23rd annual report for the year ended 31st march 2013 · velan hotels ltd annual report 2012 - 2013...

VELAN HOTELS LTD

Annual Report 2012 - 2013

BOARD OF DIRECTORS

COMPANY SECRETARY

SRI. M. SRINIVASAN

AUDITORS M/S.P.S.KRISHNAN & CO., CHARTERED ACCOUNTANTS40- A, APPACHI NAGAR MAIN ROADTIRUPUR 641 607PHONE : 0421-2227526 to 30EMAIL : [email protected] REGISTRAR & SHARE TRANSFER AGENT (PHYSICAL & DEMAT) SKDC CONSULTANTS LTD.“KANAPATHY TOWERS”

RD3 FLOOR, 1391/A-1 SATHY ROADGANAPATHY POST,COIMBATORE 641 008

PHONE : 0422-6549995E-MAIL : [email protected]

SRI.E.V.MUTHUKUMARA RAMALINGAMMANAGING DIRECTOR

SRI.M.R.GAUTHAMEXECUTIVE DIRECTOR

SRI P.GANESANDIRECTOR

SRI.T.GOPALAKRISHNANDIRECTOR

DR. NAMASIVAYAM KARTHIKEYANDIRECTOR

SRI.B.A.MADHUSUDHANWHOLE-TIME DIRECTOR

SMT.M.SASIKALADIRECTOR

SRI.K.SUBRAMANIAMDIRECTOR

CHIEF FINANCE OFFICER

SRI. D. MURALI

BANKERS

ALLAHABAD BANK

ANDHRA BANK

AXIS BANK LIMITED

UNION BANK OF INDIA

REGD. & ADMINISTRATIVE OFFICE

41 KANGAYAM ROAD

TIRUPUR 641 604

TAMIL NADU

LOCATION OF HOTELS

VELAN HOTEL - GREENFIELDS

41 KANGAYAM ROAD

TIRUPUR 641 604 - TAMILNADU

VELAN HOTEL - COONOOR

RITZ ROAD, BEDFORD

COONOOR 643 101

TAMILNADU

LOCATION OF RESTAURANTS

VELAN UTHARA RESTAURANT

AVANASHI ROAD,

BEHIND IDBI BANK LTD

TIRUPUR 641 602

THE VELAN FOOD PARK

RAM NAGAR

COIMBATORE 641 009

VELAN HOTELS LIMITED

RD23 ANNUAL REPORT FOR THE YEAR ENDED 31ST MARCH 2013

PROJECTS IN PROGRESS

1. THE VELAN ESPLANADE - MALL & MULTIPLEX

2. CONVENTION & CONFERENCE HALL

3. THE VELAN RENEWABLE ENERGY PLANT (TVREP) :

BIO-MASS BASED CO-GEN RENEWABLE ENERGY PLANT

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VELAN HOTELS LTD

Annual Report 2012 - 2013

NOTICE

DIRECTORS' REPORT

MANAGEMENT DISCUSSION AND ANALYSIS

REPORT ON CORPORATE GOVERNANCE

AUDITORS' REPORT

BALANCE SHEET

PROFIT & LOSS ACCOUNT

NOTES

ADDITIONAL NOTES

CASH FLOW STATEMENT

SIGNIFICANT ACCOUNTING POLICIES

01

05

10

14

24

28

29

30

36

39

41

rdNOTICE OF THE 23 ANNUAL GENERAL MEETING

rdNOTICE is hereby given that the 23 Annual General Meeting of the Company will be held at the Registered thOffice of the Company situate at 41, Kangayam Road, Tirupur - 641 604 on Wednesday, the 25 day of

September 2013 at 4.00 p.m. to transact the following business :

AGENDA

ORDINARY BUSINESS

1. To receive, consider and adopt the Audited Balance Sheet as at 31st March, 2013 and Profit & Loss

Account for the year ended as on that date, Cash Flow Statement and the Reports of the Auditors and

Directors of the Company.

2. To appoint a Director in place of Sri.K.Subramaniam who retires by rotation, and being eligible, offers

himself for reappointment.

3. To appoint a Director in place of Smt.M.Sasikala who retires by rotation, and being eligible, offers

herself for reappointment.

4. To consider and if thought fit, to pass with or without modification, the following resolution as an

Ordinary Resolution :-

"RESOLVED that Mr.T.Gopalakrishnan, a Director liable to retire by rotation does not seek re-

appointment and is therefore not re-appointed a Director of the Company"

"RESOLVED FURTHER that the vacancy on the Board of Director of the Company so created be not

filled"

5. To appoint Auditors to hold office from the conclusion of this Annual General Meeting to the conclusion

of the next Annual General Meeting and authorize the Board to fix their remuneration.

SPECIAL BUSINESS

6 To consider and if thought fit, to pass with or without modification, the following resolution as an

Ordinary Resolution

"RESOLVED THAT pursuant to the provisions of Section 257 and other applicable provisions of the

Companies Act, 1956 (including any modification or re-enactment thereof) Sri.Giri Balasubramanian

be and is hereby appointed as a Director liable to retire by rotation in respect of whom the Company

has received a notice in writing from a member under the provisions of Section 257 of the Companies

Act 1956 proposing his candidature for the office of a Director"

VELAN HOTELS LTD

Annual Report 2012 - 2013 1

VELAN HOTELS LTD


EXPLANATORY STATEMENT UNDER SECTION 173 OF THE COMPANIES ACT, 1956

ITEM NO.6

The Company has in terms of provisions of Section 257 of the Companies Act, 1956 received a Notice in

writing from a member, proposing Sri.Giri Balasubramanian's candidature for the office of a Director of the

Company.

Sri.Giri Balasubramanian is a founding Executive Director of Kinship Technologies (P) Ltd., (A Unit of PRA

International). PRA International is the fourth largest contract research organization in the globe

headquarter in Raleigh, NC, USA.

Kinship Technologies is a global player in the automation of clinical trial industry serving world's leading

pharmaceutical organization. Sri.Giri Balasubramanian was instrumental in the innovation of a

revolutionary product: EXACT that expedites the clinical trial analysis and standardization of trial data for

the pharmaceutical companies involved in Drug Discovery.

Prior to founding Kinship, Sri.Giri Balasubramanian has worked in various organizations such as

CHM2HILL and Tata Consultancy Services. During this tenure, Sri.Giri Balasubramanian has worked with

global clients such as GE Appliances, APL, Eli Lilly, AXA, Sun Life, BT, CDS as a lead consultant in

providing turnkey solutions in different business areas.

Sri.Giri Balasubramanian holds a Masters degree in Mathematics, Statistics & Computer Science from

Marquette University, Milwaukee, USA and Bachelors degree in Electronics & Communication

Engineering, from Govt. College of Engineering, University of Madras, India.

Your Directors consider the said Ordinary Resolution is in the interest of the Company and therefore

recommends the same for your approval.

None of the other Directors of the company except Sri.Giri Balasubramanian is concerned or interested in

the resolution.

For and on behalf of the Board

E.V.Muthukumara Ramalingam Managing Director

Place : Tirupur Date : 30/05/2013

VELAN HOTELS LTD


NOTES FOR MEMBERS' ATTENTION:

1. A MEMBER ENTITLED TO ATTEND AND VOTE AT THE ANNUAL GENERAL MEETING IS ENTITLED TO APPOINT A PROXY TO ATTEND AND VOTE INSTEAD OF HIMSELF AND THE PROXY NEED NOT BE A MEMBER OF THE COMPANY. THE PROXY FORM SHOULD BE LODGED AT THE REGISTERED OFFICE OF THE COMPANY ATLEAST 48 HOURS BEFORE THE COMMENCEMENT OF THE MEETING. CORPORATE MEMBERS ARE REQUESTED TO SEND A DULY CERTIFIED COPY OF THE BOARD RESOLUTION AUTHORIZING THEIR REPRESENTATIVES TO ATTEND AND VOTE AT THE ANNUAL GENERAL MEETING.

2. The Register of Members, the Register of Beneficial Owners and Share Transfer Books of the Company will remain closed from 22/09/2013 to 25/09/2013 ( Both days inclusive )

3. Details in respect of appointment / reappointment of Directors retiring by rotation, pursuant to Clause 49 of the Listing Agreements are annexed hitherto.

4. Members holding shares in physical form are requested to notify change in their address, if any, to the Registrar & Share Transfer Agent of the Company and Members holding shares in dematerialised form are requested to notify change in their address to their respective Depository Participants.

5. Members are requested to bring their copy of the Annual Report to the Annual General Meeting.

6. The equity shares of the Company are listed on Bombay Stock Exchange Ltd. The Annual Listing fee has been paid upto date to the above said Exchange.

7. For the convenience of the Members, an attendance slip is annexed to the proxy form. Members are requested to affix their signatures at the space provided and hand over the attendance slip at the place of the meeting.

8. Shareholders seeking any information with regard to accounts are requested to write to the Company atleast seven days prior to the meeting so as to enable the Management to keep the information ready.

9. Members are requested to update their email id with their respective depository participant and with the Company's Registrar and Transfer Agents (RTA) to enable dispatch the communications in electronic form from time to time as your Company has taken a "Green Initiative" as per the directions of Ministry of Corporate Affairs, New Delhi allowing paperless compliances for Companies.

10. Equity shares of the Company have been placed under Compulsory Demat Trading. Members who have not dematerialised their physical holding in the Company are advised to avail the facility of dematerialisation of equity shares of the Company.

11. The ISIN of the equity shares of your Company is INE548D01014


E.V.Muthukumara Ramalingam Managing Director

Place : Tirupur Date : 30/05/2013

VELAN HOTELS LTD


Details of the Directors seeking appointment/reappointment at the forthcoming Annual General Meeting

Sri K.Subramaniam is a reputed Industrialist of Coimbatore region with considerable contacts

among business communities. He holds a B.E. in Mechanical Engineering. He started his career as Senior

Scientist in South India Textile Research Association,(SITRA) Coimbatore. After graduation in

Engineering, he promoted Statex Engineering Pvt Ltd which manufactures of 26 different types of

instruments as well as Compact attachments for Ring Frames. As he has long and varied experience in the

field of instruments, he promoted many companies in the field of Engineering and Electronics as well.

Mrs.M.Sasikala is the wife of Shri.E.V.Muthukumara Ramalingam, Managing Director. She is a home

maker and is the backbone to her husband for all his commercial ventures. The Velan Esplanade Project is,

in a way, a result of her vision.

Sri.Giri Subramaniam is being proposed to appointed as Director of the Company at the ensuing Annual General Meeting.The brief profile of Sri.Giri Subramaniam, the candidate for the office of a Director of the Company, reported under Item No.6 of the Explanatory Statement pursuant section 173 of the Companies Act, 1956.

DIRECTORS' REPORTTo

The Shareholders,Velan Hotels Limited

Ladies and Gentlemen,

rdYour Directors have great pleasure in presenting the 23 Annual Report of the Company together with its stAudited Profit and Loss Account for the year ended 31 March, 2013 and the Balance Sheet as on that date.

FINANCIAL RESULTS

Profit Before Interest, Depreciation and Tax

Less : Interest

Profit Before Depreciation & Tax

Less : Depreciation

Add : Exceptional Item

Profit Before Tax [PBT]

Less : Tax Expenses

a) Current Tax

b) Tax relating to prior years

c) Mat Entitlement

d) Deferred Tax

Profit After Tax

Balance b/f from previous years

Profit Available for appropriation

Less : Proposed Dividend

Less : Tax on proposed Dividend

Balance to be carried over to Balance sheet

[PAT]

2012-13 2011-12PARTICULARS

271.23

81.28

189.94

91.56

6.99

105.37

21.10

4.23

4.93

14.02

61.09

250.03

311.12

---

---

311.12

330.26

90.99

239.28

89.86

6.99

156.40

31.30

9.28

22.49

(0.50)

93.83

156.20

250.03

---

---

250.03

VELAN HOTELS LTD


(Rs. in lakhs)

ECONOMY OVERVIEW AND OPERATING RESULTS

The year 2012-13 was another challenging and tough year owing to moderate growth in global economy due to the shock of the Eurozone crisis which has affected trade across industries and geographies. Global risk aversion led to a decrease in exports by India, which in turn exerted downward pressure on the economy by widening the current account deficit in the fiscal year 2012/13. The slow down in tourist arrivals as well as rise in room inventory affected the hotel industry too. In 2012-13, the growth in foreign tourist arrivals to India slowed down to 2.33 per cent versus 5.09 per cent in 2011-12.

The most serious challenge faced the Indian economy was inflation. Supply-side constraints, logistical issues and poor agricultural performance due to erratic monsoon have led to a sharp increase in food prices, a crucial determinant of inflation. Rising fuel prices and the move to more expensive sources of fuel have raised the level of public expenditure. Coupled with falling export demand, this has stoked inflationary pressures through currency depreciation.

During the year 2012-13 your Company's turnover decreased by 2.37% from Rs.1481 lakh to Rs.1446 Lakh. The gross operating profit (PBDIT) was lower by 17.87% at Rs.271 lakh from the previous year's Rs.330 lakh and the net profit was lower by 34.89 % in the current year at Rs.61 lakh compared to Rs.94 lakh in the previous year. The increase in operating costs are mainly due to increase in power, fuel expenses and repairs and maintenance costs. As being in the hotel industry, it is necessary to maintain items should be made available irrespective of guest actual occupancy level.

Repairs and maintenance increases is due to renovation of all items of small value that increase the guest conveniences.

As the Biomass plant project activities are almost completed and will be ready for commissioning during the year 2013-14, the Company will save the power cost which constitutes almost 25% of total operating cost and thereby will increase the profitability in the ensuing years.

As the total income decreased by 2.37% from last year, as the Garments and Knitting Industries in Tirupur are reeling under recessionary trend due to various economic factors.

DIVIDEND:

The Board of Directors are happy to declare that the various expansion activities are at various stages nearing completion. The Board of Directors are intending to utilize the available surplus in project completion activities. So they propose not to recommend any dividend this year.

FUTURE PROSPECTS AND EXPANSION:

The Board is highly optimistic that all the project expansion activies are nearing completion and the asset base of the Company is increasing due to addition of expansion components with the Company. Once these activities are completed, the Board is expecting the increase in income as well in profits.

As the expansion projects activities are finalized and subsequently upgraded in technological and increased in scope to make it world class, state-of-art facility, the total project cost increased from Rs.124 crores to Rs.162 crores and this cost includes the land acquisition for biomass growing land and working capital requirement for the power generation plant.

VELAN ESPLANADE - SHOPPING MALL

The Velan Esplanade (Mall & Multiplex) is the first environment friendly Green Mall in the country deriving its 100% energy out of renewable. The project is in a very high strategic location and is the first and only mall of Tirupur. The Velan Esplanade is fully completed and handed over to the tenants for fit-outs. The mall would house around 32-34 retail outlets apart from the food court, Cash'n carry and the 6-screen Multiplex. The mall was inaugurated (Soft launch) on 12th December, 2012. The commencement of commercial operation of Shopping Mall is expected to start earning in Q2.

VELAN ESPLANADE - MULTIPLEX

The Multiplex would be operated by Satyam Cinemas and the 45,000 sq ft Cash'n Carry is leased to Reliance Fresh. The Multiplex is under construction and is expected to be given for fit-outs and expected to be operational by during the year 2013-14.

BIO-MASS BASED RENEWABLE ENERGY PLANT

The Renewable Energy Co-generation plant operating on world class GE Technology based on Bio-mass fuel (a technology presently employed in the hotel already) will bring down the cost of power now and in future. The surplus power will be sold at market rates. The by-product of chilled water will meet the entire air-conditioning requirement of the hotel and The Velan Esplanade thereby reducing the operating costs. The charcoal recovered can also be sold which will shore up the top-line. The plant is also eligible for Renewable Energy Certificate and Carbon Credits, which will also yield significant revenues. This plant that used a technology approved by UNFCCC for meeting CDM benefits was launched (soft launch) on 12th December 2012 and Air conditioning supply from the plant was started on 12th December, 2012 and Power generation will be available from the year 2013-14.

BIO-MASS PLANTATIONS

The Company is convinced that there is a need to go in for bio-mass cultivation as a backward integration for the power plant, to ensure regular supply of bio-mass, which will also reduce the raw material cost.

VELAN HOTELS LTD


VELAN HOTELS LTD


The Renewable Energy Plant will operate on Wood (Prosopsis Julie Flora/Melia Dubia). The Company has identified 800 acres of land in South Tamil Nadu. The Company would develop the land with the required plant & machinery, farm equipments and bare Irrigation/Fertilisation systems required for captive cultivation of Prosopsis Julie Flora/Melia Dubia. The Bio-Mass Plantation will give us the existing crop for immediate use. Hence, the bio-mass requirement for our plant would be met by our own plantation.

CONVENTION CENTRE

The Velan Hotel- Greenfields at Tirupur is well known to house its conventions in the existing two large halls and the open landed area in the Velan property by erecting further temporary structures.

The company after understanding the demand for good convention halls in Tirupur, intends to add a third large hall. The proportional land costing has already been brought in to the Company. The civil works will start soon and will be ready in the year of 2013-14.This income will add profitbility to the Company considerably.

ADDITIONS / RENOVATION

It becomes necessary to update and modernise the existing hotel property and its facilities to keep the hotel competitive worth. The planned additions and renovations at the existing hotels at Tirupur and Coonoor have been completed, which resulted in up-gradation of rooms, the spa at Tirupur hotel, the food and beverage outlets at Tirupur (signature restaurant and bar).

The Management is taking effective steps for completion of the projects at stipulated date. Your Company continues to pursue the completion of on-going projects to achieve sustainable and profitable growth.

CORPORATE GOVERNANCE

Pursuant to the requirements of Listing Agreement with the Stock Exchange, your Directors are pleased to annex the following:

1. Management Discussion and Analysis Report2. A Report on Corporate Governance3. Auditor's certificate regarding compliance of conditions of Corporate Governance.

INFORMATION REQUIRED UNDER SECTION 217 (1) (e) OF THE COMPANIES ACT, 1956.

The information required under Section 217(1) (e) of the Companies Act, 1956 read with Rule 2 of the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 is furnished hereunder:

I. CONSERVATION OF ENERGY:

a. The operations of the Company are not energy intensive. However the Company has taken all possible measures to control and reduce consumption of energy. The Company is making continuous efforts to conserve and optimize energy wherever practicable by economizing on fuel and power.

b. Since the activity of the Company is not covered under the list of specified Industries under the Schedule to the said Rules, the information to be reported in Form-A, the form for Disclosure of Particulars with respect to Conservation of Energy is not furnished.

II. TECHNOLOGY ABSORPTION:

The Company has no technical collaboration arrangement with any organization.

VELAN HOTELS LTD


III. FOREIGN EXCHANGE EARNINGS AND OUTGO

Foreign Exchange Earnings And Outgo

1. Earnings

2. Expenditure in Foreign Currency - Import of machinery & Equipments

Current Year 2012-13[Rs.in lakhs]

301.80

--

Previous Year 2011-12[Rs.in lakhs]

291.39

39.36

INFORMATION REQUIRED UNDER SECTION 217 (2A) OF THE COMPANIES ACT, 1956.

None of employee of the Company was in receipt of remuneration, which in the aggregate exceeded the limits prescribed under sub-section (2A) of Section 217 of the Companies Act, 1956 during the year.

DIRECTORS' RESPONSIBILITY STATEMENT UNDER SECTION 217 (2AA) OF THE COMPANIES (AMENDMENT ACT) 2000

The Board of Directors Report that:

i) Your Directors have followed the applicable Accounting Standards, in the preparation of annual accounts.

ii) your Directors have 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 at the end of the financial year 31st March, 2013 and of the Profit of the Company for that period.

iii) your 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

iv) Your Directors have prepared the annual accounts on a 'going concern' basis.

v) The financial statements have been audited by M/s.P.S.Krishnan & Co., Chartered Accountants, the Statutory Auditors.

vi) The Audit Committee meets periodically with Internal Auditor and the Statutory Auditors to review the manner in which the auditors are discharging their responsibilities, and to discuss auditing, internal control and financial reporting issues. To ensure complete independence, the Statutory Auditors and the Internal Auditors have full and free access to the members of the Audit Committee to discuss any matter of substance.

DEPOSITS

Your Company has neither invited nor accepted any fixed deposits from the public as per the provisions of Section 58A of the Companies Act, 1956 during the year.

VELAN HOTELS LTD


DIRECTORS

Sri.T.Gopalakrishnan retires by rotation at the forthcoming Annual General Meeting. Sri.T.Gopalakrishnan has expressed his intention not to seek re-appointment. The Members of the Board place on record their deep sense of appreciation for the services rendered by Sri.T.Gopalakrishnan during his tenure as Member of the Board and other Committees.

Directors Sri.K.Subramaniam and Smt.M.Sasikala retire by rotation at the forthcoming Annual General Meeting and being eligible for re-election, offer themselves for re-appointment.

The Company has in terms of provisions of Section 257 of the Companies Act, 1956 received a Notice in writing from a member, proposing Sri.Giri Balasubramanian's candidature for the office of a Director of the Company. We seek your support in confirming his appointment as a Director liable to retire by rotation.

AUDITORS

M/s. P.S.Krishnan & Co., Company's present Auditors retire at the ensuing Annual General Meeting and being eligible for reappointment, they have consented to continue to be the Auditors of the Company.

BANKERS

M/s.Allahabad Bank, M/s.Andhra Bank, M/s.AXIS Bank and M/s.Union Bank of India are bankers to the Company and your Directors place on record their appreciation for their co-operation and services.

SAFETY AND SECURITY

Hotels have become vulnerable to terror attacks on account of their high profile guests that include foreign tourists. Keeping in mind the security threats to the hospitality industry in India, the company has stepped up its efforts to ensure an environment of well being, safety and security for all its guests and co-workers. The company's guest floors as well as all public areas are well equipped with closed circuit cameras. Movement of all vehicles, employees, vendors and guests is monitored and scanned.

ACKNOWLEDGEMENT

Your Directors would like to express their sincere appreciation and gratitude for the cooperation and assistance from its shareholders, bankers, regulatory bodies, Statutory Auditors / Professionals and other business constituents during the year under review.

Your Directors also wish to place on record their deep sense of appreciation for the contribution and commitments displayed by Executives, Staff and Employees of the Company.

Date : 30.05.2013

Place : Tirupur


E.V. Muthukumara RamalingamManaging Director and Chairman of the Meeting

VELAN HOTELS LTD


MANAGEMENT DISCUSSION AND ANALYSIS REPORT(Pursuant to Clause 49 of the Listing Agreement with Stock Exchange)

A. INDUSTRY STRUCTURE AND DEVELOPMENTS:

The travel, tourism and hospitality industry today is a major service sector in the world economy and very dynamic and booming work sphere with great scope for the use of creativity, imagination and orientation on a global level. All over the world, the tourism industry and hospitality are one of the largest and most profitable industries and contributes substantially to the foreign exchange earned.

India's travel, tourism and hospitality industry is one of the fastest growing service industries in the country due to a burgeoning middle class, increasing purchasing power, a rising inflow of foreign tourists, and successful government campaigns promoting 'Incredible India'. Clearly, India is fast becoming a popular tourist destination world over and is projected to grow at a rate of 8.8 per cent during 2007-16, placing India as the second-fastest growing tourism market in the world.

The tourism sector can also be considered as the backbone for allied sectors, like hospitality, civil aviation, and transport. Domestic tourism is very huge in the country, promoted by various intents. Pilgrim and leisure tourism are two very important sectors.

Foreign Tourist Arrivals (FTAs) to India increased from 64.62 lakhs in financial year 2011-12 to 66.95 lakhs in financial year 2012-13, thereby resulting in an increase of 3.61% YoY basis. Tourism continues to play an important role as a foreign exchange earner for the country. In 2012-13, foreign exchange earning (FEE) from tourism were Rs.99,594 crores as compared to Rs. 83,607 crores in 2011-12, registering a growth of 19.12%

B. OPPORTUINITIES & THREATS:

OPPORTUNITIES

India developed as one of the world's most cost-efficient medical tourism destinations, and is anticipated that the Indian medical tourism market will register a compound annual growth rate (CAGR) of 27 per cent during 2011-15, as per a RNCOS report titled 'Booming Medical Tourism in India'. The Government of India allows 100 per cent foreign direct investment (FDI) in the hotel sector on automated basis.

India is the world's second largest producer of food next to China and has the potential of being the biggest with the food and agricultural sector. The total food production in India is likely to double in the next ten years and there is an opportunity for large investments in food and beverages Industry.

The Indian hospitality industry has emerged as one of the key industries driving growth of the services sector in India. It has evolved into an industry that is sensitive to the needs and desires of people. The fortunes of the hospitality industry have always been linked to the prospects of the tourism industry and tourism is the foremost demand driver of the industry. The Indian hospitality industry has recorded healthy growth fuelled by robust inflow of foreign tourists as well as increased tourist movement within the country and it has become one of the leading players in the global industry.

We operating in the hospitality industry, are expecting and optimistic about the earnings as Tirupur is a strong base in Knitting and Garments Industry. As FTA agreement with Euro countries are at the final stages and it is expected Indian Government will finalise the FTA anytime. This will lead a tremendous growth in Tiruppur Garments sector and thus our earnings will automatically grow not only from hotel but also from all its expansion projects.

THREATS

The Tourism Ministry had set a target of 12 per cent year-on-year growth in tourist inflows in 2012 and planned to double that to 12 million by 2016. Against the projection of 12 per cent annual growth in foreign tourist arrivals, 2013 is set to see negligible increase, implying loss of foreign exchange, besides an image dent due to violence against women. Top source countries for foreign tourists -- the

VELAN HOTELS LTD


US, UK, Canada, Sri Lanka, Australia and Switzerland have issued travel advisories to their citizens, cautioning about safety and security in India, many even making a special mention of dos and don'ts for women.

The industry, already reeling under the blow of the economic slowdown, is set to take brunt of the recent cases of assault on foreign tourists as well, tension with Sri Lanka and disturbance in Kashmir and the Northeast.

India is the high cost of air travel within the country on account of very high fuel costs which today account for 50% or more of the operating cost of airlines which can continue to adversely impact hotel occupancies in India and forcing Indians to stop traveling within India and explore cheaper options outside of the country. Even business travel within India is down as airfares have gone up significantly.

C. SEGMENTWISE PERFORMANCE:

The company is presently engaged in only one segment of business i.e. Hotelier. Hence the report on segment wise performance is not applicable.

D. RISKS AND CONCERNS:

The allocation to the tourism ministry was hiked by Rs 87.66 crores in the Budget for the financial year 2013-14. Despite the tourism allocation being hiked, several other demands of the industry have once again been overlooked. High taxation and industry status have been the industry's demand for time immemorial, but has faced ignorance year after year. The recently announced Budget further burdened the F&B industry with taxes on restaurants serving food with part or full air-conditioning facility.

To maintain room tariff at earlier level to meet competition and slowdown of Tiruppur garment industries and loaded with high taxation will erode the profitability of hotels, as room revenues make up almost two-thirds of total revenues. Rising costs will be adding to the pressure on profitability.

In a country where branded hotel supply has tripled during the past decade, a quality workforce has failed to keep up and Workforce shortage will result in mounting employee costs. Energy costs too will go up concomitantly.

The Central Government had enacted a new FSSAI Act, which was briefed to be very simple with main intention of collecting data about food vendors throughout the country. It was now turning into a nightmare to the hoteliers as notice, penalty, closure of business were part of the new Act. Under the new Act, once the suspension is given, the license gets cancelled automatically and procuring new license would then take months and till then the hotelier would not be able to do the business.

There has been some easing in the global economic scenario with some immediate term respite from the postponement of the US "fiscal cliff" and the European debt crisis, there continue to be several dark clouds in the horizon driving down global consumer confidence. While there is immense potential, concerns for growth of the industry remain. These include high real estate prices in the country, security threats, shortage of manpower, high tax structure, and non-uniformity in taxes.

The lack of Hygiene, Sanitary conditions, poor Solid Waste Management in/around monuments/ destinations and absence of hygienically maintained public amenities like Toilets are the key factors that are impeding efforts taken by Government Agencies to catapult India as a leading tourist destination.

E. OUTLOOK:

The Ministry of Tourism has also played an important role in the development of the industry, initiating advertising campaigns such as the 'Incredible India' campaign, which promoted India's culture and tourist attractions in a fresh and memorable way. The industry has been witnessing an upswing for last few years partially due to an excellent 'Incredible India' campaign and is expected to increase up to US$ 431.7 billion by the end of 2020.

VELAN HOTELS LTD


On the other front, India has the potential to develop the rural tourism industry. This can benefit the local community economically and socially, and enable interaction between tourists and locals for a mutually enriching experience.

India has the potential to become the number one tourist destination in the world with the demand growing at 10.1 per cent per annum, the World Travel and Tourism Council (WTTC) has predicted. The WTO (World Travel Organisation) predicts that India will receive 25 million tourists by year 2015.

The upcoming industrial parks, manufacturing facilities and ports across the country provide a good opportunity for budget and mid-market hotels. Although around 89,500 additional rooms are expected to come up in India in the next five years, the supply of branded/quality rooms in India is much lower compared to other countries across the globe. Hence, there exists huge potential for investors and operators across all the segments of hotel industry in India.

E. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

The company believes that internal controls are essential ingredient towards achieving excellence in corporate governance. Accordingly, it has set adequate control systems of financial reporting, efficiency of operations and compliance with various rules, regulations etc. The Audit committee of the Board reviews the adequacy of the internal control system on regular basis and monitors on continuous basis the implementations of the internal audit recommendations. Every single cost item goes through a thorough internal audit and in several stages as well. As part of the cost control system, every single aspect of costs goes through stringent pre-expenditure checks and audits as well.

F. BUSINESS PERFORMANCE:

Results of operations for the year ended March 31, 2013

i. Revenues:

Total income marginally stands decreased by 2.37% from Rs.1481 lakhs in 2011-12 to Rs.1446 lakhs in 2012-13.

ii. Operating Expenses:

The total expenditure except Interest and Depreciation stands increased by 2.07% from Rs.1151 lakhs in 2011-12 to Rs.1174 lakhs in 2012-13. The increase is largely on account of increase in Repairs & Maintenance, Power & Fuel and employee cost.

iii. Earnings Before Interest, Depreciation, Tax

The PBIDT Rs.271.23 lakhs for the financial year 2012-13 is 17.87% lower than Rs.330.26 lakhs in 2011-12.

iv. Interest Cost:

During the year under review, the Interest cost stands Rs.81.29 lakhs as compared to Rs.90.99 lakhs in the previous year.

v. Profit Before Tax:

Profit after Extra-ordinary & Exceptional items and Tax at Rs.105.37 lakhs was lower by 32.63% as compared to Rs.156.40 lakhs in 2011-12.

vi. Profit After Tax:

Profit after Tax for 2012-13 stands at Rs.61.09 lakhs is lower than Rs.93.83 lakhs in 2011-12.

VELAN HOTELS LTD


I OPERATING RESULTS :

II PERFORMANCE PARAMETERS:

1. Total Income

2. Profit Before Depre. Int & Tax .

3. Interest

4. Depreciation

5. Tax Liability

6. Net Profit After Tax (*)

7. Dividend %

Dividend Amt

Dividend Tax-

1. Share capital

2. Reserves & Surplus

3.Secured & Unsecured loans

4.Fixed Assets (Gross Block)

5.Accumulated Depreciation

6. Net Block

st31 March, 2012

st31 March, 2011

st31 March, 2010

st31 March, 2009

Particulars

G. FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE:

(Rs. in Lakhs)

st31 March, 2013

1481.11

330.26

90.99

89.86

63.07

93.83

--

--

--

3196.41

4040.93

5695.91

7737.21

1107.67

6629.54

1479.57

382.83

92.07

88.92

70.11

116.64

7.5

58.12

9.65

775.00

809.26

2272.73

3659.39

1037.14

2622.26

1445.95

271.23

81.29

91.56

44.28

61.09

--

--

--

3196.41

4098.04

8178.53

7827.02

1199.22

6627.80

1184.64

311.79

87.39

68.63

56.62

106.14

5

38.75

5.99

775.00

729.56

670.97

3057.71

871.88

2185.83

H. HUMAN RESOURCES:

Industrial Relations remained cordial throughout the year. The strength of your Company lies in its team of competent and motivated personnel. This has made possible for your Company to make significant strides in all areas of its functioning. The Company is proud to possess an exceptional pool of skilled manpower, professionals and executives who are committed to deliver value and satisfaction all the time.

CAUTIONARY STATEMENT:

Statements in the Management Discussion and Analysis describing the Company's objectives, projections, estimates and expectations may be 'forward looking statements' within the meaning of applicable securities laws and regulations. As 'forward looking statements' are based on certain assumptions and expectations of future events over which the Company exercises no control, the Company cannot guarantee their accuracy nor can it warrant that the same will be realized by the Company. Actual results could differ materially from those expressed or implied. Significant factors that could make a difference to the Company's operations include domestic and international economic conditions affecting demand, supply and price conditions in the hospitality industry, changes in government regulations, tax regimes and other statutes.

1333.63

329.49

83.51

70.54

63.07

112.36

7.5

58.12

9.65

775.00

767.16

883.88

3494.22

949.24

2544.91

(*) After considering the exceptional item of Rs. 6.99 lakhs

VELAN HOTELS LTD


Sl.No.

1.

2.

3.

4.

5.

6.

7.

8.

Name of the Directors

Sri.E.V.Muthukumara Ramalingam

Sri.M.R.Gautham

Sri.B.A.Madhusudhan

Smt.M.Sasikala

Sri.P.Ganesan

Sri.T.Gopalakrishnan

Dr.Namasivayam Karthikeyan

Sri.K. Subramaniam

Position

Managing

Director

Executive

Director

Whole-Time

Director

Director

Director

Director

Director

Director

Executive / Non-Executive /

Independent

Executive / Non-Independent



Non-Executive / Non-Independent

Non-Executive / Independent




REPORT ON CORPORATE GOVERNANCE

As required by Clause 49 of the Listing Agreement with Bombay Stock Exchange Limited, a Report on Corporate Governance is furnished below:-

1. COMPANY'S PHILOSOPHY ON CODE OF GOVERNANCE

Velan Hotel is committed to the highest levels of corporate governance practices, which are essential to the enhancement in the stake-holders value and for the very success of the Company. Its corporate governance practices meet stock exchange corporate governance guidelines and other regulatory requirements to ensure transparency and effective governance of the Company.

2. BOARD OF DIRECTORS

The Composition of the Board of Directors is governed by the provisions of the Companies Act, 1956 and listing requirements of Bombay Stock Exchange Limited where the shares issued by the Company are listed. The Board consists of eminent persons with considerable professional expertise and experience. The Statutory and material information are placed before the Board on quarterly basis and thus the Board discharges its responsibility in an effective manner.

a. Present Composition of Board of Directors.

b. Board Meetings and attendance

During the year, 8 Board meetings were held and the dates of Board Meeting were 30/05/2012,

06/06/2012, 13/06/2012, 28/07/2012, 30/10/2012, 13/12/2012, 30/01/2013 and 13/03/2013.

The names and categories of the Directors on the Board, the attendance at Board meetings

during the year and at the last Annual General Meeting and also the number of Directorships

and Committee/Chairmanships held by them in other companies and the shares held by Non-

Executive Directors are given below.

VELAN HOTELS LTD


Directors Board

Meetings

Audit

Committee

Share Transfer/ Shareholders/

InvestorsGrievanceCommittee

Last AGM

Attended

(Yes/No)

No. of shares

Held by Non-

Executive

Directors

There is no inter-se relationship between Directors other than Sri.E.V.Muthukumara Ramalingam, Smt.M.Sasikala and Sri.M.R.Gautham. Sri.E.V.Muthukumara Ramalingam and Smt.M.Sasikala are parents of Sri.M.R.Gautham.

c. Directorship and Membership held in other companies

Name Company Name

Remuneration

Committee


Sri.M.R.Gautham

Sri.P.Ganesan


Dr Namasivayam Karthikeyan

Sri.B.A.Madhusudhan

Smt.M.Sasikala

Sri.K.Subramaniam

8

8

4

8

8

8

8

8

-

-

2

4

4

-

-

-

17

17

-

-

17

-

-

-

-

-

-

-

-

-

-

-

N.A.

N.A.

33050

Nil

Nil

N.A.

2130743

560000

Y

Y

Y

N

Y

Y

Y

Y


Sri.M.R.Gautham

Sri.P.Ganesan



Sri.B.A.Madhusudhan

Smt.M.Sasikala

Sri.K.Subramaniam

Shree Vallee Enterprises Pvt Ltd

Sarju International Limited


Nil

Susira Industries Ltd

Nil

Nil


Statex Engineering Pvt Ltd

Dhansu Engineering Pvt Ltd

3. CODE OF CONDUCT

a) The Company has adopted the Code of Conduct for Directors and Senior Management. This Code of Conduct helps to maintain the standards of business conduct for the Company and ensures compliance with legal requirements by the Company. All the Board Members and Senior Management personnel have affirmed compliance with the Code on an annual basis and same has been posted on the Website of the Company.

b) CEO /CFO Certification

CEO/CFO certification under clause 41 and 49 of the listing agreement entered by Company with Stock Exchange has been submitted to the Board by Managing Director

VELAN HOTELS LTD


4. DETAILS OF REMUNERATION PAID OR PAYABLE TO DIRECTORS DURING 2012-13

The remuneration paid / payable to Managing Director, Executive Director and Whole-Time Director is provided elsewhere in the annual report.

During the year, the Company has not paid any fees by way of sitting fees to Directors towards attending the Board and Committee meetings. The outstation members of the board get reimbursement of traveling and incidental expenses incurred for attending the Board and Committee meetings in accordance with the Articles of Association of the Company.

5. AUDIT COMMITTEE

The Company has an Audit Committee with scope of activities as set out in clause 49 of the Listing Agreement with Bombay Stock Exchange Ltd read with Section 292A of the Companies Act, 1956.

a. Composition

The Audit Committee presently consists of three Independent-Non-Executive Directors viz. Sri.P.Ganesan and Dr.Namasivayam Karthikeyan and Sri.T.Goplakrishnan as Members. Sri.P.Ganesan is the Chairman of the Committee.

b. Terms of reference:

lOverseeing of our Company's financial reporting process and the disclosure of its financial information to ensure that the financial statement is correct, sufficient and credible.

lRecommending to the Board, the appointment, re-appointment and, if required, the replacement or removal of the external auditors that is the statutory auditors, the fixation of audit fees.

lApproval for payment to statutory auditors for any other services rendered by the statutory auditors.

lReviewing, with the management, the annual financial statements before submission to the Board for approval, focusing primarily on;

lChanges, if any, in accounting policies and practices and reasons for the same.

lMajor accounting entries based on estimates, sufficient and credible and on exercise of judgment by management.

lSignificant adjustments made in the financial statements arising out of the audit findings.

lCompliance with listing and other legal requirements relating to financial statements

lDisclosure of any related party transactions.

lQualifications in the draft audit report and

lAny related party transactions that is, transactions of the Company of material nature, with promoters or the management, their subsidiaries or relatives etc that may have potential conflict with the interest of the Company at large

lReviewing, with the management, performance of statutory and internal auditors, adequacy of the internal control systems.

VELAN HOTELS LTD


lTo review with the management, the statement of uses, application of funds raised through an issue, the statements of funds utilized for purposes other than those stated in the offer document / notice and making appropriate recommendations to the Board to take up steps in this matter.

lReviewing the adequacy of internal audit function, if any, including the structure of the internal audit department, staffing and seniority of the official heading the department, reporting structure overage and frequency of internal audit.

lDiscussion with internal auditors any significant findings and follow-up thereon

lReviewing the findings of any internal investigations by the internal auditors into matters where there is suspected fraud or irregularity or a failure of internal control systems of a material nature and reporting the matter to the Board.

lDiscussion with statutory auditors before the audit commences, about the nature and scope of audit as well as post audit discussion to ascertain any of concern.

lTo look into the reasons for substantial defaults in the payment to the depositors, debenture holders, shareholders ( in case of non-payment of declared dividend) and creditors and

lReviewing the Company's financial and risk management policies.

d. Committee meetings

The attendance of the Members at the meetings is stated below.

The Committee met 4 times during the year on 30/05/2012, 28/07/2012, 30/10/2012 and 30/01/2013.

Member

Sri.P.Ganesan



Committee meetings attended

2

4

4

ndThe Chairman of the Committee Sri.P.Ganesan was present at the 22 Annual General Meeting thheld on 12 September, 2012.

6. SHARE TRANSFER & SHAREHOLDERS' / INVESTORS' GRIEVANCE COMMITTEE

a. Composition

The Share Transfer and Shareholders / Investors' Grievance Committee which comprises of Sri.E.V.Muthukumara Ramlingam, Sri.M.R.Gautham and Dr.Namasivayam Karthikeyan.

b. Terms of reference

This committee approves transfers, deletion of the names of deceased share holders, transmission of shares, issue of duplicate share certificates, issue of fresh share certificates as a result of splitting of share certificates and encompasses formulation of shareholders'/investors' servicing policies, looking into redressal of shareholders and investors complaints viz. transfer of shares, non receipt of balance sheet, non receipt of declared dividends etc.,

VELAN HOTELS LTD


Member


Sri.M.R.Gautham


Committee meetings attended

17

17

17

c. Committee meetings

The Share Transfer & Shareholders'/Investors' Grievances Committee met 17 times on 16/04/2012, 28/04/2012, 26/05/2012, 21/07/2012, 11/08/2012, 25/08/2012, 01/09/2012, 08/09/2012, 20/10/2012, 03/11/2012, 24/11/2012, 01/12/2012, 22/12/2012, 05/01/2013, 05/01/2013, 16/02/2013 & 16/06/2013 and approved the share transfer and reviewed the grievances/complaints received and the action taken on the grievances / complaints.

Complaints' status: 01.04.2012 to 31.03.2013

lNumber of shareholders' complaints received during the period : Nil lNumber not solved to the satisfaction of shareholders : NillNumber of pending complaints : Nil

The business transacted at the Share Transfer & Shareholders'/Investors' Grievances Committee meetings are placed before the Board regularly.

The attendance of the Members at the meetings is stated below.

7. REMUNERATION COMMITTEE

a. Composition

This Committee comprises entirely of Independent-Non-Executive Directors from the Board. It presently comprises with Sri.P.Ganesan, Dr.Namasivayam Karthikeyan and Sri.T.Gopalakrishnan.

b. Terms of reference

The role of the Remuneration Committee is to give recommendations to the Board regarding the company's policy and specific remuneration packages of the Managing Director / Whole-time Directors including pension rights and any compensation payments.

c. Committee Meetings.

No meeting was held during the year.

8. GENERAL BODY MEETINGS

i) Last three Annual General Body Meetings were held as per details shown below :

Year

2012

2011

2010

Location

Regd. Office at 41,

Kangayam Road, Tirupur 641 604

Regd. Office at 41,


Regd. Office at 41,


Dateth 12 Day of , 2012

th18 Day of August, 2011

September

th 06 Day of September, 2010

Time

4.45 P.M.

12.30 P.M.

04.45 P.M.

VELAN HOTELS LTD


ii. Special Resolutions:

nd th At the 22 Annual General Meeting of the Company held on 12 September, 2012, no special resolutions were passed.

st thAt the 21 Annual General Meeting of the Company held on 18 August, 2011, no special resolutions

were passed.

th thAt the 20 Annual General Meeting of the Company held on 06 September, 2010, a special resolution has been passed pursuant to provisions of Section 81(1) and other applicable provisions of the Companies Act, 1956 for issue of further shares on Rights basis.

9. DISCLOSURES

1. Disclosure on related party transactions i.e. transactions of the Company with its Promoters, Directors or the Management, Relatives, Bodies Corporate in which the Directors are interested etc., are annexed elsewhere in the Annual Report. There is no materially significant related party transaction that would have been a potential conflict with the interests of the Company at large.

2. No penalties / strictures were imposed on the Company by Stock Exchange or SEBI or any other statutory authorities on any matter relating to the shareholders' complaints, any other matter on account of Non-compliance of any requirements, legal and otherwise during the last three years.

3. In compliance of Clause 49(1)(B) of the Listing Agreement, it is disclosed that the Company does not have any pecuniary relationship or transactions with its Non-Executive Directors during the financial year ended 31st March, 2013.

4. The Company has scrupulously complied with all the mandatory requirements and the Company has at present not adopted the non mandatory requirements of corporate governance except for certain clauses regarding Remuneration Committee. However in line with its policy to ever improve the good corporate governance practices it is proposed to adopt all such practices in due course of time.

5. The Company has established a whistle blower mechanism to provide an avenue to raise concerns, in line with the Company's commitment to the highest possible standards of ethical, moral and legal business conduct.

6. Accounting Standards and Treatment: The accounting treatment as prescribed in the Accounting Standards (AS) has been followed in the preparation of financial statements.

10. MEANS OF COMMUNICATION

Intimation of Board & Annual General Meetings, Quarterly results, dividend announcements, book closure/record dates are intimated to the Bombay Stock Exchange Limited where the Company's shares are listed and also published in the Newspapers either in Business Standard or Trinity Mirror in English and Makkal Kural or Dinamani in Tamil. The Annual Reports are sent by post to the shareholders. Furthermore, the Annual Reports and quarterly results are also sent to those who request for the same.

VELAN HOTELS LTD


11. GENERAL SHAREHOLDER INFORMATION

No dividend is recommended.

1. Annual General Meeting tha. Date : 25 September 2013

b. Time : 4.00 p.m. c. Venue : Registered Office at 41 Kangayam Road,Tirupur 641 604

2. Financial Calendar :Financial reporting for the quarter ending June 30, 2013 : Before July 30, 2013

Financial reporting for the quarter ended September 30, 2013 : Before November 15, 2013 Financial reporting for the quarter ending December 31, 2013 : Before February 15, 2014 Financial reporting for the quarter ending March 31, 2014 : Before May 30, 2014

3. Date of Book Closure : 22-09-2013 to 25-09-2013 (Both days inclusive)

4. Dividend payment :

5. Listing on Stock Exchange : Bombay Stock Exchange Ltd.,& Stock code : 526755

6. Stock price data.

High / Low prices of the shares of the Company quoted during the financial year 2012-13 on Bombay Stock Exchange Ltd is shown below :

Month & Year

April 2012

May 2012

June 2012

July 2012

August 2012

September 2012

October 2012

November 2012

December 2012

January 2013

February 2013

March 2013

High ( Rs.)

23.70

23.50

21.40

22.00

20.95

19.70

18.85

16.35

15.50

15.49

13.88

12.80

Low ( Rs.)

18.25

19.65

17.00

19.20

17.50

17.00

15.00

14.00

13.80

12.82

11.56

9.35

7. Categories of Shareholders as on 31/03/2013

Category of Shareholders

No.of Shareholders

No.of shares % of Holding

Promoters Shareholding (Indian)

Individuals/ Hindu Undivided Family

Bodies Corporate

Sub Total –A

6

1

7

22791696

2826934

25618630

71.302

8.844

80.146

VELAN HOTELS LTD


7. Categories of Shareholders as on 31/03/2013 (Contd.)

Category of Shareholder

Public shareholding InstitutionsMutual Funds/ UTI Non-Institutions

Sub Total - B GRAND TOTAL A+B

Bodies CorporateResident IndividualsIndependent Directors & RelativesNon-Resident IndiansOCBHindu Undivided FamilyClearing Members

No.of Shareholders

2

1158193

451

5620

8396

8403

No.of shares

7000

20215634671286

62255019318

100060511529277

6346089

31964119

% of Holding

0.022

1.22214.614

1.9480.0600.0031.8930.092

19.854

100.000

8. Registrar and Transfer Agents.

Both physical and Demat segments are handled by the Company's Registrar & Share Transfer Agent namely SKDC Consultants Ltd., Kanapathy Towers, 3rd Floor, 1391/A-1, Sathy Road, Ganapathy Post, Coimbatore 641 008.

9. Share Transfer System

The share transfers are registered and returned within the stipulated time, if the documents are in order.

10. Distribution of Shareholdings as on 31/03/2013

Range (Value) No. of

Shareholders

%held

(% No.

of persons)

Face value

of shares (Rs.)

% held

(% Value)

7662

367

175

63

32

21

30

53

8403

91.18

4.37

2.08

0.75

0.38

0.25

0.36

0.63

100.00

10299480

2996370

2665970

1615360

1156670

988600

2241120

297677620

319641190

3.22

0.94

0.83

0.51

0.36

0.31

0.70

93.13

100.00

Up to 5000

5001 to 10000

10001 to 20000

20001 to 30000

30001 to 40000

40001 to 50000

50001 and 100000

100001 and above

TOTAL

11. Demat information as on 31/03/2013

a. No.of shares dematerialized - 3,06,742,354b. % Total Capital - 95.96%c. No.of share certificates dematerlised - 22,120d. % of Total certificates - 68.76%

12. Reconciliation of Share Capital Audit

The Company gets the Report of Reconciliation of Share Capital Audit done by a Practising Company Secretary for the purpose of reconciliation of the total Equity Capital in tallying with both the Depositories and in physical form with the total paid up capital as per the books. The Report of Reconciliation of Share Capital Audit is placed before the Board of Directors on a quarterly basis and is also sent to the Bombay Stock Exchange Ltd where the Company's shares are listed.

13. Details on use of public funds obtained in the last three years

During the year under review, no fund has been raised.

14. Outstanding GDR/ADR/Warrants and convertible bonds, conversion date and likely impact on equity.

The company has not issued any GDR/ADR or convertible bonds.

15. Location of Hotels : 1. Velan Hotel-Greenfields 41 Kangayam Road, Tirupur 641 604

2. Velan Hotel-Coonoor Bedford, Ritz Road, Coonoor - 643 101

16. Location of Restaurants : 1. Velan Uthara Restaurant Avanashi Road, Behind IDBI Bank Ltd, Tirupur 641 602

2. The Velan Food Park Ram Nagar, Coimbatore 641 009

17. Address for correspondence : Velan Hotels Limited

41 Kangayam Road, Tirupur 641 604,Tamil NaduPhone Nos: (+91/0)(421) 2424426 to 30 & 4311111Fax Nos:(+91/0)(421) 2424434 & 2424444E-Mail : [email protected] & [email protected]

Website : www.velanhotels.com

18. Compliance Officer : Mr.M.Srinivasan Company Secretary

VELAN HOTELS LTD



Place : Tirupur E.V. Muthukumara RamalingamDate : 30.05.2013 Managing Director

ANNUAL CERTIFICATION BY MANAGING DIRECTOR PURSUANT TO CLAUSE 49 1(D)(ii) OF THE LISTING AGREEMENT

As the Managing Director of Velan Hotels Limited and as required pursuant to Clause 49 I(D)(ii) of the Listing Agreement, I hereby declare and certify that all the Board Members and Senior Management Personnel of Velan Hotels Limited have affirmed compliance with the Code of Conduct adopted by the Company for the year 2012-13

For and on behalf of the Board.

E.V.Muthukumara RamalingamManaging Director

Place : Tirupur Date : 30.05.2013

P.S.Krishnan & CoChartered Accountants

40A, Appachinagar Main Road ,Tirupur 641 607.

Phone: 0421 - 2227526 to 30 E-mail : [email protected]

COMPLIANCE CERTIFICATE FROM THE AUDITORS OF THE COMPANY

The Board of Directors,M/s. Velan Hotels Limited,41, Kangayam Road,Tirupur - 641 604

Place : Tirupur for P.S.Krishnan & CoDate : 30.05.2013 Chartered Accountants

FRN 001532S

(G.Krishnamurthi) Partner (Membership No: 23896)

We have reviewed the implementation of Corporate Governance procedures by M/s .Velan Hotels Limited, Tirupur during the year ended 31st March, 2013 with the relevant records and documents maintained by the Company, furnished to us for our review and the report of Corporate Governance as approved by the Board of Directors.

The compliance of conditions of Corporate Governance is the responsibility of the Management. Our examination was limited to procedures and implementation thereof, adopted by the Company for ensuring the compliance of the conditions of the Corporate Governance. It is neither an audit nor an expression of opinion on the financial statements of the Company.

We have conducted our review on the basis of the relevant records and documents maintained by the Company and furnished to us for the review and the information and explanations given to us by the Company.

Based on such a review, in our opinion, the Company has complied with the conditions of the Corporate Governance, as stipulated in Clause 49 of the Listing Agreement.

As required by the Guidance Note issued by the Institute of Chartered Accountants of India, we have to state that based on the reports given by the Registrars to the Company to the Investors Grievances Committee, as on March 31,2013, there were no investor grievance matters against the Company remaining unattended / pending for more than 30 days.

We further state that such compliance is neither an assurance as to the future viability of the Company, nor as to the efficiency or effectiveness with which the Management has conducted the affairs of the Company.

VELAN HOTELS LTD



40A,Appachinagar Main Road ,Tirupur 641 607.

Phones: 0421 - 2227526 to 30 E-mail : [email protected]

VELAN HOTELS LTD


AUDITOR'S REPORT

REPORT TO THE SHAREHOLDERS OF VELAN HOTELS LIMITED.

the Management, as well as

evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our

audit opinion.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the financial

statements give the information required by the Act in the manner so required and give a true and fair view

in conformity with the accounting principles generally accepted in India:-

st(i) in the case of the Balance Sheet, of the state of affairs of the Company as at 31 March 2013;(ii) in the case of the Statement of Profit and Loss, of the Profit for the year ended on that date; and(iii) in the case of Cash Flow Statement, of the Cash Flow for the year ended on that date

Report on the Financial Statements

We have audited the accompanying financial statements of M/s.Velan Hotels Limited which comprise the

Balance Sheet as at 31st March 2013, the Statement of Profit and Loss and Cash Flow Statement for the

year then ended and a summary of significant accounting policies and other explanatory information.

Management's Responsibility for the Financial Statements

The Management is responsible for the preparation of these financial statements that give a true and fair

view of the financial position, financial performance of the Company in accordance with the Accounting

Standards referred to in sub-section(3C) of Section 211 of the Companies Act, 1956. This responsibility

includes the design, implementation and maintenance of internal control relevant to the preparation and

presentation of the financial statements that give a true and fair view and are free from material

misstatement, whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted

our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of

India. Those standards require that we comply with ethical requirements and plan and perform the audit to

obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the

financial statements. The procedures selected depend on the Auditor's judgment, including the

assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

In making those risk assessments, the Auditor considers internal control relevant to the Company's

preparation and fair presentation of the financial statements in order to design audit procedures that are

appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting

policies used and the reasonableness of the accounting estimates made by




VELAN HOTELS LTD


Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order, 2003, as amended, issued by the Central

Government of India in terms of sub-section (4A) of Section 227 of the Act, we give in the Annexure, a

statement on the matters specified in paragraphs 4 and 5 of the said Order.

2. As required by Section 227(3) of the Act, we report that:

a. We have obtained all the information and explanations which to the best of our knowledge and

belief were necessary for the purpose of our audit;

b. In our opinion proper books of accounts as required by law have been kept by the Company so

far as appears from our examination of those books;

c. The Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this

report are in agreement with the books of account;

d. In our opinion, the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement

comply with the Accounting Standards referred to in sub-section(3C) of Section 211 of the

Companies Act,1956; and

ste. On the basis of written representations received from the Directors as on 31 March, 2013 and sttaken on record by the Board of Directors, none of the directors is disqualified as on 31 March,

2013, from being appointed as a director in terms of clause(g) of sub-section(1) of Section 274

of the Companies Act, 1956.

Place: Tirupur for P.S.Krishnan & CoDate : 30.05.2013 Chartered Accountants

FRN 001532S





VELAN HOTELS LTD


Annexure

(i) In respect of Fixed Assets :

(a) The Company is maintaining proper records showing full particulars including quantitative details and situation of Fixed Assets.

(b) The Fixed Assets have been physically verified by the Management at reasonable intervals and we are informed that no material discrepancies have been noticed on such verification.

(c) There is no disposal of fixed assets during the year under consideration.

(ii) In respect of Inventories :

(a) Stock of stores, provisions, crockeries, beverage, etc., have been physically verified by the Management at reasonable intervals during the year.

(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 of the Company and the nature of its business.

(c) The Company is maintaining proper records of inventory and no material discrepancies have been noticed on physical verification of inventory as compared to book records.

(iii) (a) The Company has not granted any loan to companies, firms or other parties listed in the Register maintained under section 301 of the Companies Act, 1956. and hence the provisions of clause 4(iii)(b),(c)&(d) are not applicable.

(b) The company has taken loans (unsecured) from companies, firms, or other parties covered in the Register maintained u/s 301 of the Act.1. No. of Parties : 22. Aggregate amount : Rs. 515.30 Lakhs

(c) In our opinion, the terms and conditions are not prima facie prejudicial to the interest of the Company.

(d) The Company is regular in the repayment of both the principal and the interest.

(iv) In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the company and the nature of its business for the purchase of Inventory and Fixed Assets and for the Sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control system.

v) (a) According to the information and explanations given to us, we are of the opinion that the particulars of contracts and arrangements that need to be entered in the Register maintained under section 301 of the Companies Act, 1956 have been so entered.

(b) In our opinion and according to the information and explanations given to us, the transactions during the year, made in pursuance of contracts or arrangements entered in the Register maintained under Section 301 of the Companies Act, 1956, are at prices which are reasonable having regard to the prevailing market prices at the relevant time.

(vi) The Company has not accepted any deposit from the public and hence clause 4(vi) of the Order is not applicable.

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

(viii) The Central Government has not prescribed the maintenance of cost records for the products of the Company under section 209(1)(d) of the Companies Act, 1956.

VELAN HOTELS LTD


(ix) In respect of statutory dues:

(a) Except in the case of Provident Fund and Employees State Insurance, the Company is regular in depositing the undisputed statutory dues including Income tax, Sales tax, Wealth tax, Service tax, Customs Duty and Cess and other statutory dues with appropriate authorities.

(b) In our opinion and according to the information and explanations given to us, there are no disputed statutory dues including Income tax, Sales tax, Wealth tax, Service tax, Customs Duty and Cess as at the year end.

(x) The Company does not have accumulated losses as at year end. The Company has not incurred cash losses in the financial year covered by our audit and in the immediately proceeding financial year.

(xi) The Company has not defaulted in repayment of dues to Banks.

(xii) In our opinion and according to the information and explanations given to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) In our opinion, the Company is not a Chit Fund or a Nidhi/Mutual Fund/Society and therefore, the provisions of clause 4(xiii) of the Companies (Auditor's Report) Order, 2003 are not applicable to the Company.

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

(xv) In our opinion and according to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks/financial institutions during the year.

(xvi) During the year term loans raised have been used for the purpose for which the loan is availed.

(xvii) In our opinion and according to the information and explanations given to us and also on an overall examination of the Balance Sheet of the Company, the funds raised during the year on short term basis have not been used for long term investments and vice versa.

(xviii)In our opinion and according to the information and explanations given to us, the Company has not made any preferential allotment of shares to parties and Companies covered in the Register maintained under section 301 of the Companies Act, 1956, during the year.

(xix) The company has not issued any debentures and hence clause 4(xix) of the Companies (Auditor's Report) Order 2003, is not applicable to the Company.

(xx) During the year ,the Company has not raised any money by way of public issue.

(xxi) According to the information and explanations given to us, no fraud on or by the Company has been reported during the year.

Place: Tirupur for P.S.Krishnan & CoDate : 30.05.2013 Chartered Accountants

FRN 001532S


BALANCE SHEET AS AT 31.03.2013

PARTICULARS NOTENO.

AS AT 31.03.2013

Rs.

AS AT 31.03.2012

Rs.

Schedules 1 to 27 form part of Annual Accounts "As per our report of even date"For P.S. KRISHNAN & Co.,Chartered Accountants (FRN 001532S)G. Krishnamurthi Partner (Membership No: 23896)

Place: Tirupur Date : 30.05.2013

E.V. Muthukumara RamalingamManaging Director

M.R. GauthamExecutive Director

M. SrinivasanCompany Secretary

VELAN HOTELS LTD


I. EQUITY AND LIABILITIES

(1) Shareholders' Funds

(a) Share Capital

(b) Reserves and Surplus

(2) Non-Current Liabilities

(a) Deferred Tax Liabilities (Net)

(b) Long Term Borrowings

(d) Other Long Term Provisions

(3) Current Liabilities

(a) Short Term Borrowings

(b) Trade Payables

(c) Other Current Liabilities

(d) Short -Term Provisions

Total

II. ASSETS

(1) Non-Current Assets

(a) Fixed Assets

(i) Tangible Assets

(ii) Capital Work-in-Progress

(b) Long-Term Loans and Advances

(2) Current Assets

(a) Inventories

(b) Trade Receivables

(c) Cash and Cash Equivalents

(d) Short-Term Loans and Advances

Total

Notes on Accounts

Significant Accounting Policies

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

26

27

31,96,41,190

40,98,04,131

2,95,17,244

78,69,17,813

39,41,680

3,09,35,388

65,36,514

6,56,08,912

20,13,727

165,49,16,599

66,27,79,885

96,41,41,112

1,28,14,449

60,76,793

25,74,695

26,82,748

38,46,917

165,49,16,599

31,96,41,190

40,43,93,674

2,81,15,016

57,53,14,503

37,05,484

1,61,99,156

57,68,730

4,58,04,679

24,66,579

140,14,09,011

66,29,53,991

58,90,36,556

10,43,50,933

53,77,135

32,08,582

3,34,89,518

29,92,294

140,14,09,011

PARTICULARS NOTENO.

YEAR ENDED ON31.03.2013

Rs.


Rs.

STATEMENT OF PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED ON 31.03.2013

VELAN HOTELS LTD


I. Revenue from Operations (Gross) Less : Excise Duty Revenue from Operations (Net)

II. Other Income

III. Total (I + II)

IV. Expenses Cost of Supplies Consumed House Keeping & Laundry Expenses Power & Fuel Employee Benefits Expenses Repairs and General Maintenance Finance Cost Other Expenses Depreciation Total Expenses

V. Profit Before Exceptional Item and Tax (III-IV)

VI. Exceptional Items

VII Profit Before Tax (V+VI)

VIII. Extra-Ordinary Items

IX Less: Tax Expenses 1) Current Tax 2) Tax relating to prior years 3) MAT Entitlement 4) Deferred tax X. Profit for the year

XI. Earning per share (Rs.10/- per share) (a) Basic / Weighted Average (b) Diluted Notes on AccountsSignificant Accounting Policies

14,17,65,4180

14,17,65,418

28,29,571

14,45,94,989

2,85,22,65522,11,194

2,94,87,6902,81,54,8331,02,77,840

81,28,5481,88,17,880

91,55,73613,47,56,376

98,38,613

6,98,864

1,05,37,477

0

21,10,0004,23,3234,92,605

14,02,22861,09,321

0.190.00

16

17

1819202122232425

2627

14,69,80,2470

14,69,80,247

11,31,137

14,81,11,384

3,52,11,48131,68,535

2,42,62,2762,63,55,184

77,77,30990,98,757

1,83,10,27189,86,336

13,31,70,149

1,49,41,235

6,98,864

1,56,40,099

0

31,30,0009,28,273

22,48,855-50,184

93,83,155

0.530.00






PARTICULARS AS AT31.03.2013

Rs.

AS AT31.03.2012

Rs.

NOTES FORMING PART OF FINANCIAL STATEMENTS FOR THE YEAR 2012 - 2013

VELAN HOTELS LTD


SHARE CAPITAL AUTHORISED 5,00,00,000 Equity Shares of Rs.10/- each

ISSUED, SUBSCRIBED AND FULLY PAID-UP 3,19,64,119 Equity Shares of Rs.10/- each

Total

(a) Reconciliation of Number of Shares - Shares outstanding as at 01.04.2012/01.04.2011 - Issued during the year - Shares outstanding as at 31.03.2013/31.03.2012

(b) List of shareholders holding more than 5% of the total number of shares issued by the Company:

Name of the Share holders : 1. Sri.E.V.Muthukumara Ramalingam 2. Sri.M.R.Gautham 3. M/s. Shree Vallee Enterprises Private Limited 4. Smt.M.Sasikala

(c) The Company has only one class of shares i.e. equity shares with equal voting rights.

RESERVES AND SURPLUS

(a) Capital Reserve

Revaluation Reserve (Reserves created out of revaluation of Land & Building situated at Tirupur) Less: Depreciation on revalued assets

(b) Surplus in Statement of Profit and Loss Opening balance Add: Profit for the year Closing balance

(c) Other Reserve Security Premium Account

Total (a+b+c)

No. of Shares No. of Shares

50,00,00,00050,00,00,000

31,96,41,190

31,96,41,190

3,19,64,1190

3,19,64,119

1,26,78,38364,20,75028,26,93421,30,743

7,16,83,901

77,75,580

6,39,08,321

2,50,02,94261,09,321

3,11,12,263

31,47,83,54731,47,83,547

40,98,04,131

50,00,00,00050,00,00,000

31,96,41,190

31,96,41,190

77,50,0002,42,14,1193,19,64,119

1,26,78,38364,20,75028,26,93421,30,743

7,16,83,901

70,76,716

6,46,07,185

1,56,19,78793,83,155

2,50,02,942

31,47,83,54731,47,83,547

40,43,93,674

NOTE : 1

NOTE : 2


Rs.

AS AT31.03.2012

Rs.


VELAN HOTELS LTD


NOTE : 3 DEFERRED TAX LIABILITY Opening Balance Provision / (Reversal) Closing Balance

NOTE : 4 LONG-TERM LIABILITES a) Term Loans - From Banks From Others b) Loans and Advances from Related parties c) Deposits

Provision for Employee Benefits

NOTE : 5 OTHER LONG TERM PROVISIONS

NOTE : 6 SHORT TERM BORROWINGS (a) Current maturities of long-term debt

(b) Interest accrued and due on borrowing

(c) Overdrawn Account

NOTE : 7 TRADE PAYABLES Trade Payable

NOTE : 8 OTHER CURRENT LIABILITIES (a) Unpaid Dividend (b) Statutory Liabilities (c) Other Payables (d) Capital Goods Liability (f) Advance / Progress Payments from Customers

NOTE : 9 SHORT - TERM PROVISIONS (a) Provision for Taxation - Income Tax

2,81,15,01614,02,228

2,95,17,244

71,28,98,70021,497

5,15,30,4032,24,67,213

78,69,17,813

39,41,68039,41,680

1,66,65,140

9,102

1,42,61,146 0

3,09,35,388

65,36,514

65,36,514

13,11,28027,67,79371,48,172

5,37,47,4826,34,185

6,56,08,912

20,13,727

20,13,727

2,81,65,200-50,184

2,81,15,016

56,64,53,3983,05,803

28,31,71257,23,590

57,53,14,503

37,05,48437,05,484

1,61,49,147

50,009

1,61,99,156

57,68,730

57,68,730

13,18,13523,77,89069,65,837

3,49,73,6951,69,122

4,58,04,679

24,66,579

24,66,579

NOTE NO:10FIXED ASSETS

VELAN HOTELS LTD



Description of Assets Gross Block

As at01.04.2012

Upto01.04.2012

As at31.03.2013

Upto31.03.2013

As at31.03.2013

As at31.03.2012

Additions For the yearDeletions Withdrawn

Depreciation Net Block

Land

Building

Plant & Machinery

Furniture & Fittings

Vehicles

TOTAL

450150385

209540632

74343416

34886977

4799256

773720666

0

416336

1266348

130666

7168280

8981630

0

0

0

0

0

0

450150385

209956968

75609764

35017643

11967536

782702296

0

41777104

50298099

17062552

1628920

110766675

0

3407113

2842837

2353428

552358

9155736

0

45184217

53140936

19415980

2181278

119922411

450150385

164772751

22468828

15601663

9786258

662779885

450150385

167763528

24045317

17824425

3170336

662953991

LONG-TERM LOANS AND ADVANCES (Unsecured,considered good) (a) Capital Advances (b) Deposit with others (c) Other Non-Current Assets (d) MAT Entitlement (e) Other bank balance -Deposits

INVENTORIES (a) Stores and Provisions (Valued at Lower of cost or market price and as certified by the Management)

TRADE RECEIVABLES Unsecured,considered good*

CASH AND CASH EQUIVALENTS Cash on hand Balance with bank - Current accounts - Unpaid Dividend Accounts Other bank balances - Deposits

SHORT-TERM LOANS AND ADVANCES Unsecured,considered good (Advances recoverable in cash or kind or for value to be received) (a) Advances - others (b) Balance with Revenue Authorities


Rs.

AS AT31.03.2012

Rs.

(*Includes an amount of Rs.219169 (P.Y.5,74,500) outstanding for a period exceeding six months from the date they became due)

NOTE : 11

NOTE : 12

NOTE : 13

NOTE : 14

NOTE : 15

28,87,26725,24,35513,00,12154,38,540

6,64,1661,28,14,449

60,76,793

60,76,793

25,74,69525,74,695

8,24,4335,50,645

13,07,6700

26,82,748

12,00,21826,46,69938,46,917

9,17,39,91753,88,75012,81,12159,31,145

10,00010,43,50,933

53,77,135

53,77,135

32,08,58232,08,582

2,10,1842,74,94,855

13,11,30044,73,179

3,34,89,518

16,82,85913,09,43529,92,294

(In Rs.)

0

0

0

0

0

0

6,16,11,8491,85,030

6,62,63,7711,10,47,690

02,48,929

38,43,14011,16,46911,77,12514,86,244

14,69,80,247

4,57,6985,17,835

25,79349,08031,505

4,44524,29220,489

11,31,137

79,81,9883,26,06,6284,05,88,616

53,77,1353,52,11,481

23,02,3228,66,213

31,68,535

87,25,02721,71,68271,83,11140,56,243

7,63,71813,62,495

2,42,62,276


Rs.

AS AT31.03.2012

Rs.


VELAN HOTELS LTD


REVENUE FROM OPERATIONS

Sale of Services a) Guest Accomodation b) Others

Sale of Products a) Food & Beverage b) Liquor

Other Operative Services a) Healthclub b) Taxi Hire c) Swimming Pool Income d) Service Charges e) Laundry Receipts f) Telephone Charges Receipts

OTHER INCOME a) Interest Receipts b) Miscellaneous Income c) Sundry Balance w/back d) Other Income e) Profit on Sale of Assets f) Rounded Off g) Forex Gain h) Commission

COST OF SUPPLIES CONSUMED Opening Stock Purchases

Less: Closing Stock

HOUSEKEEPING AND LAUNDRY EXPENSES Housekeeping Expenses Laundry Expenses

POWER & FUEL Electricity Charges Diesel & Lubricants Firewood Gas Charcoal Water

NOTE : 16

NOTE : 17

NOTE : 18

NOTE : 19

NOTE : 20

6,48,79,3781,74,000

5,57,90,5761,08,90,718

9025,635

37,63,25410,30,71010,03,19942,07,858

14,17,65,418

2,48,47011,20,24511,09,7693,50,001

01,086

00

28,29,571

53,77,1352,92,22,3133,45,99,448

60,76,7932,85,22,655

17,60,0274,51,167

22,11,194

85,56,64276,38,24467,10,15245,89,1175,94,144

13,99,3912,94,87,690

2,20,45,416

7,69,885

20,38,339

6,21,011

8,80,533

2,63,55,184

17,51,694

56,17,103

4,08,512

77,773,09

2,48,21,606

7,00,961

6,87,886

11,85,897

7,58,483

2,81,54,833

20,79,061

78,94,870

3,03,909

1,02,77,840


Rs.

AS AT31.03.2012

Rs.


VELAN HOTELS LTD


EMPLOYEE BENEFITS EXPENSES

Salary & Wages

Bonus & Ex-Gratia

Gratuity & Leave Salary

Staff Welfare Expenses

Contribution to Statutory Funds

NOTE : 21

NOTE : 22

NOTE : 23

NOTE : 24

REPAIRS AND GENERAL MAINTENANCE

Building

Machinery

Others

FINANCE COST

Term Loan Interest

Working Capital Loan Interest

Financial Charges

Other Interest

Bank Charges

OTHER EXPENSES

a) Selling Expenses

Advertisement

Credit card service charges

Business promotion expenses

Discount

b) Administrative expenses

Filing Fee

Telephone Charges

Printing & Stationery

Miscellaneous Expenses

Postage & Telegram

Bank Charges

63,44,478

5,12,336

3,40,511

0

9,31,223

81,28,548

4,48,535

4,454

9,47,681

5,14,591

11,98,367

15,000

11,11,289

8,71,175

2,55,636

1,57,283

8472953

13,233

1,13,964

4,03,894

94,713

90,98,757

5,99,790

21,752

8,95,920

7,32,640

11,94,115

8,90,123

11,74,517

11,77,097

4,67,297

2,42,978


Rs.

AS AT31.03.2012

Rs.

FORMING PART OF FINANCIAL STATEMENTS FOR THE YEAR 2012 - 2013

VELAN HOTELS LTD


Periodicals & News papers

Carriage Inward

Donation

Professional Fees

Lease Rent

Rates,Taxes and Legal Fee

Travelling & Conveyence

Insurance

Pooja Expenses

Subscription

Remuneration to Auditors :

Statutory Audit

Tax Audit

Taxation Matters

Certification work

Others & Service Tax

Internal Audit Fee

Loss on Sale of Assets

Share Transfer Expenses

Vehicle Running Expenses

Security Service Charges

DEPRECIATION

Building

Plant & Machinery

Furniture & Fittings

Vehicles

NOTE : 24 (Contd.)

NOTE : 25






Service Charges Paid

82,173

1,64,659

0

6,95,676

19,57,800

39,47,655

12,37,809

6,66,364

1,67,433

30,700

60,000

25,000

40,000

32,000

60,600

2,40,000

0

1,27,705

18,65,370

18,42,401

50,525

1,88,17,880

34,07,113

28,42,837

23,53,428

5,52,358

91,55,736

1,09,822

1,94,005

500

1,94,560

27,36,500

28,49,868

9,33,098

4,68,744

99,475

30,662

50,000

25,000

40,000

34,500

12,000

1,18,500

8,612

1,27,416

21,14,772

7,66,008

0

1,83,10,271

33,55,202

27,47,497

23,39,756

5,43,881

89,86,336

6,48,79,3785,57,90,5761,08,90,718

42,07,85888,26,459

14,45,94,989

49,72,1154,05,020

53,77,135

58,50,7292,26,063

60,76,793

2,45,88,68039,33,975

2,85,22,655

6,16,11,8496,62,63,7711,10,47,690

14,86,24477,01,829

14,81,11,383

77,14,7972,67,191

79,81,988

49,72,1154,05,020

53,77,135

3,16,23,25935,88,222

3,52,11,481

Particulars2012-13

Rs.

2011-12Rs.

VELAN HOTELS LTD


NOTE : 26ADDITIONAL NOTES

a. Estimated amount of the contracts remaining to be executed on capital account and not provided for : Not ascertainable.(Previous Year - not ascertainable)

b. The Company has not given any guarantees. c. Contingent Liabilities not provided for in the books of accounts Rs.Nil. (Previous year Rs. Nil)

d. Expenditure on employees who are in receipt of remuneration of not less than Rs. 60,00,000/- per annum (previous year Rs. 60,00,000/- per annum) when employed throughout the year or Rs. 5,00,000/- per month (previous year Rs. 5,00,000/- per month) when employed for part of the year is Nil (previous year Rs. Nil.)

e. Previous year figures have been regrouped and/or reclassified wherever necessary.

f. The figures have been rounded off to the nearest Rupee.

g. Balances in Sundry Debtors, Creditors and Loans & Advances are subject to confirmation and reconciliation and are stated at the book balance thereof.

h. In the opinion of the Management, the Current Assets, Loans & Advances will fetch the amount as stated, if realized in the ordinary course of its business.

i. Income of the Company includes the following :

Guest AccommodationFoods & Beverage SalesWine & LiquorTelephone ReceiptsOthers

Provisions, & Supplies Wine & Liquor

ii) Closing Stock Provisions & Supplies Wine & Liquor

iii) Consumption Provisions & Supplies Wine & Liquor

i) Opening Stock

iv) Break-up of consumption of Provisions and Stores & Supplies into imported and Indigenous.

2012- 2013 2011-2012

PROVISIONS & SUPPLIES

ImportedIndigenous

ValueRs.

Percentage%

ValueRs.

Percentage%

Nil2,85,22,655

Nil100%

Nil3,52,11,481

Nil100%

VELAN HOTELS LTD


j TERM LOANS :

1.

Secured by way of Hypothecation of entire fixed assets of the Company - both existing and future, Equitable Mortgage of hotel properties at Tirupur and Coonoor and Hypothecation of entire current assets of the Company. The loans are also personally guaranteed by the Managing Director & Executive Director of the Company.

2. Sundaram Finance Limited

Secured by way hypothecation of Vehicle of the Company.

Allahabad Bank and Andhra Bank :

k.

(As reported by the management to the Department of Tourism but not verified by the Auditors)

Rs. 291.39 LakhsRs. 301.80 Lakhs

2012-13 2011-12

L. CIF VALUE OF IMPORTS

2012-13 2011-12

m. The Company has called for details of applicability from trade parties from the provisions of Micro, Small and Medium Enterprises Development Act, 2006. However, no reply has been received from any of the parties. In view of the above, no disclosure is made under Micro, Small and Medium Enterprises Development Act, 2006.

n. During the year, a sum of Rs.21,10,000/- has been provided in the books of accounts towards Income Tax.

o. Earning per share :

a. Basic earnings per share are calculated by dividing the net profit attributable to the share holders by the weighted average number of ordinary shares outstanding during the year.

a) Capital Goods Nil Rs. 39.36 Lakhs

EARNING IN FOREIGN EXCHANGE

31. 03. 2013Rs.

31. 03. 2012Rs.

VELAN HOTELS LTD


stp. Net Deferred Tax in respect of the year ending 31 March, 2013 debited to Profit and Loss Account and stNet Deferred Tax Liability as on 31 March, 2013 are computed as below :

DEFERRED TAX LIABILITY Rs.in Lakhs

S.No Particulars Opening Balance

Providedduring the year

Closing Balance

Depreciation on account of difference in Depreciation under Income Tax Act and books of accounts

281.15

281.15

14.02

14.02

295.17

295.17

1

b. The following reflects the income and share data used by the Company for this calculation of basic earnings per share :-

Net Profit for the yearNet Profit for the year attributable to equity share holders.No. of equity shares (In Numbers)Earnings per share/ Weighted Average (Rs.)Nominal value per share (Rs.)

1,05,37,47761,09,321

3,19,64,1190.1910/-

1,56,40,09993,83,155

3,19,64,1190.5310/-

q. The Company is exclusively engaged in the business of Hotelering. This, in context of Accounting Standard 17 on Segment Reporting issued by The Institute of Chartered Accountants of India (ICAI) is considered to constitute one single primary segment and accordingly no segment information as required under Accounting Standard 17 is furnished.

r. Related Party Transactions.The following are the transactions with related parties in terms of Accounting Standard 18 Issued by the ICAI

TOTAL (A)

s. Notes 1 to 27 form an integral part of the annual accounts.

Key managerial persons

Sri. E.V. Muthukumara Ramalingam, Managing Director

Sri. M.R. Gautham, Executive Director

Sri. B.A. Madhusudan, Whole Time Director

Nature of Transaction

Unsecured Loans

Managerial Remuneration

Interested concerns

M/s.Shree Vallee Enterprises Pvt. Ltd.

Key Management Persons

Rs. 5,15,30,403

Rs. 46,00,000

VELAN HOTELS LTD


NOTE - 27

SIGNIFICANT ACCOUNTING POLICES

a) Basis of Presentation :

The financial statements have been prepared under the historical cost convention, on an accrual basis and in accordance with generally accepted accounting principles generally accepted in Indian (Indian GAAP) and comply with mandatory Accounting Standards notified by the Central Government of India under the Companies (Accounting Standard) Rules 2006 and the relevant provisions of the Companies Act,1956 to the extent applicable except for certain fixed assets which have been revalued. The Accounting is on the basis of a going concern concept.

b) Revenue Recognition :

Income from guest accommodation is recognized on a day to day basis after the guest checks into the hotel. Sale of food and beverage is recognized at the point of serving those items to the guest. Sales exclude amount recovered towards taxes.

c) Foreign Currency Transactions :

Foreign Currency Transactions are recorded in the reporting currency, by applying to the foreign currency amount the exchange rate prevailing at the time of transaction. Closing balances of current assets and current liabilities are converted at the rates of exchange prevailing at the end of the year. Any increase/decrease arising out of the above is adjusted to the profit and loss account.

d) Fixed Assets

Fixed Assets are stated at historical cost of acquisition, which is inclusive of freight, installation charges and other incidental expenses or at revalued amounts wherever such assets have been revalued.

Advances paid towards the acquisition of fixed assets outstanding at each balancesheet date are disclosed as "Capital Advances" under Long Term Loans and Advances and cost of fixed assets not ready to use before such date are disclosed under "Capital-Work-in-Progress"

e) Depreciation

a. Depreciation is provided under straight line method on assets on pro-rata basis at the rates specified in Schedule XIV to the Companies Act, 1956.

VELAN HOTELS LTD


b. Deprecation on assets revalued in the year is calculated on its revalued figure on Straight Line Method at the rates specified in Schedule XIV to the Companies Act, 1956. The additional charge of depreciation on account of revaluation is deducted from revaluation reserve and credited to the Profit and Loss Account.

c. Assets costing less than Rs.5000 are fully depreciated in the year of addition.

f) Valuation of Inventory :

Provisions and Supplies are valued at cost or net realizable value. Cost Includes all direct costs and applicable overheads to bring the goods to the present location and condition. Wherever the net realizable value is less than such cost, the net realizable value is adopted for valuation.

g) Employee Benefits

1. Defined Contribution PlanContributions to Provident and Other Statutory Funds are recognized in the Profit & loss account

2. Defined Benefit PlanCompany's liabilities towards gratuity and leave encashment are determined on actuarial valuation basis. Obligation is measured at the year end as present value of future cash flows using a discounted rate.

3. Short Term BenefitsShort term employee benefits are recognized as expenses as per the company's scheme based on expected obligation on undiscounted basis.

h) Contingencies and events occurring after the date of Balance sheet

Events, where material, occurring after the date of the balance sheet are considered upto the date of approval of accounts

i) Contingent Liabilities

Contingent liabilities are not recognized, but are disclosed in the notes.Contigent assets are neither recognized nor disclosed in the financial statements.

j) Net Profit for the period, Prior period items and changes in Accounting Polices

Prior period adjustments and extraordinary items having material impact on the financial affairs of the company are disclosed separately.

k) Borrowing Cost

Borrowing costs are capitalized as part of qualifying fixed assets when it is possible that they will result in future economic benefits. Other borrowing costs are expensed.

m) Taxation

Current tax is determined as the amount of tax payable in respect of taxable income for the year based on applicable tax rates and laws. Deferred Tax is recognized subject to consideration of prudence in respect of deferred tax assets, on timing difference, being the difference between taxable income and accounting income that originates in one period and are capable of reversal in one or more subsequent periods. At the year end, deferred tax assets and deferred tax liabilities are netted off in the balance sheet.

CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH 2013

PARTICULARS

VELAN HOTELS LTD



Rs.


Rs.

A. Cash Flow from operating Activities

Net Profit Before Tax

Add : Extra Ordinary Items

Loss on sale of assets

Less: Extra Ordinary Items

Short provision towards taxation

Profit on sale of assets

Adjustment for :

Depreciation

Interest Receipts

Finance cost

OPERATING PROFIT BEFORE WORKING CAPITAL CHANGES

Adjustment for changes in

1) (Increse)/Decrease in Trade Receivables

2) (Increse)/Decrease in Inventories

3) (Increse)/Decrease in Short term loans & Advances

4) (Increse)/Decrease in Long term loans & Advances

5) Increse/(Decrease) in Trade Payables

6) Increse/(Decrease) in Other Payables

Cash generated from operations

Less : Taxes paid

Gratuity and Leave salary and Bonus paid

NET CASH FLOW FROM OPERATING ACTIVITIES(A)

B. CASH FLOW FROM INVESTING ACTIVITIES

Capital Expenditure

Proceeds from sale of fixed assets

NET CASH USED IN INVESTING ACTIVITIES (B)

0

4,23,323

0

84,56,872

2,48,470

81,28,548

6,33,887

-6,99,658

-8,54,621

9,13,08,741

7,67,784

2,04,92,119

28,27,714

4,51,690

38,40,86,186

0

1,05,37,477

0

1,05,37,477

4,23,323

1,01,14,154

1,68,33,890

2,69,48,044

11,16,48,251

13,85,96,296

32,79,404

13,53,16,892

38,40,86,186

-24,87,69,295

0

8,612

9,28,273

31,505

82,87,472

4,57,698

90,98,757

-6,36,957

26,04,853

-34,273

-2,65,87,712

-1,91,83,76

3,09,23,475

36,93,985

20,48,290

83,33,44,541

21,56,005

1,56,40,099

8,612

1,56,48,711

9,59,778

1,46,88,933

1,78,43,927

3,25,32,860

43,51,010

3,68,83,870

57,42,275

3,11,41,595

8,311,88,536

-8,000,46,941

90,98,757

4,57,698

54,38,962

9,42,933

-36,66,19,540

10,86,444

-48,42,59,737

52,94,528-21,79,62,524

-3,08,06,770

3,34,89,518

26,82,748

81,28,548

2,48,470

0

0

-21,16,03,310

-1,47,36,232

0

0

CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH 2013

PARTICULARS

VELAN HOTELS LTD


YEAR ENDED31.03.2013

Rs.

YEAR ENDED31.03.2012

Rs.

C. CASH FROM FINANCING ACTIVITIES

Finance Cost

Dividend Paid

Interest Receipts

Dividend tax paid

Proceeds from Long term borrowings

Proceeds from short term borrowings

Proceeds from Rights issue/Appliacation money

Proceeds from Short term loan others

NET CASH FLOW FROM FINANCING ACTIVITIES (C)

NET INCREASE / DECREASE IN CASH /

CASH EQUIVALENTS

Cash and cash equivalants opening as on

01.04.2012 / 01.04.2011

Cash and cash equivalants closing as on

31.03.2013 / 31.03.2012






-82,85,59,955

2,85,13,014

49,76,504

3,34,89,518

-21,79,62,524 -82,85,59,955

I / We..........................................................................................................................................................................................

being a Member / Members of Velan Hotels Limited, hereby appoint........................................................................................

...................................................................................................................................................................................................

of............................................................................... in the district of ..................................................................................

or failing him / her..................................................................................of .................................................................................

in the district of ............................................................................... as my / our Proxy to vote for me / us on my / our behalf at the

rd th23 Annual General Meeting of the Company to be held on Wednesday, the 25 September, 2013 at 4.00 p.m. and at any

adjournment thereof.

Signed this ......................................................................day of .......................................................2013.

N.B: The proxy should be deposited at the Registered Office of the Company not later than 48 hours before the commencement of the Meeting. The proxy need not be a Member of the Company.

Signature :

Re. 1/-Revenue

Stamp

PROXY FORM

ADMISSION SLIP

rd23 ANNUAL GENERAL MEETING

PLEASE COMPLETE THE SLIP AND HAND IT OVER AT THE ENTRANCE

TO THE MEETING HALL

rdI hereby record my presence at the 23 Annual General Meeting of the Company at thon Wednesday, the 25 September, 2013 at 4.00 p.m.

Registered Office

of the Company situate at 41, Kangayam Road, Tirupur - 641 604

Name of the Shareholder / Proxy*

* Strike out whichever is not applicable

Signature of the Shareholder / Proxy*

NAME & ADDRESS OF THE MEMBER

Folio No. / Client ID No. .................................................

Name: ......................................................

Address: ......................................................

......................................................

......................................................

Regd. & Admn. Office :41 Kangayam Road, Tirupur 641 604. Tamil Nadu

VELAN HOTELS LTD


Regd. & Admn. Office :41 Kangayam Road, Tirupur 641 604. Tamil Nadu


23rd annual report for the year ended 31st march 2013 · velan hotels ltd annual report 2012 - 2013...

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