shares of PHPL held by promoters and their relatives. Balance Rupee Term Loan included in item (4) of Rs. 1.80 Crores isfurther secured by hypothecation of Diners Credit Card receivables and equitable mortgage of Company’s office premises at MalkaniChambers, situated at Vile Parle (East), Mumbai and pledge of certain investments held by the Promoters.

(3) The Loans under item (5), (8), and (9) are secured by pledge of investments held by the promoter group companies and personalguarantee of Executive Chairman and Managing Director of the Company.

(4) The Loan from Centurion Bank of Punjab in case of jointly controlled entity is secured by hypothecation of fixed assets, stocks &receivables.

(5) The Vehicle Loans (Long Term) are secured by hypothecation of certain vehicles.

(6) The Cash Credit Facility is secured by hypothecation of stocks and book debts of the company including certain credit card collectionsand mortgage by Composite Deed of Mortgage on immoveable properties described in note no. (2) above (Limit Rs.10.00 crores).

(7) Amount payable within one year Rs. 51.75 Crores.


63


Rs. in Lakhs

SCHEDULE “D”

UNSECURED LOANS:

1. From Banks (Due to issue of cheques) 39.49

Long Term Loans from Others:

2. 5.50% Foreign Currency Convertible Bonds (US $ 18 Million) 7,200.00(Note 1 & 2 below)

3. Advance Time-Share Membership Money Received 3,389.88

4. Sales Tax Deferred (Note 3 below) 125.00

TOTAL 10,754.37

Notes:

1. Pursuant to the approval of Board of Directors in its meeting held on 30th April 2006 and Special Resolution of the members in the19th Annual General Meeting of the Company held on 23rd September, 2006 the Company issued 5-year 1-day, 5.50% ForeignCurrency Convertible Bonds (FCCBs) during the year ended 31st March, 2007 aggregating to USD 18 million (Rs.79.56 Crores),with an option to the investors to convert the FCCBs into ordinary shares at Rs.225/- per share at any time from the Issue Date and10 business days prior to 14th March 2012. The Conversion price is subject to adjustments as specified in the terms of the Issuewith minimum conversion price being regulatory floor price of Rs.170/-. The purpose of the said funding is to part-finance threehotel projects of the Company in India. The terms of issue include redemption of the Bonds at Yield To Maturity of 8.80% p.a. Theentire outstanding bonds are redeemable at the option of the Company after 13th January, 2012 and 10 business days prior to14th March, 2012, if the milestone events (i.e. 50% of guest rooms of each of the three hotel projects are put to commercial operationswithin 36 months from the date of issue of the bonds) are achieved.

The bonds are listed on the Singapore Exchange Securities Trading Ltd., Singapore. The bonds shall be secured by the CorporateGuarantee of the promoter group companies, for which RBI approval is awaited.

2. The balance of FCCB proceeds has been fully utilised during the year by the Company on hotel projects undertaken by the Company.

3. The Compnay has deferred its sales tax liability in terms of certificate of entitlement granted for availing sales tax incentives issuedby the Sales Tax Department, Maharashtra. This liability will be due in installment from the year 2013 to 2022.


64

SCH

EDU

LES

FOR

MIN

G P

AR

T O

F TH

E C

ON

SOLI

DAT

ED B

ALA

NC

E SH

EET

AS

AT 3

1ST

MA

RC

H, 2

008

SCH

EDU

LE “

E”

FIXE

D A

SSET

S:(R

upee

s in

Lak

hs)

PAR

TIC

ULA

RS

G R

O S

S

B L

O C

K

(A T

C

O S

T)

D E

P R

E C

I A

T I

O N

N E

T

B L

O C

K

AS

ATA

DD

ITIO

NS

DED

UC

TIO

NS

AS

ATU

PTO

FOR

TH

ED

EDU

CTI

ON

STO

-DAT

EA

S AT

01.0

4.20

0731

.03.

2008

01.0

4.20

07YE

AR

31.0

3.20

08

(A) T

AN

GIB

LE A

SSET

S:

Land

:Fr

eeho

ld2,

955.

4227

0.20

–3,

225.

62–

––

–3,

225.

62

Bui

ldin

gs:

Free

hold

(N

ote

1 be

low

)8,

639.

4669

1.48

–9,

330.

941,

152.

8219

9.50

–1,

352.

327,

978.

62

Impr

ovem

ents

to

Hot

el8,

186.

235,

202.

8937

.92

13,3

51.2

085

0.28

317.

177.

621,

159.

8312

,191

.37

Bui

ldin

gs u

nder

Long

Ter

m C

ontra

cts

Sub

-Tot

al16

,825

.69

5,89

4.37

37.9

222

,682

.14

2,00

3.10

516.

677.

622,

512.

1520

,169

.99

Pla

nt &

Mac

hine

ry4,

319.

5766

6.56

234.

894,

751.

241,

285.

1128

2.84

63.2

91,

504.

663,

246.

58

Furn

iture

& F

ixtu

res

1,47

7.98

294.

0211

8.59

1,65

3.41

987.

5017

2.60

63.2

71,

096.

8355

6.58

Offi

ce E

equi

pmen

ts33

1.81

64.0

232

.18

363.

657.

6348

.63

19.5

736

.69

326.

96

Vehi

cles

171.

4861

.85

5.68

227.

6561

.15

18.8

35.

4674

.54

153.

13

Tota

l (A

)26

,081

.95

7,25

1.02

429.

2632

,903

.71

4,34

4.49

1,03

9.57

159.

215,

224.

8527

,678

.86

(B) I

NTA

NG

IBLE

ASS

ETS:

Com

pute

r S

oftw

ares

122.

0367

.17

–18

9.20

92.1

635

.42

–12

7.58

61.6

2

Tota

l (B

)12

2.03

67.1

7–

189.

2092

.16

35.4

2–

127.

5861

.62

Gra

nd T

otal

26,2

03.9

87,

318.

1942

9.26

33,0

92.9

14,

436.

651,

074.

9915

9.21

5,35

2.43

27,7

40.4

8C

apita

l Wor

k-in

-Pro

gres

s3,

020.

507,

334.

156,

773.

153,

581.

50–

––

–3,

581.

50(N

ote

2 be

low

)

Not

es:

1.Bu

ildin

gs in

clud

e (i)

cos

t of

res

iden

tial f

lats

of

Rs.

54.3

4 la

khs

and

(ii)

cost

of

shar

es o

f R

s.0.

02 L

akhs

in C

o-op

erat

ive

Hou

sing

Soc

iety

and

Ow

ners

Con

dom

iniu

m r

epre

sent

ing

owne

rshi

p rig

ht.

2.C

apita

l wor

k-in

-pro

gres

s in

clude

s:(I)

Adva

nces

/dep

osit

for

fixed

ass

ets

Rs.

1,27

5.32

Lak

hs in

whi

ch in

clude

d R

s.48

8.62

Lak

hs p

aid

to C

entre

for

Stud

y of

Soc

ial C

hang

e fo

r H

otel

Pro

ject

at B

andr

a Ku

rla C

ompl

ex.

(ii)Ca

pital

Wor

ik-In

-Pro

gres

s pe

nding

allo

catio

n inc

udes

: Sta

ff Co

st Rs

.3.5

3 La

khs;

Tra

vellin

g Ex

pens

es b

y Di

recto

rs R

s.3.8

4 La

khs;

by O

ther

s Rs

.3.2

9 La

khs;

Inte

rest

on F

ixed

Loan

s Rs

.280

.23

Lakh

s ;

Gen

eral

Expe

nses

Rs.1

28.6

7 La

khs;

Licen

ce, R

ates

& T

axes

Rs.4

.95

Lakh

s; Le

gal &

Pro

fess

ional

Char

ges

Rs.2

40.7

4 La

khs;

Posta

ge &

Tele

phon

e Ch

arge

s Rs

.0.0

3 La

khs

; Prin

ting

& St

ation

ery

Rs.0

.15

Lakh

s; Fi

nanc

e Ch

arge

s Rs

.21.

13 L

akhs

; Adv

ertis

emen

t Cha

rges

Rs.0

.36

Lakh

s; Co

nsult

ancy

Fee

s Rs

.38.

78 L

akhs

; Buil

ding

Unde

r Con

struc

tion

Rs.1

,410

.42

Lakh

s; Fu

rnitu

re &

Fixt

ures

Rs.3

1.22

Lak

hs; P

lant &

Mac

hiner

y Rs

.4.9

0 La

khs;

FCCB

Exp

ense

s Rs

.133

.93

Lakh

s.


65


Rs. in LakhsSCHEDULE “F”INVESTMENTS:LONG TERM - TRADE (AT COST)EQUITY SHARES (QUOTED)

1 Asian Hotels Limited –1 Equity Share of Rs. 10/- each, fully paid up.(Amount Rs. 71/-)

2 Bharat Hotels Limited –3 Equity Shares of Rs. 10/- each, fully paid up(Amount Rs. 22/-)

3 Centurion Bank of Punjab Limited 2.6158,725 Equity Shares of Re. 1/- each, fully paid up.

4 EIH Limited –7 Equity Shares of Rs. 2/- each, fully paid up(Amount Rs. 211/-)

5 Fortune Financial Services Limited 11.9139,700 Equity Shares of Rs. 10/- each, fully paid up.

6 Hotel Leela Venture Limited –5 Equity Shares of Rs. 2/- each, fully paid up(Amount Rs. 21/-)

7 Indusind Bank Limited 0.721,600 Equity Shares of Rs. 10/- each, fully paid up.

8 Oriental Hotels Limited –1 Equity Share of Rs. 10/- each, fully paid up. (Amount Rs. 68/-)

9 Punjab National Bank Limited 0.03100 Equity Shares of Rs. 10/- each, fully paid up.

10 Satra Properties (India) Limited 0.57100 Equity Shares of Rs. 10/- each, fully paid up.

11 Suvarna Apparel & Fashion Exports Limited 1.0010,000 Equity Shares of Rs. 10/- each, fully paid up.

12 The Indian Hotels Company Limited –10 Equity Shares of Re. 1/- each, fully paid up(Amount Rs. 179/-)Carried forward 16.84


66



SCHEDULE “F” (CONTD…)Brought forward 16.84

EQUITY SHARES: (UNQUOTED)1 Abhyudaya Co-Operative Bank Limited 0.50

5,000 Equity Shares of Rs. 10/- each, fully paid up.2 BW Highway Star Private Limited 1,000.00

20,00,000 Equity Shares of Rs. 10/- each, fully paid up.(Acquired during the year)

3 Kamat Concept Hospitality Private Limited 0.505,000 Equity Shares of Rs. 10/- each, fully paid up.

4 The Saraswat Co-Operative Bank Limited 0.252,500 Equity Shares of Rs. 10/- each, fully paid up.

5 The Satara Sahakari Bank Limited 1.002,000 Equity Shares of Rs. 50/- each, fully paid up.

1,002.25CUMULATIVE REDEEMABLE PREFERENCE SHARES: (UNQUOTED)

Vishal Amusements Limited 350.003,50,000 1% Cumulative Redeemable PreferenceShares of Rs. 100/- each.(Redeemable on the expiry of ten years fromthe date of allotment)

IN GOVERNMENT SECURITIES:6 Years National Savings Certificates(Deposited with Government Departments 0.07to the extent of Rs.0.07 Lakhs)

INVESTMENTS-OTHERS:ICICI Tax Saving Bonds 10.00(Maturing on 16th November 2017)(200 Bonds of Rs. 5000/- each)IDBI Tax Saving Bonds 20.00(Maturing on 11th September 2014)(400 Bonds of Rs. 5000/- each)

30.00TOTAL 1,399.16

Notes:1. Aggregate of quoted investments:

At Cost 16.84At Market Value 92.20

2. Aggregate of unquoted investments:At Cost 1,382.32


67


Rs. in Lakhs

SCHEDULE “G”

LONG TERM DEPOSITS:

Long Term Deposits for Hotel and Other properties 8,043.50

TOTAL 8,043.50

Note:

The above deposits include Rs. 80.00 Crores paid to Plaza Hotels Private Limited (a Company wherein some directorsare common).


SCHEDULE “H”

CURRENT ASSETS, LOANS AND ADVANCES:

CURRENT ASSETS:Inventories:(Valued and Certified by the Management)Food and Beverages 68.47Stores and Operating Supplies 360.58

429.05Sundry Debtors: (Unsecured, considered good,unless otherwise stated)Over six months (Incl. Rs.45.53 Lakhs considered doubtful) 198.22Others 1,718.21

1,916.43Less: Provision for Doubtful Debts (Note 1 below) 45.53

1,870.90Cash and Bank Balances:On Hand (Including Cheques on hand Rs.7.67 Lakhs) 31.98With Scheduled Banks on:Current Accounts 1,127.25Call and Deposit Accounts 46.18Dividend Accounts 13.13With Other Bank on: (Note 2 below)Current Account 19.38

1,237.92Carried forward 3,537.87


68


Rs. in Lakhs Rs. in LakhsSCHEDULE “H” (CONTD…)

Brought forward 3,537.87

LOANS & ADVANCES:(Unsecured, considered good, unless otherwise stated)Inter-Corporate Deposits - Considered doubtful 200.00Less: Provision 200.00

–Advances Recoverable in cash or kindor for value to be received 343.02Amount due from Subsidiary 6.23Interest receivable 38.23Deposits 238.17Prepaid Expenses 126.33Staff Advances 22.67Payment of Taxes 1,709.37

2,484.02

TOTAL 6,021.89

Notes:1. Provision for doubtful debts:- Opening Balance Rs. 12.22 Lakhs; Addition Rs. 33.31 Lakhs; Deduction Rs. Nil;

Closing Balance Rs. 45.53 Lakhs2. Balance with a Non-Scheduled Bank: Name of the Bank: The Dhanalakshmi Bank Limited

In Current Account: balance outstanding as on 31st March, 2008 Rs. 4.29 Lakhs and maximum amount outstandingat any time during the year Rs. 5.00 Lakhs.

Rs. in Lakhs

SCHEDULE “I”CURRENT LIABILITIES AND PROVISIONS:CURRENT LIABILITIES:Sundry Creditors (Note 1 below) 1,887.67(Include Rs. Nil due to Micro, Small and Medium EnterpriseSecurity Deposits 26.33Advance from Customer 201.02Interest accrued but not due 21.09Unclaimed Debentures (Note 2 below) 1.09Unclaimed Dividend 13.12Other Liabilities 242.20

SUB-TOTAL (A) 2,392.52


69


Rs. in Lakhs Rs. in LakhsSCHEDULE “I” (CONTD…)PROVISIONS:Provision for Taxation:As per last accounts 835.71Add: Transferred during the year 1,113.17

1,948.88Less: Deductions during the year 156.90

1,791.98Less: MAT Credit Entitlement Availed (Note 2.11 of Schedule ‘N’) 479.10

1,312.88Provision for Gratuity:As per last accounts 32.15Add: Transferred during the year 44.45

76.60Less: Contribution to LIC of India Gratuity Fund 4.49

72.11Provision for Earned Leave:As per last accounts 102.74Add: Transferred during the year 67.42

170.16Provision for Loyalty Programmes 75.44(Made during the year) (Note 3 below)Proposed Dividend 395.92Tax on Proposed Dividend 67.29

SUB-TOTAL (B) 2,093.80TOTAL [(A) + (B)] 4,486.32

Notes:1. The Company has not received any intimation from suppliers regarding their status under the Micro, Small

and Medium Enterprises Development Act, 2006 and hence disclosures, if any, relating to amounts unpaidas at the year end together with interest paid/payable as required under the said Act have not been given.

2. In accordance with the terms of issue, the Company redeemed 12,00,000 14% Secured Non-ConvertibleDebentures of Rs.100/- each in earlier year and paid/adjusted the redemption value to the debentureholders. However, certain debenture holders holding debentures aggregating to Rs.1.00 Lakh did notsurrender the debenture certificates to the Company duly discharged and the same are pending redemption.Pending completion of formalities for redemption of the said debentures, the Company has shown theunpaid amount (net of amount due on allotment) under “Current Liabilities” and retained a sum ofRs. 1.00 Lakh in the Debenture Redemption Reserve. The company has deposited an equivalent amountin a ‘no lien bank account’ for payment of this amount.

3. The Company has loyalty programmes, which enable its customers to accumulate points based on there spendsat the Company’s hotels. Such points can be encashed at the Company’s hotels or by purchase of merchandise.The above is the estimated liability against the loyalty schemes.


70

SCHEDULES FORMING PART OF THE CONSOLIDATED PROFIT AND LOSS ACCOUNTFOR THE YEAR ENDED 31ST MARCH, 2008

Rs. in LakhsSCHEDULE “J”INCOME FROM HOTEL OPERATIONS:a) Rooms, Restaurants, Banquets, and 13,857.33

Other Services[Include sale of food, beverages, etc. Rs. 2,676.06 Lakhs](Tax deducted at source Rs. 201.70 Lakhs)[Net of Excise Duty of Rs. 0.68 Lakhs]

b) Wines and Liquors 585.13c) Communication Services 148.82d) Income from Time-Share Business (See note below) 210.76e) Other Operations 719.29

(Tax deducted at source Rs. 4.17 Lakhs)

TOTAL (A) 15,521.33Note:The Company’s business interalia is to sell Time Share and provide holiday facilities to members for a specified periodeach year, over a number of years, for which membership fees is collected either in full upfront, or on a deferred paymentbasis. Out of the total membership fee, relevant portion reasonably attributable towards cost required to market TimeShare, which is assessed and revised periodically, is recognized as Time Share income in the year in which thepurchaser of Time Share becomes a member and the balance representing ‘Advance towards members’ facilities isbeing recognized as Time Share income equally over a period for which holiday facilities are provided commencingfrom the year in which the member is entitled to benefits of membership under the scheme. Annual subscription feedues from timeshare members is recognized as income. Refer Note 2.4 (b) of Schedule ‘N’.

Rs. in LakhsSCHEDULE “K”OTHER INCOME:a) Dividend (Gross) 0.18

(Tax Deducted at source Rs. Nil)b) Interest (Gross) 56.23

(Tax Deducted at source Rs. 1.25 Lakhs)c) Shop Licence Fees 31.40

(Tax Deducted at source Rs. Nil)d) Gain on Foreign Exchange difference (Net) 213.46e) Miscellaneous Income (Note 2.12 of Schedule ‘N’) 235.71

TOTAL (B) 536.98TOTAL [(A)+(B)] 16,058.31


71



SCHEDULE “L”

OPERATING AND GENERAL EXPENSES:

1. OPERATING EXPENSES:

(a) CONSUMPTION OF PROVISIONS, WINES AND SMOKES:i) Provisions, Beverages (excluding Wines

and Liquor) and SmokesOpening Stock 21.66Purchases 751.75

773.41Less: Closing Stock 31.44

741.97ii) Wines and Liquor

Opening Stock 42.87Purchases 121.27

164.14

Less: Closing Stock 38.34

125.80867.77

(b) PAYMENTS TO AND PROVISIONS FOR EMPLOYEES:

Salaries and Wages 2,186.53Contribution to Provident andEmployees State Insurance Fund 127.40Provision for Leave Encashment 61.71Retirement Gratuity 42.81Workmen and Staff Welfare Expenses 341.43

2,759.88(c) OTHER OPERATING EXPENSES:

Heat, Light and Power 880.15Repairs to Building 205.84Repairs to Plant & Machinery 187.43Repairs to Others 154.95Replacements 79.20Expenses on Apartment and Board 537.92Royalty and Fees on Sales 113.64Commission and Discount 373.27Music Expenses 148.04RCI Time Share Membership Expenses 7.07Washing and Laundry 178.91Water Charges 29.61

2,896.03Carried forward 6,523.68


72



SCHEDULE “L” (Contd...)

Brought forward 6,523.68

2. GENERAL EXPENSES:Printing and Stationery 72.17Expenses on Communication Services 125.20Travelling and Conveyance 125.25Insurance 58.49Advertisement, Publicity and Sales Promotion 623.60Licences, Rent, Rates and Taxes 440.62Legal and Professional Fees 236.58Sitting Fees 15.75Sales-tax / Luxury Tax etc. assessment dues 4.18Donations 0.39Bad Debts & Irrecoverable amounts written off (net) 53.11(Including Provision for Doubtful Debts of Rs.33.31 Lakhs)Loss on sale/discard of Fixed Assets (Net) 248.03Miscellaneous Expenses 140.18

2,143.55

TOTAL 8,667.23

SCHEDULE “M”

INTEREST AND FINANCE CHARGES :On Fixed Loans 1,469.01On Other Loans / Payments 175.18Finance Charges 19.44

TOTAL 1,663.63


73

SCHEDULE "N" FORMING PART OF THE CONSOLIDATED ACCOUNTSFOR THE YEAR ENDED 31ST MARCH, 2008.

SIGNIFICANT ACCOUNTING POLICIES AND NOTES ON ACCOUNTS

1. Significant Accounting Policies

1.1 Basis for preparation of financial statements:

The Consolidated Financial Statements relate to Kamat Hotels (India) Limited ('the Company') its Subsidiary and JointlyControlled Entity as at 31st March, 2008. The Company, its subsidiary and jointly controlled entity constitute 'the Group'.The consolidated financial statements are prepared and presented under the historical cost convention on the accrualbasis of accounting in accordance with accounting principles generally accepted in India ("Indian GAAP") and are incompliance with the Accounting Standards as notified by the Companies (Accounting Standards) Rules, 2006.

1.2 Principles of Consolidation:

(a) The Consolidate Financial Statements have been prepared on the following basis:

- The financial statements of the Company and its Subsidiary have been combined on a line-by-line basis by addingtogether the book value of like items of assets, liabilities, income and expenses, after eliminating intra-groupbalances, intra-group transactions and unrealized profits or losses as per Accounting Standard 21 'ConsolidatedFinancial Statements' as notified by the Companies (Accounting Standards) Rules, 2006.

- Interests in Jointly Controlled Entity has been accounted for by using the proportionate consolidation method asper Accounting Standard 27 'Financial Reporting of Interest in Joint Ventures' as notified by the Companies(Accounting Standards) Rules, 2006.

- The financial statements of the Subsidiary and Jointly Controlled Entity used in the consolidation are drawn uptothe same reporting date as that date of the Company, i.e. 31st March, 2008.

- The excess of cost to the Company of its investment in the Subsidiary and Jointly Controlled Entity over theCompany's portion of equity, as at the date of making the investment, is recognized in the financial statements asGoodwill.

- The excess of Company's portion of equity of Subsidiary and Jointly Controlled Entity over the cost of acquisitionof the respective investments, as at the date of making the investment, is treated as Capital Reserve.

- Goodwill arising out of consolidation is not amortised.

- Minority Interest in the net assets of Subsidiary consist of :

i) the amount of equity attributable to the minorities at the date on which investment in a subsidiary is madeand.

ii) the minorities' share of the movements in equity since the date the parent subsidiary relationship cameinto existence.

(b) The list of Subsidiary and Jointly Controlled Entity, which are included in the consolidation with their respectivecountry of incorporation and the Group's holdings therein, is given below:-

i) Subsidiary Company:-

Name of the Company : Concept Hospitality Ltd. (w.e.f. 3rd December, 2007)

Country of Incorporation : India

Holding % : 60%

ii) Jointly Controlled Entity (by the above subsidiary):-

Name of the Company : Forbes Concept Hospitality Services Pvt. Ltd.

Country of Incorporation : India

Holding % : 50%


74

In the case of the above Jointly Controlled entity, un-audited financial statements, as certified by the Management, havebeen considered in the consolidated financial statements. The adoption of the accounts by the Board of Directors ofthe said jointly controlled entity company is pending.

1.3 Use of estimates:

The preparation of the financial statements in conformity with Indian GAAP requires the management to make estimatesand assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilitiesas of the date of financial statements. Actual results could differ from these estimates. Any revision to accountingestimates is recognized prospectively in the current and future periods.

1.4 Fixed assets and depreciation:

Fixed assets are carried at cost of acquisition less accumulated depreciation. The cost of acquisition includes inwardfreight, duties, taxes and other directly attributable incidental expenses including borrowing cost.

Depreciation on fixed assets is provided on the straight line method pro-rata to the period of use. In respect of thesubsidiary and jointly controlled entity, depreciation is provided on the written down value method at the rates and in themanner specified in Schedule XIV to the Companies Act, 1956, amount in respect of which are not material. The ratesof depreciation prescribed in Schedule XIV to the Companies Act, 1956 are considered as the minimum rates. If themanagement's estimate of the useful life of a fixed asset at the time of acquisition of the asset or of the remaininguseful life on a subsequent review is shorter than that envisaged in the aforesaid schedule, depreciation is provided ata higher rate based on management's estimate of the useful life / remaining useful life. Buildings taken on lease andLeasehold improvements are written off over the primary lease period. Individual assets costing less than Rs. 5,000/-are depreciated in full in the year of purchase.

1.5 Impairment:

In accordance with Accounting Standard 28 - Impairment of Assets (AS 28), as notified by the Companies (AccountingStandards) Rules, 2006 the carrying amounts of the assets including intangible assets are reviewed at each balancesheet date to determine whether there is any indication of impairment. If any such indication exists, the asset's recoverableamount is estimated, as the higher of the net selling price and the value in use. Any impairment loss is recognizedwhenever the carrying amount of an asset or its cash generating unit exceeds its recoverable amount.

1.6 Leases:

Lease payment under an operating lease is recognized as an expense in the profit and loss account on a straight linebasis over the lease term.

Assets taken on finance lease are capitalized and finance charges are charged to profit and loss account on accrualbasis.

1.7 Investments:

Long term investments are carried at cost less any diminution in value, other than temporary, determined separately ofeach individual investment.

1.8 Long Term Deposits:

Deposit amounts paid for acquiring management and other rights of enduring nature in the hotel and other propertiesowned by other parties for period exceeding ten years are classified as long term deposits.

1.9 Inventories:

Inventories are valued at lower of cost (weighted average basis) and net realizable value.

1.10 Revenue Recognition:

Revenues are derived primarily from hospitality services. Revenue on time and material contracts are recognized asthe related services are performed. Revenue from fixed price contracts are recognized using the percentage completionmethod. Revenue yet to be billed is recognized as unbilled revenue. Amounts received on long term contracts are

SCHEDULE "N" FORMING PART OF THE CONSOLIDATED ACCOUNTSFOR THE YEAR ENDED 31ST MARCH, 2008 (Contd...)


75

represented as advance billing and is recognized proportionately over the period of the contract. Reimbursement towardsexpenses incurred for providing services are included in the revenue and related expenses are shown separately.

Sales and services are stated exclusive of taxes.

Interest income is recognized using the time proportion method based on the underlying interest rates. Dividends arerecorded when the right to receive payment is established.

1.11 Export Benefits Entitlement :

Export Benefits in the nature of Duty Credit Scrips are recognised in Profit and Loss account upon the actual utilisationof Duty Credit Scrips.

1.12 Foreign exchange transactions:

Transactions in foreign currencies are recorded at the exchange rates prevailing at the date of the transactions. Exchangedifferences arising on foreign currency transactions settled during the year are recognized in the profit and loss accountof the year.

Monetary assets and liabilities denominated in foreign currency at the balance sheet date are translated at the yearend exchange rate and the resultant exchange differences are recognized in the profit and loss account except thoserelated to acquisition of imported fixed assets which are adjusted in the carrying amount of the related fixed assets.

1.13 Borrowing costs:

Borrowing costs that are directly attributable to the acquisition or construction of qualifying assets are capitalised aspart of the cost of such assets. However, capitalization of such costs is suspended during extended periods in whichactive development of qualifying asset is interrupted. A qualifying asset is one that necessarily takes substantial periodof time to get ready for intended use. All other borrowing costs are recognized in the profit and loss account. Interestincome earned from temporary deposits out of borrowed money pending deployment of funds to the full extent or untilqualifying assets is ready, is reduced from borrowing costs capitalized.

1.14 Provisions and contingent liabilities:

Provision is created where there is a present obligation as a result of a past event that probably requires an outflow ofresources and a reliable estimate can be made of the amount of obligation. A disclosure for a contingent liability ismade when there is a possible obligation or a present obligation that may, but probably will not require an outflow ofresources. When there is a possible obligation in respect of which likelihood of outflow of resources is remote, noprovision or disclosure is made.

1.15 Employee benefits:

Contribution to provident fund, which is a defined contribution scheme, is recognized as an expense in the profit andloss account in the year in which the contribution is made.

Provision for leave encashment is determined on the basis of actuarial valuation carried out by an independent actuaryat the balance sheet date.

Contribution to a Group Gratuity Scheme is administered by the Life Insurance Corporation of India. The Contributionsare charged to the profit and loss account. Provision is made for the difference between the actuarial valuation(determined as at the balance sheet date) and the funded balance on basis of Projected Unit Credit method carriedout annually. Actuarial gains and losses are immediately recognised in the Profit and Loss Account.

1.16 Taxation:

Tax expense comprises of current, deferred and fringe benefit tax. Current income tax and fringe benefit tax is measuredat the amount expected to be paid to the tax authorities in accordance with the Income Tax Act, 1961. Deferred incometaxes reflect the impact of current period timing differences between taxable income and accounting income for theyear and reversal of timing differences of earlier years. Deferred tax is measured based on the tax rates and the taxlaws enacted or substantively enacted at the balance sheet date. Deferred tax assets are recognised only to the extent



76

that there is reasonable certainty that sufficient future taxable income will be available against which such deferred taxassets can be realised. Deferred tax assets are recognised on carry forward of unabsorbed depreciation and tax lossesonly if there is virtual certainty that such deferred tax assets can be realized against future taxable profits. Unrecogniseddeferred tax assets of earlier years are re-assessed and recognised to the extent that it has become reasonably certainthat future taxable income will be available against which such deferred tax assets can be realised.


Prior period adjustments, extraordinary items and changes in accounting policies having material impact on the financialaffairs of the Company are disclosed.

1.18 Earnings per Share:

Basic earnings per share are calculated by dividing the net profit or loss for the year attributable to equity shareholdersby the weighted average number of equity shares outstanding during the year. Partly paid equity shares are treated asa fraction of an equity share to the extent that they were entitled to participate in dividends relative to a fully paid equityshare during the reporting year. The weighted average number of equity shares outstanding during the year are adjustedfor events of bonus issue; bonus element in a rights issue to existing shareholders; share split; and reverse sharesplit (consolidation of shares). For the purpose of calculating diluted earnings per share, the net profit or loss for theyear attributable to equity shareholders and the weighted average number of shares outstanding during the year areadjusted for the effects of all dilutive potential equity shares.

2. Notes on Accounts :

2.1 Previous year comparatives:

Concept Hospitality Limited became the subsidiary of the Company during the year. This being the first year, comparativefigures for the previous year are not given in accordance with the transitional provisions of AS-21.

2.2 Contingent liabilities:

(a) Estimated amount of capital commitments to be executed on capital account and not provided for Rs. 943.93lakhs (Net of advances).

(b) Disputed Income Tax Demand Rs.3.43 lakhs.

(c) Open import licenses Rs. 179.36 lakhs.

(d) Joint Corporate guarantee to a bank in respect of credit facilities availed by Joint venture company, liability restrictedto Rs. 3,666.67 lakhs.

(e) Counter Guarantees issued by the Company to secure Bank Guarantees Rs. 40.72 lakhs.

(f) Differential Interest payable on FCCBs on the basis of Yield To Maturity of 8.80% per annum, in the event of non-conversion of Bonds into equity Rs. 289.90 lakhs.

(g) Other matters Rs. 260.02 lakhs.

2.3 The Company has made provision for property tax at Rs. 249.92 lakhs based on bills raised by the Mumbai MunicipalCorporation on the basis of assessment of ratable value of the Company's Hotels at Vile Parle and Andheri. The Companyhas disputed the assessment of the said ratable value by filing appeals, which are pending before an appropriateCourt. Adjustments, if any, will be made on disposal of appeals.


(a) Extra-ordinary item for the year represents Luxury tax assessment dues of Rs. 171.61 lakhs for the period fromMay 2004 to March 2005 paid on disposal of Luxury Tax appeal vide appallate order dated 12th December 2007.

(b) Prior periods adjustments: In respect of time share operations, revenue out of the total membership fees due isrecognized in the year of membership to the extent of cost attributable to market such membership and balancemembership fees is recognized equally over the membership period. In the past, out of the total direct expenses



77

incurred on marketing the time share scheme, the management had considered a part of such expensesattributable to the first year' income and balance such expenses were netted off against the advance membershipfees, which has been shown under Liabilities. The Company has now been advised that the entire expensesshould be charged to revenue in the very first year. Accordingly the balance of such expenses amounting to Rs.753.04 lakhs incurred upto 31st March, 2007 has been charged to revenue this year and a corresponding creditof equivalent amount out of the advance membership fees has been taken against the same to reflect the grossadvance membership fees, which will be recognized as income equally over the balance membership period.The impact of the above adjustment on the year's profitability and the income-tax liability is neutral.

(c) Hitherto Company was providing depreciation on improvements to hotel buildings taken under Long Term contractsat the rates prescribed in Schedule XIV to the Companies Act, 1956. The management has reviewed the sameand decided to change the method of calculating depreciation on the cost of improvement to the hotel buildingstaken on long term basis by writing off such cost over the primary lease period on straight line method from thedate of the asset coming into use. Accordingly shortfall in depreciation of Rs. 120.79 lakhs (including Rs. 89.94lakhs for the period upto 31.03.2007) has been provided during the year and included in the Depreciation for theyear. Had the Company followed the old method, the depreciation charge for the year would have been lower byRs.120.79 lakhs and consequently the profit for the year would have been more by the said amount.

2.5 Segment Reporting:

The activities of the Company and its subsidiary involve predominantly providing hospitality related services, which isconsidered to be a single business segment since these are subject to similar risks and returns. Further, services arenot provided out of India and hence there are no reportable geographical segments. Accordingly, the financial statementsare reflective of the information required by Accounting Standard 17 - Segment Reporting as notified by the Companies(Accounting Standards) Rules, 2006.

2.6 Related Party Disclosures:

Related Parties where control exists:

(a) Associates:

Plaza Hotels Private LimitedKamats Development Private LimitedKamat Holiday Resorts Private LimitedKamat Holiday Resorts (Silvassa) Private LimitedVishal Amusements LimitedTalent Hotels Private LimitedIndira Investments Private LimitedKamat Concept Hospitality Private LimitedBW Highway Star Private Limited (Joint Venture)Concept Hospitality Limited (Upto 2nd December, 2007)Kamat Amusements Private Limited

(b) Key Management Personnel -Mr. Vithal V. Kamat - Executive Chairman & Managing DirectorMr. K. P. Kannampilly - Wholetime Technical Director (Upto 31.10.2007) in the Company and

Chairman & Managing Director (w.e.f.1.11.2007) in the Subsidiary.Mr. Ramesh N. Shanbhag - Wholetime DirectorMr. Vishal V. Kamat - Executive Director & also relative

(c) Other related parties with whom transactions have taken place during the year:V. V. Kamat HUFKamats Klub, Lokhandwala (Prop. Mr. Vithal V. Kamat)Sportsfield Amusements



78

(d) Summary of transactions during the year with Related Parties entered into on commercial basis in the interest ofthe Company and approved by the Board and status of outstanding balances as on31st March, 2008:

Sr. Nature of transactions Associates Key Management OtherNo. Personnel & related parties

relatives *1 Gross Sale of services including Nil Nil 4.22

Management & Consultancy Fees

2 Purchase of goods & services 4.84 25.60 Ni

3 Consultancy Fees/Fees paid towards 96.27 Nil Nilhotel property under ManagementAgreement

4 Reimbursement of contractual remuneration 102.65 Nil Nilof personnel deputed to Company.

5 Rent paid incl. Reimbursement of expenses 22.64 0.01 3.00

6 Reimbursement received towards 104.22 Nil Nilexpenses incurred

7 Interest received / earned 7.77 Nil Nil8 Interest paid 75.54 Nil 51.249 Dividend paid 220.47 56.89 3.4710 Security Deposit given / refunded 57.01 16.00 Nil11 Advances given on Capital/Current Account 30.00 Nil Nil12 Inter Corporate Deposit Taken /Refunded 1,000.00 Nil Nil13 Investments in Shares 1,000.00 Nil Nil

14 Balance outstanding at the year end:

a) Investment in shares 1,350.50 Nil Nilb) Secured Non-convertible Redeemable

Debentures 466.95 Nil 427.00c) Accounts receivable 9.89 Nil 10.44d) Deposit paid incl. Under Management

Contract 8,005.00 Nil 50.00e) Amounts Payable 27.42 0.01 29.22

15 Corporate Guarantee issued by theCompany in favour of a bank on behalf ofjoint venture company 3,666.67 Nil Nil

16 Corporate Guarantee / PersonalGuarantee provided by Plaza HotelsPrivate Limited /Indira Investments Pvt.Ltd/ Executive Chairman & Managing Director 19,807.93 17,971.93 Nil

* Relatives of Key Management Personnel: Mrs. Vidya V. Kamat, Mr. Vikram Kamat and Ms. Vidita Kamat (wife andchildren respectively of Mr. Vithal V. Kamat), Mrs. Sharda S. Kamat (sister of Mr. Vithal V. Kamat) and Mrs. SabrinaKannampilly, Mr. Suhail Kannampilly, Ms. Nandita Kannampilly, Mr. Karun Kannampilly (wife and children respectivelyof Mr. K.P. Kannampilly), Mrs. Maya Shanbhag (wife of Mr. Rameh N. Shanbhag).


(Rs. in Lakhs)


79

2.7 Leases:

The Company's significant leasing arrangements are in respect of operating leases for premises. These leasingarrangements, which are not non-cancellable, range between 11 months and 9 years generally or longer and are usuallyrenewable by mutual consent on mutually agreeable terms. The aggregate lease rentals payable are charged as rentand aggregate Licence fees Income for shops is shown as Licence Fees.

Future commitments in respect of minimum lease payments payable for non-cancellable operating leases (other thanland) entered into by the Company:


Payable within one year - 143.16

Payable later than one year but not later than five years - 614.45

Payable after five years - 2,787.22

The Company also has finance leasing arrangements in respect of vehicles. Future commitments in respect ofminimum installments payable under Finance schemes:


Minimum Installments:Payable within one year - 24.43Payable later than one year but not later than five years - 16.80Present value of Minimum installments:Payable within one year - 21.92Payable later than one year but not later than five years - 13.55

The Company also has given the shops on leave & license basis in respect of which future minimum license feesreceipts expected:


Receivable within one year - 47.67Receivable later than one year but not later than five years - 17.21Receivable after five years - Nil

2.8 Earnings per share:Basic & Diluted:Particulars Current Year

(Rs. in Lakhs)Profit after tax as per Accounts:Before Extraordinary items 2,912.28After Extraordinary Items 2,791.39No. of Shares issued 1,31,97,395Nominal Value of Share (Rs.) 10.00Weighted average no. of shares - Basic 1,31,97,395Basic E.P.S. (Rs.) :Before Extraordinary items 22.07After Extraordinary items 21.15Weighted average no. of shares - diluted 1,67,34,995Diluted E.P.S. (Rs.):Before Extraordinary items 17.40After Extraordinary items 16.68



80

2.9 Deferred Tax:Major Components of Deferred Tax Assets and Deferred Tax Liabilities:Particulars Current Year

(Rs. in Lakhs)

Deferred tax liabilities

Difference in depreciation. 2,577.83

Expenditure claimed as revenue under the Income Tax Act, Nil1961 but treated as deferred revenue expenditure in the books.

Total 2,577.83


Deferred tax assetsExpenses allowable for tax purpose on payment basis 232.62Unabsorbed Depreciation / Business Loss NilProvision for doubtful debts / contingencies 9.42

Total 242.04

Deferred Tax Asset / (Liability) (net) 2,335.79

2.10 Employee Benefits:The disclosures required under Accounting Standard 15 "Employee Benefits" notified in the Companies (AccountingStandards) Rules 2006, are given below:

Defined Contribution PlanContribution to Defined Contribution Plan, recognized and charged off for the year are as under:


Employer's Contribution to Provident Fund 46.21Employer's Contribution to Pension Scheme 41.40

Defined Benefit Plan

The employees' gratuity fund scheme in case of the Company managed by Life Insurance Corporation of India is adefined benefit plan. The present value of obligation is determined based on actuarial valuation using the ProjectedUnit Credit Method, which recognises each period of service as giving rise to additional unit of employee benefitentitlement and measures each unit separately to build up the final obligation. The obligations for leave encashment isrecognized in the same manner as gratuity. In case of Subsidiary, employee's gratuity is unfunded:

Gratuity (Funded):


a. Reconciliation of opening and closing balances ofDefined Benefit obligationDefined Benefit obligation at beginning of the year 81.15Current Service Cost 14.02Interest Cost 1.55Actuarial (gain) / loss 15.08Benefits paid (12.13)Defined Benefit obligation at year end 99.67



81

b. Reconciliation of opening and closing balances of fair value of plan assetsFair value of plan assets at beginning of the year 71.74Expected return on plan assets 6.36Employer contribution 0.66Benefits Paid (12.13)Actuarial gain/(loss) 2.39Fair value of plan assets at year end 69.02

Actual return on plan assets 6.36

Current YearParticulars (Rs. in Lakhs)

c. Reconciliation of fair value of assets and obligationsFair value of plan assets as at 31st March, 2008 69.02Present value of obligation as at 31st March, 2008 99.67Amount recognised in Balance Sheet 30.65

d. Net Gratuity and other cost for the yearCurrent Service Cost 14.02Interest Cost 1.55Expected return on plan assets (6.36)Actuarial (gain) / loss 15.08Net Cost 24.29

e. Investment Details % invested

L.I.C. Group Gratuity (Cash Accumulation) Policy 100

f. Actuarial assumptionsMortality Table (L.I.C.) 1994-96 (Ultimate)Discount rate (per annum) 8.00%Expected rate of return on plan assets (per annum) 9.15%Rate of escalation in salary (per annum) 5.00%

Gratuity (Non-Funded):

Current YearParticulars (Rs. in Lakhs)

a. Reconciliation of opening and closing balances ofDefined Benefit obligationDefined Benefit obligation at beginning of the year 21.60Current Service Cost 5.03Actuarial (gain) / loss 6.44Excess Provision written back 10.13Defined Benefit obligation at year end 11.47


c. Expenses recognized during the yearCurrent Service Cost 5.03Actuarial (gain) / loss 6.44Net Cost 11.47Opening Balance (21.60)Excess Provision written back 10.13



82

Leave Encashment (Non-Funded):Current Year

Particulars (Rs. in Lakhs)a. Reconciliation of opening and closing balances of Defined Benefit obligation

Defined Benefit obligation at beginning of the year 102.74Actuarial (gain) / loss 67.42Defined Benefit obligation at year end 170.16


c. Expenses recognized during the yearActuarial (gain) / loss 67.42Net Cost 67.42

The estimated of rate of escalation in salary considered in actuarial valuation, take into account inflation, seniority,promotion and other relevant factors including supply and demand in the employment market. The above informationis certified by the actuary.

2.11 Income TaxIn accordance with guidance note issued by ICAI, the Company had accounted for MAT Credit Entitlement of Rs. 479.10lakhs in the previous year which consists of MAT paid of Rs.143.53 lakhs and Rs. 335.57 lakhs for the financial years2005-06 and 2006-07 respectively. The said credit has been fully adjusted during the current year against the currentyear's tax liability.

2.12 Miscellaneous Income of Rs.235.71 lakhs includes Duty Free entitlement credit of Rs.138.82 lakhs for the period from2004-05 to 2007-08 on capital account.

2.13 The Proportionate share of assets, liabilities, income and expenditure in the Jointly Controlled Entity included in theseConsolidated Financial Statements are given below:Name of the Jointly Controlled Entity : Forbes Concept Hospitality Services Pvt. Ltd.Percentage of Interest : 50%

Current Year(Rs. in Lakhs)

ASSETSFixed Assets (Net Block) 63.91Current Assets, Loans and Advances 60.90Miscellaneous Expenditure 4.94LIABILITIESReserves and Surplus (29.95)Secured Loan 14.47Unsecured Loans 51.08Current Liabilities and Provisions 116.94INCOMERestaurant Food Sales and other income 122.21EXPENSESOperating and General Expenses 148.44Depreciation 4.72Interest 3.03




G. N. Shenoy Mahesh KandoiChief Financial Officer Company Secretary




83

STATEMENT PURSUANT TO SECTION 212 OF THE COMPANIES ACT, 1956,RELATING TO COMPANY’S INTEREST IN SUBSIDIARY COMPANY.

Sr. No. Particulars

1. Name of the Subsidiary Company Concept Hospitality Ltd.

2. The Financial year of the subsidiary 31-3-2008Company ended

3. Date of which it became subsidiary 3-12-2007

4.a. Number of shares held by Kamat Hotels 4,80,000 equity shares Rs. 10/- each(India) Ltd in the subsidiary Company atthe end of financial year of subsidiary Company.

4 b. Extent of interest of holding Company at 60%the end of the financial year of thesubsidiary company.

5. The net aggregate amount of thesubsidiary company profit / (loss) so faras it concerns the members of theholding Company:-

5. a Not dealt with in the holding company’saccounts :

5.a.1. For the financial year 31st March, 2008 Rs. 64,37,619/-

5.a.2. For the previous financial years of the N.A.subsidiary company since it becamethe holding Company’s subsidiary.

5.b. Dealt with in the holding Company’saccounts :

5.b.1. For the financial year ended 31st March, 2008 NIL

5.b.2. For the previous financial years of the N.A.subsidiary company since it becomethe holding company’s subsidiary.







84

Disclosures as required vide Order passed by the Central Government under Section 212(8) of the CompaniesAct, 1956 vide letter No.47/395/2008-CL-III dated 19th June, 2008 in respect of Company's Subsidiaryi.e. Concept Hospitality Ltd. (Refer Page 9 of Directors’ Report)

(Rs. in Lakhs)

Name of the subsidiary company Concept Hospitality Limited

a) Capital 80.00

b) Reserves 277.89

c) Total Assets 370.17

d) Total Liabilities 370.17

e) Details of investment (except in case of investment in the subsidiary) 50.00

f) Turnover 1,606.08

g) Profit before taxation 403.30

h) Provision for taxation 150.63

i) Profit after tax 252.68

j) Proposed dividend 60.00





Mumbai: 26th July, 2008


85

NOTES


86

NOTES


87

KAMAT HOTELS (INDIA) LIMITEDRegistered Office: 70-C, Nehru Road, Near Santacruz Airport,

Vile Parle (East), Mumbai - 400 099

ATTENDANCE SLIP

DP Id*

Client Id**

Master Folio No.

No. of Share(s) held

I hereby record my presence at the Twenty-First Annual General Meeting of the Company to be held at “ShubhamHall”, Landmark Bldg., Opp. Vile Parle Railway Station, Junction of Besant Road and V. P. Road, Vile Parle (West)Mumbai - 400 056 on Saturday, the 30th August, 2008 at 3.00 p.m.

NAME OF SHAREHOLDER/PROXY* .................................................................................................................

SIGNATURE OF SHAREHOLDER/PROXY* ........................................................................................................

* Strike out whichever is not applicable** Applicable for investors holding shares in electronic formNote: Shareholder / Proxy holder wishing to attend the Meeting must bring the Attendance Slip to the Meeting and

hand it over at the entrance of the Meeting venue duly signed.

KAMAT HOTELS (INDIA) LIMITEDRegistered Office: 70-C, Nehru Road, Near Santacruz Airport,

Vile Parle (East), Mumbai - 400 099

DP Id*

Client Id**

Master Folio No.

No. of Share(s) held

I/We .............................................................................of ...............................................................................being a Membe/Members of the above named Company hereby appoint ............................................................ of........................................................................... or failing him/her................................................................ of.......................................................................... or failing him/her................................................................. of........................................................................ as my / our proxy to attend and vote for me / us on my / ourbehalf at the Twennty-First Annual General Meeting of the Company to be held at “Shubham Hall”, Landmark Bldg.,Opp. Vile Parle Railway Station, Junction of Besant Road and V. P. Road, Vile Parle (West), Mumbai - 400 056on Saturday, the 30th August, 2008 at 3.00 p.m. and at any adjournment thereof.

Signed this ..................... day of .................................. 2008

** Applicable for investors holding shares in electronic form.

Note: The proxy form must be deposited at the Registered Office of the Company not less than 48 hours before theCommencement of the Meeting.

Please affixRe.1 RevenueStamp here

Signataure

PROXY FORM


88

Total Turnover

8234.08

11282.79

15267.11

0

2000

4000

6000

8000

10000

12000

14000

16000

18000

2005-06 2006-07 2007-08Financial Year

Rs.

in la

cs

Net Profit (after tax)

1557.91

2733.05

0

500

1000

1500

2000

2500

3000

3500

4000

2005-06 2006-07 2007-08

Financial year

Rs.

in la

cs

Gross Operating Profit (G.O.P.)

2376.74

5531.72

3802.56

0

1000

2000

3000

4000

5000

6000

2005-06 2006-07 2007-08

Financial Year

Rs.

in la

cs 2058.20

back inside cover page

If undelivered please return to

KAMAT HOTELS (INDIA) LIMITEDRegd. Off. : 70-C, Nehru Road, Vile Parle (East), Mumbai - 400 099. Tel.: 2616 4000, Fax.: 2616 4201.

Prin

ted

by

Orie

nt P

ress

Ltd

. 4

02

8 5

88

8Book Post

KAMAT HOTELS (INDIA) LIMITED · 2020. 5. 1. · KAMAT HOTELS (INDIA) LIMITED Regd. Off. : 70-C, Nehru Road, Vile Parle (East), Mumbai - 400 099. Tel.: 2616 4000, Fax.: 2616 4201.

Documents