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Directors Report of U G Hotels & Resorts Ltd.

Mar 31, 2012

TO THE MEMBERS

The Directors have pleasure in presenting their Twenty Sixth Annual Report together with the Audited Financial Statement of the Company for the Financial Year ended 31st March 2012.

FINANCIAL RESULTS:

The financial results for the year ended 31st March 2012 are given below:

(Rs. In lacs)

Particulars Year ended Year ended 31.03.2012 31.3.2011

Total Income 168.10 244.69

PBDIT (30.38) 5.43

Interest 2.97 5.34

Depreciation 65.19 65.31

Profit/(Loss) Before Tax (98.54) (65.23)

Exceptional items 221.40 -

Profit/(Loss) before taxation (319.94) (65.23)

Tax Expense - -

Profit/(Loss) before taxation (319.94) (65.23)

Balance carried forward to B/S (1570.49) (1250.55)

DIVIDEND

In view of loss incurred by the company during the year under review, your Directors are unable to recommend any dividend for the year ended 31st March 2012.

BUSINESS

Company''s total income has been decreased from Rs. 244.69 lacs to Rs. 168.10 lacs. The main reason for lower income was due to not being able to undertake major up gradation of the Hotel facilities due to financial constraints, low rate of Occupancy due to heavy rain in peak season and avoiding conferences at low rate.

CORPORATE GOVERNANCE

The Company is committed to the application of best Management Practices, compliance with law, adherence to ethical standard. The Company has in all spheres of its activities adequate checks and balance to ensure protection of interest of all stakeholders. M/s Balika Sharma & Associates, Practicing Company Secretaries has examined company''s compliance and have certified the same as required under the SEBI Guidelines. The said certificate, appearing as annexure, forms part of this report. A separate Management Discussion & Analysis Report, covering a wide range of issues relating to performance & business prospects is given as annexure to this report.

FIXED DEPOSIT

The company has not invited or accepted any fixed deposit from the public pursuant to Section 58A of the Companies Act, 1956 during the year under review.

SUBSIDIARY COMPANY:

The Ministry of Corporate Affairs vide their letter no. 5/12/2007-CL-III dated February 8, 2011, has granted a general exemption under Section 212(8) of the Companies Act, 1956, for publication of the accounts of subsidiary companies, subject to fulfillment of certain conditions. In view of the same, your Company is also exempted from publication of the accounts of its subsidiaries under the provision of Section 212 of the Companies Act, 1956. The accounts of the subsidiary companies are not separately included in the Annual Report. However, the consoli- dated Financial Statements of the Subsidiary, in accordance with rel- evant Accounting Standards of the Institute of Chartered Accountants of India, duly audited by the Statutory Auditors, forms part of the Annual Report and are reflected in the consolidated accounts.

The Financial Statements of the Subsidiary Company are available to the investors seeking such information at any point of time. The Annual accounts of the subsidiary companies will also be available at the Registered Office of the Company.

DIRECTORS

In accordance with the provisions of the Companies Act, 1956 and article of Association of the Company, Ms. Saroj Sharma, Director of the Company retire by rotation at the ensuing Annual General Meeting and offer herself for re-appointment. The Board of Directors are of the opinion that their continued association with the Company will be beneficial to the Board and recommends their re-appointment.

DISPUTE & COMPROMISE WITH M/S UMAK INVESTMENT COMPANY PRIVATE LIMITED

Your Company had taken loan from M/s UMAK investment Company Private Limited for the purpose of repayment of amount of one time settlement to IFCI & TFCI Limited. Further the entire loan along with the upto date interest thereon has been settled by way of sale/transfer of 814930 no. of equity shares of the promoters, their relatives, friends and associates @ Rs 151/- per share. In addition to the above loan to the company M/s Umak Investment Company Pvt. Ltd has also advanced Rs. 3.256 Crore to Promoters Directors of the company in their personal capacity, the same has also been paid and settled along with up-to-date interest thereon by the Promoters Directors by way of sale/ Transfer of 217470 no. of equity shares @ Rs. 151/- per share as per the Memorandum of Understanding dated 15th March,2007 between M/s UMAK Investment Company Private Limited, Promoters Directors and the Company. Thereafter, with regard to repayment of above said loans, a dispute had arisen between the company and M/s Umak Investment Company Pvt. Ltd. The matter is still pending with Hon''ble Delhi High Court.

Thereafter, M/s Umak Investment Company Pvt. Limited along with Mr. AAkash Bajaj has filed petition under section 397/398 of the Companies Act, 1956, before the Hon''ble Company Law Board. After some hearing, both the parties had submitted their compromise offer before the Hon''ble Company Law Board. Hon''ble Company Law Board in their hearing held on 20th day of July, 2009 had settled the dispute between M/s Umak Investment Company Pvt. Limited, the Company and its promoter Directors. As per the order of Company Law Board, both the parties shall withdraw their legal cases pending before the various courts/ forums also reverse the adjustment entries as above explained. Subsequent to the order of Hon''ble Company Law Board, the accounting entries passed in Financial Year 2007-08 with regard to adjustment of loan of M/s Umak Investment Company Pvt. Limited have been reversed by the Board of directors of the company in their meeting held on 27th July 2009. Both the parties are in process for withdrawing their legal cases pending before various courts/forums.

AUDITORS

The Statutory Auditors of the Company M/s. Sharma Goel & Company retire at the ensuring Annual General Meeting and offer themselves for re-appointment. The Auditors have furnished a certificate that their re- appointment would be within the limits prescribed under Section 224(1B) of Companies Act, 1956.

ACCOUNTS AND AUDIT REPORT:

The Notes to Accounts referred to in the Auditors'' Report are self explanatory and, therefore, do not call for any further comments. However, in respect of dispute & compromise with M/S Umak Investment Company Private Limited, the Board of Directors wishes to explain as under:- Company had taken loan from M/S UMAK Investment Company Private Limited for the purpose of repayment of amount of one time settlement to IFCI & TFCI Limited. Further, the entire loan along with the upto date interest thereon has been settled by way of sale/transfer of 8,14,930 no. of equity shares of the promoters, their relatives, friends and associates @Rs 151/- per share. In addition to the above loan to the company M/s Umak Investment Company Pvt. Ltd has also advanced Rs. 3.256 Crore to Promoters Directors of the company in their personal capacity, the same has also been paid and settled along with up-to-date interest thereon by the Promoters Directors by way of sale/ Transfer of 2,17,470 no. of equity shares @ Rs. 151/- per share as per the memorandum of Understanding dated 15th March, 2007 between M/s UMAK Investment Company Private Limited, Promoters Directors and the Company. Thereafter, with regard to repayment of above said loans, a dispute had been arisen between the company and M/s Umak Investment Company Pvt. Ltd.

Thereafter, M/s Umak Investment Company Pvt. Limited along with Mr. AAkash Bajaj has filed petition under section 397/398 of the Companies Act, 1956, before the Hon''ble Company Law Board. After some hearing, both the parties had submitted their compromise offer before the Hon''ble Company Law Board. Hon''ble Company Law Board in their hearing held on 20th day of July, 2009 had settled the dispute between M/s Umak Investment Company Pvt. Limited, the Company and its promoter Directors. As per the order of CLB, both the parties shall withdraw their legal cases pending before the various courts/forums and also reverse the adjustment entries as above explained. Subsequent to the Order of Hon''ble Company Law Board, the accounting entries passed in Financial Year 2007-2008 with regard to adjustment of loan of M/s Umak Investment Company Pvt. Limited have been reversed by the Board of Director of the company in their meeting held on 27th July, 2009. A sum of Rs. 50 lacs (i.e. Rs. 30 lacs paid by company, Rs. 10 lacs paid by promoter directors and Rs. 10 lacs by other) has been paid to M/s Umak Investment Company Pvt. Limited. The company is also in process for withdrawing the legal cases pending before the various courts/forums. As on date, company as well as its promoters director have complied the Hon''ble Company Law Board order. In view of the above, your directors are of the opinion that the Balance Sheet now presents a complete true and fair picture. In respect of nonpayment of employer''s/employees contribution to provident fund, Service tax, luxury tax and Vat amounting to Rs. 3.13 lacs, Rs. 3.19 lacs, Rs. 3.87 lacs, Rs. 8.14 lacs and Rs. 3.02 lacs respectively was due to financial crunch; however the same shall be paid shortly. All dues in respect of Car loans have been delayed paid, due to financial crunch. The Company has adequate Internal Control System commensurate with its size and business. Company has not received declaration from Mr. Harmeet Ghai under Section 274(1)(g) of the Companies Act, 1956.

LISTING OF SHARES

Your Company''s shares are listed and traded at Bombay Stock Exchange, Delhi Stock Exchange and Ludhiana Stock Exchange. The Company has paid upto date listing fees to all Stock Exchanges.

PARTICULARS OF EMPLOYEES

There was no employee who was in receipt of remuneration over & above the limits prescribed under Section 217(2A) of the Companies Act, 1956 as such no statement is furnished under the said Section.

DIRECTOR''S RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 217 (2AA) of the Companies Act, 1956 the Directors confirm that:

a) In the preparation of the Annual Accounts for the Financial Year ended 31st March 2012the applicable accounting standards have been followed along with proper explanations relating to material departures;

b) The directors have selected appropriate accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March,2012 and of the Statement of Profit & Loss of the company for the said period.

c) Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities; and

d) The Directors have prepared the accounts for the Financial Year ended 31st March 2012 on a going concern basis.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO:

Pursuant to Section 217(1) (e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988, (as amended) a statement giving the required information relating to energy conservation, technology absorption, foreign exchange earnings and outgo is as under:

a) FOREIGN EXCHANGE EARNINGS:

Conservation of Energy, Technology Absorption, Foreign Exchange / out go.

Foreign Exchange Earning NIL

Foreign Exchange Outgo NIL

b) RESEARCH & DEVELOPMENTS: NIL

c) TECHNOLOGY ABSORPTION, ADAPTION & INNOVATION:

NIL

1. Efforts in brief made towards technology absorption, adaptation & innovation : NIL

2. Benefits derived as a result of above efforts : Does not arise

3. In case of Imported Technology : N.A.

d) CONSERVATION OF ENERGY: Particulars relating to conservation of energy pursuant to Section 217(1) (e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 is not applicable to the company. However, electricity consumed during the Financial Year is as under:

ACKNOWLEDGEMENTS

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

By order of the Board of Directors

Place: New Delhi Umesh Phalpher

Date: 1st September, 2012 Chairman


Mar 31, 2010

The Directors have pleasure in presenting their Twenty Forth Annual Report together with the Audited statement of Accounts of the Company for the financial year ended 31s1 March 2010.

FINANCIAL RESULTS

The financial results for the year ended 31st March 2010 are given below:

(Rs. In Lacs)

Year ended Year ended

31.03.2010 31.03.2009

Total Income 245.98 232.48

PBDIT 41.80 29.41

Interest 6.59 6.31

Depreciation 71.39 72.36

Loss for the year (36.18) (49.26)

Extraordinary items - (30.38)

Profit/(Loss) Before Tax & After (36.18) (79.64)

Extraordinary items

Provision of Taxation (0.14) 1.78

Profit/(Loss) After taxation (36.04) (81.42)

Balance carried forward to B/S (1185.32) (1149.28)

PBDIT/Total lncome-% 16.99 12.65

DIVIDEND

In view of loss incurred by the company during the year under review, your directors are unable to recommend any dividend for the year ended 31s t March 2010.

BUSINESS

During the year under review, the companys total income has been marginally increased from Rs. 232.48 lacs to 245.98 lacs, and Profit before depreciation, interest and tax has also been increased from Rs.29.41 lacs to Rs. 41.80 lacs, despite not being able to undertake major up gradation of the hotel facilities due to financial crunch.

FUTURE PROSPECTS

The Indian economy is recovering slowly and Sequel to the Govern- ment of Indias Programme for achieving 9% GDP growth during current fiscal year domestic tourism market offer huge growth and development potential. Large chunk of guest arrivals in your Companys resort is from neighbouring states, which have predominantly agricul- ture- based economy. With near normal monsoon during current ses- sion, giving a much needed boost to the farm economy. The increase in disposable income of the rural economy will boost the domestic tourism market.

CORPORATE GOVERNANCE

The Company believes that Corporate Governance is a way of life than something to be carried out under legal compulsion. The Com- pany is committed to the application of best Management Practices, compliance with law, adherence to ethical standard. The Company has in all spheres of its activities adequate checks and balartce to ensure protection of interest of all stakeholders. A separate report on Corporate Governance is attached as Annexure to the Annual Report. M/s Balika Sharma & Associates, Practicing Company Secretaries

confirming compliance of conditions of Corporate Governance is in- cluded in the said Corporate Governance Report.

A separate Management Discussion & Analysis Report, covering a wide range of issues relating to performance & business prospects is given as annexure to this report.

FIXED DEPOSIT

The company has no invited or accepted any fixed deposit from the public pursuant to Section 58A of the Companies Act. 1956 during the year review.

SUBSIDIARY COMPANY:

Company has one wholly owned subsidiary company incorporated on 22nd January, 2010 and has not started its business activity.

DIRECORS

In accordance with the provisions of the Companies Act, 1956 and article of Association of the Company, Mr. Kuldeep Vats, Director of the Company retire by rotation at the ensuing Annual General Meeting and offer himself for re-appointment. The Board of Directors are of the opinion that their continued association with the Company will be beneficial to the Board and recommends their re-appointment.

DISPUTE & COMPROMISE WITH M/S UMAK INVESTMENT COMPANY PRIVATE LIMITED

Your Company had taken loan from M/s UMAK investment Company Private Limited for the purpose of repayment of amount of one time settlement to IFCI & TFCI Limited. Further the entire loan along with the upto date interest thereon has been settled by way of sale/transfer of 814930 no. of equity shares of the promoters, their relatives, friends and associates @ Rs 151/- per share. In addition to the above loan to the company M/s Umak Investment Company Pvt. Ltd has also advanced Rs. 3.256 Crore to Promoters Directors of the company in their personal capacity, the same has also been paid and settled along with up-to-date interest thereon by the Promoters Directors by way of sale/ Transfer of 217470 no. of equity shares @ Rs. 151/- per share as per the Memorandum of Understanding dated 15th March,2007 between M/s UMAK Investment Company Private Limited, Promot- ers Directors and the Company. Thereafter, with regard to repayment of above said loans, a dispute had arisen between the company and M/s Umak Investment Company Pvt. Ltd. The matter is still pending with Honble Delhi High Court.

Thereafter, M/s Umak Investment Company Pvt. Limited along with Mr. AAkash Bajaj has filed petition under section 397/398 of the Com- panies Act, 1956, before the Honble Company Law Board. After some hearing, both the parties had submitted their compromise offer before the Honble Company Law Board. Honble Company Law Board in their hearing held on 20th day of July, 2009 had settled the dispute between M/s Umak Investment Company Pvt. Limited, the Company and its promoter Directors. As per the order of CLB, both the parties shall withdraw their legal cases pending before the various courts/forums and also reverse the adjustment entries as above ex- plained.

Subsequent to the Order of Honble Company Law Board the ac- counting entries passed in financial year 2007-2008 with regard to adjustment of loan of M/s Umak Investment Company Pvt. Limited have been reversed by the Board of Director of the company in their meeting held on 27th July, 2009. Both the parties are in process for withdrawing their legal cases pending before various courts/ forums.

INSPECTION UNDER SECTION 209A OF THE COMPANIES ACT, 1956

An inspection has been carried by Regional Director (NR), Ministry of Corporate Affairs under section 209A of the Companies Act, 1956 during the year 2008. During the Inspection the Inspecting Officers had asked various documents and explanations, Company had replied their queries in due course. Subsequent to such inspection, the com- pany has received show cause notices from the office of Registrar of Companies, Punjab, H.P. & Chandigarh, Ministry of Corporate Affairs, Government of India in connection with Inspection carried by Regional Director (NR). Company had replied the show cause notices and also filed the compounding applications for the compoundable offences. Some matters are compounded by Honble Company Law Board, Northen Region and some are pending before Honble Company Law Board.

AUDITORS

The statutory auditors of the Company M/s. Sharma Goel & Com- pany retire at the ensuring Annual General Meeting and being eligible offer themselves for re-appointment

The auditors have furnished a certificate that their re-appointment would be within the limits prescribed under section 224(1B) of Compa- nies Act, 1956.

ACCOUNTS AND AUDIT REPORT:

The Notes to Accounts referred to in the Auditors Report are self explanatory and, therefore, do not call for any further comments. However, in respect of dispute & compromise with M/S Umak Invest- ment Company Private Limited, the Board of Directors wishes to explain as under:-

Company had taken loan from M/S UMAK Investment Company Private Limited for the purpose of repayment of amount of one time settlement to IFCI & TFCI Limited. Further, the entire loan along with the upto date interest thereon has been settled by way of sale/transfer of 8,14,930*no. of equity shares of the promoters, their relatives, friends and associates @Rs 151/- per share. In addition to the above loan to the company M/s Umak Investment Company Pvt. Ltd has also advanced Rs. 3.256 Crore to Promoters Directors of the com- pany in their personal capacity, the same has also been paid and settled along with up-to-date interest thereon by the Promoters Direc- tors by way of sale/ Transfer of 2,17,470 no. of equity shares @ Rs. 151/- per share as per the memorandum of Understanding dated 15th March, 2007 between M/s UMAK Investment Company Private Lim- ited, Promoters Directors and the Company. Thereafter, with regard to repayment of above said loans, a dispute had been arisen between the company and M/s Umak Investment Company Pvt. Ltd.

Thereafter, M/s Umak Investment Company Pvt. Limited along with Mr. AAkash Bajaj has filed petition under section 397/398 of the Com- panies Act, 1956, before the Honble Company Law Board. After some hearing, both the parties had submitted their compromise offer before the Honble Company Law Board. Honble Company Law Board in their hearing held on 20th day of July, 2009 had settled the dispute between M/s Umak Investment Company Pvt. Limited, the Company and its promoter Directors. As per the order of CLB, both the parties shall withdraw their legal cases pending before the various courts/forums and also reverse the adjustment entries as above ex- plained.

Subsequent to the Order of Honble Company Law Board, the accounting entries passed in Financial year 2007-2008 with regard to adjustment of loan of M/s Umak Investment Company Pvt. Limited have been reversed by the Board of Director of the company in their meeting held on 27th July, 2009. A sum of Rs. 50 lacs (i.e. Rs. 30 lacs paid by company, Rs. 10 lacs paid by promoter directors and Rs. 10 lacs by other) has been paid to M/s Umak Investment Company Pvt. Limited. The company is also in process for withdrawing the legal cases pending before the various courts/forums. As on date, company as well as its promoters director have complied the Honble Company Law Board order.

However, in respect of non payment of provident fund (Rs.39,366/-) the same shall be paid up on or before ensuing Annual General Meeting. Company has adequate Internal Control System commensurate with its size and business. In view of the above, your directors are of the opinion that the Balance Sheet now presents a complete true and fair picture. LISTING OF SHARES

Your Companys share are listed and traded at Bombay Stock Ex- change Limited, Delhi Stock Exchange Limited and Ludhiana Stock Exchange Limited. The Company has paid up to date listing fees to all stock Exchanges. PARTICULARS OF EMPLOYEES

There was no employee who was in receipt of remuneration over & above the limits prescribed under Section 217(2A) of the Companies Act, 1956 as such no statement is furnished under the said Section. DIRECTORS RESPONSIBILITY STATEMENT: Pursuant to Section 217 (2AA) of the Companies Act, 1956, the Direc- tors of your Company declare as under: (i) That in the preparation of the Annual Accounts for the financial year ended 31s March, 2010, the applicable Accounting Stan- dards had been followed along with proper explanation relating to material departures. (ii) That the Company has selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company as at 31s March, 2010 and of the Profit or Loss of the company for the said period. (iii) That proper and sufficient care has been taken for the mainte- nance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities. (iv) That the annual accounts for the financial year ended 31s" March,

2010 are prepared on a going concern basis. ENERGY CONSERVATION, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO: Pursuant to Section 217(1) (e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988, (as amended) a statement giving the required information relating to energy conservation, technology absorption, foreign exchange earnings and outgo is as under:

A) FOREIGN EXCHANGE EARNINGS:

Conservation of Energy, Technology Absorption, Foreign Exchange/ out go.

Foreign Exchange Earning NIL

Foreign Exchange Outgo NIL

B) RESEARCH & DEVELOPMENTS: NIL

C) TECHNOLOGY ABSORPTION, ADAPTION & INNOVATION : NIL

1. Efforts in brief made towards technology absorption, adaptation & innovation. NIL

2. Benefits derived as a result of above efforts : Does not arise

3. In case of Imported Technology : N.A.

D) CONSERVATION OF ENERGY: Particulars relating to conserva- tion of energy pursuant to Section 217(1) (e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 is not applicable to the company. However, electricity consumed during the finan- cial year is as under:



CONSUMPTION OF ENERGY:

Power and Fuel Consumption: Year Ended Year Ended

31.03.2010 31.03.2009

a) Electricity purchased:

- No. of Units Purchased 2,66,875 3,54,934

- Total Amount (Rs.) 14,36,952 18,44,214

- Rate / Unit (Rs.) 5.38 5.20

b) Own Generation

(Through Diesel Generator):

- Hrs.(consumption) 118.25 98.46

- litre per hr. 30 30

- Rate / hr.(Rs.) 1090 970

ACKNOWLEDGEMENTS

Your Directors take this opportunity to offer their sincere thanks to various departments of Central and State Government, Bankers, Fi- nancial Institutions, Customer, Travel Agents, Suppliers and Contrac- tors as well as shareholders of the company during the year under review.

The directors also wish to place on records the appreciation for the contribution made by all the employees of all levels and hope that with their continued commitment and dedication the company could look forward to more profitable operations ahead.



For and on behalf of the Board of Directors

Sd/-

Place: New Delhi UMESH PHALPHER

Date: 3rd September, 2010 CHAIRMAN


Mar 31, 2009

The Directors have pleasure in presenting their Twenty Third Annual Report together with the Audited statement of Accounts of the Company for the financial year ended 31st March 2009.

FINANCIAL RESULTS

The financial results for the year ended 31st March 2009 are given below:

(Rs. In Lacs)

Year ended Year ended 31.03.2009 31.03.2008

Total Income 232.48 248.74

PBDIT 29.41 38.18

Interest 6.31 16.23

Depreciation 72.36 72.61

Loss for the year (49.26) (50.67)

Extraordinary items (30.38) -

Profit/(Loss) Before Tax & After Extraordinary items (79.64) (50.67)

Provision of Taxation 1.78 2.40

ProW(Loss) After taxation (81.42) (53.07)

Balance carried forward to B/S (1149.28) (1067.86)

PBDIT/Total Income-% 12.65 14.21

DIVIDEND

ln view of loss incurred by the company during the year under review, your directors are unable to recommend any dividend for the year ended 31st March 2009.

BUSINESS

During the year under review, the companys total income has been decreased from Rs. 248.74 lacs to 232.48 lacs, and Profit before depreciation, interest and tax has also been decreased from Rs.38.18 lacs to Rs. 29.41 lacs. The main reason for lower income was due to the world wide recession and not being able to undertake major up gradation of the hotel facilities due to financial constraints

SETTLEMENTS WITH IFCI & TFCI LTD.

Your directors are happy to report that Company has settled and paid the entire loan amount / dues of IFCI & TFCI Ltd. through One Time Settlement Scheme.

FUTURE PROSPECTS

The Indian economy is recovering slowly and Sequel to the Government of Indias Programme for achieving 7% GDP growth during current fiscal year domestic tourism market offer huge growth and development potential. Large chunk of guest arrivals in your Companys resort is from neighbouring states, which have predominantly agriculture- based economy. With near normal monsoon during current session, giving a much needed boost to the farm economy. The increase in disposable income of the rural economy will boost the domestic tourism market.

CORPORATE GOVERNANCE

A separate report on Corporate Governance is attached as Annexure to the Annual Report. M/s Balika Sharma & Associates, Practicing Company Secretaries confirming compliance of conditions of Corporate Governance is included in the said Corporate Governance Report.

A separate Management Discussion & Analysis Report, covering a wide range of issues relating to performance & business prospects is given as annexure to this report.

FIXED DEPOSIT

The company has no invited or accepted any fixed deposit from the public pursuant to Section 58A of the Companies Act. 1956 during the year review.

DIRECTORS

Shri Ragavan Naidu, Director is liable to retire by rotation at the ensuing Annual General Meeting, and being eligible offer himself for re- appointment.

DISPUTE & COMPROMISE WITH M/S UMAK INVESTMENT COMPANY PRIVATE LIMITED

Your Company had taken loan from M/s Umak Investment Company Private Limited for the purpose of repayment of amount of one time settlement to IFCI & TFCI Limited. Further the entire loan along with the upto date interest thereon has been settled by way of sale/transfer of 814930 no. of equity shares of the promoters, their relatives, friends and associates @ Rs 151/- per share. In addition to the above loan to the company M/s Umak.Investment Company Pvt. Ltd has also advanced Rs. 3.256 Crore to Promoters Directors of the company In their personal capacity, the same has also been paid and settled along with up-to-date interest thereon by the Promoters Directors by way of sale/ Transfer of 217470 no. of equity shares @ Rs. 151/- per shart as per the Memorandum of Understanding dated 15th March,2007 between M/s Umak Investment Company Private Limited, Promoters Directors and the Company. Thereafter, with regard to repayment of above said loans, a dispute had arisen between the company and s Umak Investment Company Pvt. Ltd. The matter is still pendire with Honble Delhi High Court.

Thereafter, M/s Umak Investment Company Pvt. Limited along with Mr. AAkash Bajaj has filed petition under section 397/398 of the Companies Act, 1956, before the Honble Company Law Board. Aft* some hearing, both the parties had submitted their compromise offer before the Honble Company Law Board, Honble Company Law Board in their hearing held on 20th day of July, 2009 had settled the dispute between M/s Umak Investment Company Pvt. Limited, the Company and its promoter Directors. As per the order of CLB, both the parties shall withdrawn their legal cases pending before the various courts/forums and also reverse the adjustment entries as above explained.

Subsequent to the Order of Honble Company Law Board, the accounting entries passed in Financial year 2007-2008 with regard to adjustment of loan of M/s Umak Investment Company Pvt. Limited have been reversed by the Board of Director of the company in their meeting held on 27th July, 2009, but the same have been accounted for as on 31st March, 2009 as an accounting prudence in preparation of these accounts.

INSPECTION UNDER SECTION 209A OF THE COMPANIES ACT, 1956

During the year under review, an inspection has been carried by Regional Director (NR), Ministry of Corporate Affairs under section 209A of the Companies Act, 1956. During the Inspection the Inspecting Officers had asked various documents and explanations, Company had replied their queries in due course. Subsequent to such inspection, the company has received show cause notices from the office of Registrar of Companies, Punjab, H.P. & Chandigarh, Ministry of Corporate Affairs, Government of India in connection with Inspection carried by Regional Director (NR). Company had replied the show cause notices and also filed the compounding application for the compoundable offences.

AUDITORS

The statutory auditors of the Company M/s. Sharma Goel & Company retire at the ensuring Annual General Meeting and being eligible offer themselves for re-appointment.

The auditors have furnished a certificate that their re-appointment would be within the limits prescribed under section 224(1 B) of Companies Act, 1956.

ACCOUNTS AND AUDIT REPORT:

The Notes to Accounts referred to in the Auditors Report are self explanatory and, therefore, do not call for any further comments. However, in respect of dispute & compromise with M/S Umak Investment Company Private Limited, the Board of Directors wishes to explain as under: -

Company had taken loan from M/S Umak Investment Company Private Limited for the purpose of repayment of amount of one time settlement to IFCI & TFCI Limited. Further, the entire loan along with the upto date interest thereon has been settled by way of sale/transfer of 8,14,930 no. of equity shares of the promoters, their relatives, friends and associates @Rs 151/- per share. In addition to the above loan to the company M/s Umak Investment Company Pvt. Ltd has also advanced Rs. 3.256 Crore to Promoters Directors of the company in their personal capacity, the same has also been paid and settled along with up-to-date interest thereon by the Promoters Directors by way of sale/ Transfer of 2,17,470 no. of equity shares § Rs. 151/- per share as per the memorandum of Understanding dated 15th March, 2007 between M/s Umak Investment Company Private Limited, Promoters Directors and the Company. Thereafter, with regard to repayment of above said loans, a dispute had been arisen between the company and M/s Umak Investment Company Pvt. Ltd.

Thereafter, M/s Umak Investment Company Pvt. Limited along with Mr. AAkash Bajaj has filed petition under section 397/398 of the Companies Act, 1956, before the Honble Company Law Board. After some hearing, both the parties had submitted their compromise offer. before the Honble Company Law Board. Honble Company Law Board in their hearing held on 20th day of July, 2009 had settled the dispute between M/s Umak Investment Company Pvt. Limited, the Company and its promoter Directors. As per the order of CLB, both the parties shall withdraw their legal cases pending before the various courts/forums and also reverse the adjustment entries as above explained.

Subsequent to the Order of Honble Company Law Board, the accounting entries passed in Financial year 2007-2008 with regard to adjustment of loan of M/s Umak Investment Company Pvt. Limited have been reversed by the Board of Director of the company in their meeting held on 27th July, 2009, but the same have been accounted for as on 31st March, 2009 as an accounting prudence in preparation of these accounts. A sum of Rs. 50 lacs (i.e. Rs. 30 lacs paid by company, Rs. 10 lacs paid by promoter directors and Rs. 10 lacs by other) has been paid to M/s Umak Investment Company Pvt. Limited. The company is also in process for withdrawing the legal cases pending before the various courts/forums. As on date, company as well as its promoters director have complied the Honble Company Law Board order. In view of the above, your directors are of the opinion that the Balance Sheet now present a complete true and fair picture.

LISTING OF SHARES

Your Companys share are listed and traded at Bombay Stock Exchange Limited, Delhi Stock Exchange Limited and Ludhiana Stock Exchange Limited. The Company has paid up to date listing fees to all stock Exchanges.

PARTICULARS OF EMPLOYEES

There was no employee who was in receipt of remuneration over & above the limits prescribed under Section 217(2A) of the Companies Act, 1956 as such no statement is furnished under the said Section.

DIRECTORS RESPONSIBILITY STATEMENT:

Pursuant to Section 217 (2AA) of the Companies Act, 1956, the Directors of your Company declare as under:

(i) That in the preparation of the Annual Accounts for the financial year ended 31st March, 2009, the applicable Accounting Standards had been followed along with proper explanation relating to materia departures.

(ii) That the Company has selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company as at 31st March, 2009 and of the Profit or Loss of the company for the said period.

(iii) That proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities.

(iv) That the annual accounts for the financial year ended 31st March, 2009 are prepared on a going concern basis.

DEMATERIALISATION

The Company has entered into an agreement with Central Depositor, Services (India) Limited (CDSL) for dematerialization of your shares, CDSL has allotted Code No. ISIN INE692D01010 to the Company foi the purpose of Dematerialization. NSDL had rejected the admission for establishing connectivity in this regard quoting eroded net worth of the Company.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO:

Pursuant to Section 217(1) (e) of the Companies Act, 1956 read wifr the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988, (as amended) a statement giving the required information relating to energy conservation, technology absorption. foreign exchange earnings and outgo is as under:

a) FOREIGN EXCHANGE EARNINGS:

Conservation of Energy, Technology Absorption, Foreign Exchange / out go.

Foreign Exchange Earning NIL

Foreign Exchange Outgo NIL

b) RESEARCH & DEVELOPMENTS: NIL

c) TECHNOLOGY ABSORPTION, ADAPTION & INNOVATION: NIL

1. Efforts in brief made towards technology absorption, adaptation & innovation, NIL

2. Benefits derived as a result of above efforts : Does not arise,

3. In case of Imported Technology : N.A.

d) CONSERVATION OF ENERGY: Particulars relating to conservation of energy pursuant to Section 217(1) (e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 is not applicable to

ACKNOWLEDGEMENTS

Your Directors take this opportunity to otter their sincere thanks to various departments of Central and State Government, Bankers, Financial Institutions, Customer, Travel Agents, Suppliers and Contractors as well as shareholders of the company during the year under review.

The directors also wish to place on records the appreciation for the contribution made by all the employees of all levels and hope that with their continued commitment and dedication the company could look forward to more profitable operations ahead.

For and on behalf of the Board of Directors

Sd/- Place: New Delhi UMESH PHALPHER

Date: 1st September, 2009 CHAIRMAN

 
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