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History of Hotel Rugby Ltd.

Hotel Rugby Private Limited was originally incorporated on 16th September, 1991. It was subsequently converted. into a Public Limited Comp. in terms of Special Resolution passed on 25th October, 1993 & obtained a fresh certificate of incorporation subsequent to change of name on 9th December, 1993.

The Comp. was formed with an object of taking over of firm namely M/s Hotel Rugby. The partners of firm were Smt.Kantaben Thacker, Mrs. Darshana Thacker, Shri Mihir Thacker & Master Maunik Thacker. The Comp. has entered into a Memorandum of Understanding [MOUs] with M/s Hotel Rugby on 16-9-91. The summary of important terms and conditions of said MOU are as under:-

as] The Comp. has taken over all the assets & liabilities without revaluing the same of ongoing firm M/s. Rugby Hotel at book value as per audited Balance Sheet & Profit & Loss Account, on 16/09/91.

bs] Total purchase consideration for taking over of firm was decided to be Rs. 12,53,774/-.

cs] The consideration was paid as under:

The Comp. has issued & allotted 99,800 equity shares to the erstwhile pioneers of M/s. Rugby Hot & had adjusted & appropriated the amount payable by Comp. to the respective erstwhile partners. The balance credit of Rs. 2,55,774/- was treated as contingent reserve which is to be appropriated for any liabilities which may arise in future. The excess liability, if any, other than specified and disclosed as per the accounts, so arising shall be borne by partners in the erstwhile profit sharing ratio & if surplus remaining shall be distributed amongst the partner in their profit sharing ratio. As on today there is balance of Rs. 768.37 which will be paid to partners as stated above.

The Comp. took over hotel Rugby at Matheran, on incorporation, i.e., 16-9-1991. The hotel is spreaded over 13 acres of land, maintained in a natural settling with lush trees & minimal but attractive land scaping. The hotel has total 57 rooms, including 2 softs, 3 duplex units & 32 super deluxe rooms. Seven rooms suits & duplex are air-conditioned.

The hotel is also having facilities of indoor & outdoor games, children play ground, conference hall for 100 persons, dining hall to serve 125 persons at a time & a library.

The Comp. has also taken over the business on conducting basis of M/s Naivedyam & M/s.Thackers Caterers with effect from 1-9-93. In both the firms the promoters of Comp. Mr. Mahendra Thacker is interested as he or his wife or his sons are partners in it. Both the firms are 100% owned by Mr. Mahendra Tacker either by himself or through his wife and sons.

Thackers Caterers have been established in the year 1974 as partnership firm in Bombay Mr. Mahendra Thacker [HUFs] and Mrs. Darshana Thacker are the Present partners of firm. Firms [1974s] main objective is to provide catering services to private clubs & various marriage receptions/ parties. Firm has three ongoing contracts since fts establishment. They are for :-

[is] Cricket Club of India [CCIs] at Churchgate, Bombay. Western India Automobile Association [W.I.A.A.s] at Hanging Garden, Bombay

[iiis] Jalaram Hall at. Juhu Vile-Parle Scheme, Bombay.

The business of firm has been taken over by Hotel Rugby Limited for a period of 10 years commencing from 1.9.93.

The period of 10 years can be further renewed on such terms & conditions as mutually agreed by & between the parties. Since this firm undertakes only the catering contracts, there is no need for any fixed assets like building etc. Thackers caterers will transfer kitchen equipments & utensils to Hotel Rugby limited for conducting its business at an annual fees of Rs.1.5 lacs or 1 1/2% of gross turn over whichever is higher & an interest free deposit of Rs.50 lacs payable by Hotel Rugby Limited to the said Partnership Firm. Comp. would have to pay much more amount to get rights to provide catering services at above mentioned places. The Comp. therefore decided to acquire business of Thacker Caterers on conducting basis.

FINANCIAL PERFORMANCE OF THE COMPANY and OF THE ERSTWHlLE PARTNERSHIP FIRM M/S HOTEL RUGBY

The financial performance of erstwhile partnership firm for years ended on 31/3/90 & 31/3/91 & for period upto 16/9/91 & that of Comp. for period ended on 31/3/92, 31/3/93, 30/9/93 & further period of six months hinded on 31.3.94 are given below. The financial statement of partnership firm has been worked out as per schedule Vi of Companies Act, 1956 applying the principles of accrual system of accounting & confirmity to the guidelines issued by Institute of Chartered Accountants of India

NAIVEDYAM SWEET SHOP

Naivedyam Sweet Shop is an existing partnership firm specialising in manufacturing & marketing Indian Sweets & Savouries. Mr. Mahendra Thacker, Mr. Mihir Thacker and Mr. Maunik Thacker are the partners of firm. The firm transferred its business along with equipments to Hotel Rugby limited w.e.f. 1/9/93 for a period of 10 years, at an annual consideration of Rs.1.5 lacs per annum or 1 1/2% of Gross turn over whichever is higher & Rs.50 lacs interest free deposit payable by Hotel Rugby Ltd to the said Partnership Firm. The name of Naivedyam enjoys goodwill and therefore the Comp. has paid the security deposit. The agreement can be renewed on such terms & conditions as may be mutually agreed by & between the parties.

The performance of said Partnership Firm & the Comp. on financial front was encouraging. The business of Partnership Firm & the Comp. had grown steadily since As inception.

The financial performance of both these firms are given as under :

FINANCIAL HIGHLIGHTS OF M/s NAIVEDYAM

1-4-93to Particulars 31-3-91 31-3-92 31-3-93 31-3-94

Gross Income 23,44,143 29,16,482 85,51,836 46,34,722 Gross Profit 40,506 1,19.404 3,81,845 3,00,062 Net Profit 32,450 1,15,376 3,36,376 2,72,132

NOTE: The Board of Directors of Comp. has decided to have separate accounting year for purpose of Income Tax & Companies Act. Accordingly, the Comp. has changed its current Accounting Ye March ending to September ending & accordingly the Accounting is ended on 30/9/93.

AUDITORS NOTES ON ACCOUNT'S

FOR THE PERIOD ENDED 31ST MARCH 1992

1 . As per the Memorandum of Understanding executed at Bombay on 16/09/91, the Comp. has taken over all the assets & liabilities of going concern firm M/s.Rugby Hotel at book value as per audited Balance Sheet & Profit & Loss Account on 16/09/91.

2. The Comp. has issued & allotted 99,800 equity shares to the partners of M/s.Rugby Hotel & had adjust & appropriate the amount payable by Company. The balance credit is treated as take over contingent reserve which is to be appropriated for any liabilities which may arise in future. The excess liability so arising shall be borne by partners in the erstwhile profit sharing ratio & if surplus remains shall be distributed amongst the partner.

To the best of knowledge there is no such liability.

FOR THE YEAR ENDED 31 ST MARCH 1993

1. The Comp. has, vide a lease agreement w.e.f. 1st April, 1 992 taken the lease hold rights at certain terms to a period of 3O years with an option to renew further for 10 years for land & structure thereon situated at Matheran. The leasehold rights are capitalised @ 14% p.a. to enable the Comp. to discharge fts lease liability over the lease period.

FOR THE YEAR ENDED 30TH SEPTEMBER, 1993

1. SIGNIFICANT ACCOUNTING POLICIES

SYSTEM OF ACCOUNTING

The Comp. follows the mercantile system of accounting.

Sales

Sales comprise of sale of room food & beverage & allied services relating to hotel stay & also sales effected on the takeover of running business on conducting basis of M/s.Naivedyam and M/s.Thacker Cederers w.e.f. 01/09/93.

Gratuity

Gratuity is accounted & paid as & when employee terminates his service. No provision for gratuity is made on accrual basis. The amount of accrued liability on this Acc. is unascertained.

Fixed Assets

is] Fixed assets [including leasehold rightss] have been revalued as on 1.4.93 as per valuers report & shown accordingly [refer notes belows]:

iis] The fixed assets acquired during the year are valued at cost plus incidental expenses, if any relating to the same are capitalised.

Depreciation

is] Depreciation is provided under the straight line method at rate specified in Schedule XIV to the Companies Act, 1956.

iis] The depreciation on revalued assets to the extent of enhanced value on Acc. of revaluation [excluding leasehold rightss] is charged to revaluation reserve a/c.

Investments

Original investments are stated at cost except that bonus shares received on investments are capitalised at face value by crediting capital reserve a/c.

Inventories

Stock of raw material, food & beverages & operating supplies are stated at cost & as per inventory taken, valued & certified by Managing Director.

Proposed Dividends

Dividends proposed by Directors as appropriation of profits are provided for in the books of Acc. pending approval of shareholders at Annual General Meeting.

2. The Comp. has changed the accounting year from 31st March to 30th September & accordingly these Acc. are closed & made up to 30th September, 1993 i.e. for a period of 6 months. The current year Acc. are therefore for 6 months only as compared to previous year of 12 months & therefore these are not comparable with those of previous year figures. The figures have also been regrouped & rearranged wherever necessary.

3. The Comp. has taken over w.e.f. 1st September, 1993 the running business [on conducting basiss] of M/s. Naivedyam & M/s. Thackers Caterers & certain inventory of raw material at book value and/or estimated market value.

4. as] The Comp. has, vide a lease agreement w.e.f. 1st April, 1992 taken the lease hold rights at certain terms for a period of 30 years with an option to renew further for 10 years for land & structure thereon situated at Matheran. The leasehold rights are capitalised @ 14% p.a. rate of return basis to enable the Comp. to discharge fts lease liability over the lease period by crediting to leasehold assets fund a/c sum of Rs.3,50,133/-.

bs] The lease hold rights as referred in [as] above is further increased on Comp. deciding to revalue the leasehold rights as professional valuer. such increase on revaluation of leasehold rights is by Rs.4,14,91,867/- over & above to fts original capitalisation value [based on 14% p.a. rate of return to discharge lease liabilitys] as at the beginning of year of Rs.3,50,133/- & such increase is credited correspondingly to revaluation reserve a/c. The said amount of revaluation has been already accounted in over all figure of revaluation reserve as mentioned herein below.

5. [as] Based on valuation report submitted by professional valuer appointed for purpose, all the fixed assets of Comp. including leasehold rights, are revalued as on 1.4.93 on current replacement cost basis to reflect more accurately their intrinsic value. The net result consequent to this was an increase in the book value of fixed assets including of leasehold rights by Rs.7,04,78,565.24 [grosss] & accumulated depreciation of Rs.73,76,025/- resulting in a net increase of Rs.6,31,02,540.24 which was credited to revaluation reserve as on 01 /04/93.

[bs] Depreciation charge of Rs.5,13,919.24 for period of 01 /04/93 to 30/09/93 [pro-rata on the basis of rates prescribed in schedule XIV to the Companies Act, 1956s] on increased value of assets on revaluation is charged to revaluation reserve a/c. No depreciation/write off is provided for leasehold rights.

6. The leasehold rights as appearing in balance sheet are written off during the lease period out of revaluation reserve. Accordingly a sum of Rs.7,32,883/- is debited to revaluation reserve a/c to discharge leasehold rights to the extent of expired period of Lease.

7. as] Rugby Foods & Beverages Pvt. Ltd, became fully owned subsidiary of Hotel Rugby limited by purchasing of 69,849 Equity Shares @ Rs.10/- each which is held in the name of Comp. & its nominees consequently Rugby Foods & Beverages Pvt. limited became a Public Limited as pursuant to Section 43A of Companies Act, 1956. The company has received 977886 bonus shares during the period, from Rugby Foods and Beverages limited in the ratio of 14 Bonus shares for every one share held, of face value of Rs. 10/- each. Thereby the total number of shares held has increased to 10,47,735/- shares of Rs.10/- each fully paid up. In accordance with a legal opinion, the aforesaid bonus shares are capitalised at face value by crediting capital reserve Acc. & correspondingly increase in investment value by Rs.97,78,860/-.

bs] The adequate funds for meeting out any liability on decrease in investment value will be created in the year of disposal of investments.

8. As per the legal opinion, the Comp. issued bonus shares of face value of Rs. 10/- each fully paid [as on record date 29/09/93s] in the ratio of 21:1 at par by capitalising a total sum of Rs.2,94,00,000/- as under:

as] Rs.97,78,860/- out of capital reserve which was created on capitalisation of bonus shares from the subsidiary company.

bs] Rs.1,96,21,140/- out of revaluation reserve. Thus making total Rs.2,94,00,000/- for issue of 29,40,000 fully paid bonus shares in the ratio of 21:1.

The bonus shares issued as aforesaid out of revaluation reserve & capital reserve shall rank pari passu in all respect with existing capital except dividend.

9. As legally opined, the Comp. has utilised fts revaluation reserves for payment of bonus to shareholders.

10, The Comp. Hotel Rugby Pvt Ltd was converted to Public Limited Comp. by a Special Resolution passed at the EGM held on 25th October, 1993 & has since obtained fresh certificate of incorporation & accordingly became Public Limited Comp. vide certificate of change of name issued by ROC on 9th December, 1993.

11. Contingent liability not provided, for litigations regarding property tax payable to the Municipal Committee of Matheran which is sub-judice for last three years. The matter is pending before Karjat and Alibag Court. The estimated liability on this Acc. may amount to approx. Rs. 11. 10 lacs.

MAIN OBJECTS OF THE COMPANY

The main objects of Comp. as set out in the Memorandum of Association of Comp. are as under :

1. To enter into Partnership in and/or to take over acquire or purchase as a going concern, the assets and liabilities of Hotel Rugby engaged in the business of running a hotel as such take over of firm shall stand dissolved after the agreement.

2. To carry on the business of Hotelier, restaurantor, to provide lodging & boarding, catering houses, bar swimming pooland other facilities to the Public including tourists, visitors & other delegate coming to India from foreign countries & to members of delegations & missions from foreign countries.

3. To own construct, run, render technical advice in constructing, furnishing & running of, take over. manage, carry on the business of hotel, restaurant cafe, tavern, bars, refreshment rooms, boarding & lodging, house keepers, clubs in India or any other part of the world.

SUBSIDIARIES OF THE COMPANY:

Rugby Foods & Beverages Limited is a fully owned subsidiary of Company, within the meaning of Section 4 of the Companies Act, 1956. Rugby Foods & Beverages Limited has been promoted by Mr. Mahendra Thacker in the year 1991. In 1993, Hotel Rugby limited has purchased shares from Thacker family which resulted in Rugby Foods & Beverages limited becoming 100% subsidiary of Hotel Rugby Ltd.

The said subsidiary Comp. had no business operations for the period ended on 31.3,93 but commenced its activities of providing consultancy services in the business of Hotel Management for accounting year 1993-94.

2002-C H Mirani/ Dilip J Thakkar resign from Directorship of Hotel Rugby.