Mac Charles (India) Ltd

Your Directors have pleasure in presenting the 30^th Annual Report ofthe Company together with the Audited Statement of Accounts for the year ended 31 March2010.

FINANCIAL RESULTS

HOTEL OPERATIONS

During the year under report, the economy witnessed a global economic slowdown mainlyresulted on account of unprecedented turmoil in the banking and financial sector indeveloped countries. The Indian economy is also affected resulting in lower Hotel roomoccupancy and average room rate. Hence, sales turn over has decreased from Rs.6307 lakhsto Rs.4152 lakhs. During the current financial year 2010-11, the hotel business isimproving. Hence, working results will be better.

FUTURE PROSPECTS

The future of the hotel industry is entirely dependant on the state of the country'seconomy. The outlook for the Financial Year 2010-11 is improving. The demand for hotelaccommodation is improving. The Company's performance is expected to show an improvement.

FINANCE

During the year under report, the financial position of the Company has further beenconsolidated with significantly increased reserves and surplus.

DIVIDEND

The Board of Directors have recommended a dividend of Rs. 11/- per share on sharecapital of Rs.6.55 crores divided into 65,50,526 equity shares of Rs. 10/- each. The saiddividend, if approved at the ensuing Annual General Meeting, will be paid to thoseshareholders whose names appear in the Register of Members as on 31st August, 2010.

DIRECTORS' RESPONSIBILITY STATEMENT

The Board of Directors of the Company confirms:

a) Applicable accounting standards have been followed in the preparation of annualaccounts. Material departures therefrom, if any, are properly explained in the notes onaccounts;

b) The Board of Directors has selected such accounting policies and applied themconsistently and made judgements and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company at the end of thefinancial year and of the profit of the Company for the period ;

c) The Board has taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act forsafe-guarding the assets of the Company and for preventing and detecting fraud and otherirregularities; and

d) The Annual Accounts have been prepared for the financial year ended March 31 2010 ona going concern basis.

FOREIGN EXCHANGE EARNINGS

Foreign Exchange Earnings during the year were Rs.2325 lacs which is 56% of the HotelSales Turnover. The Foreign Exchange utilisation during the year was Rs.407 lacs.

SUBSIDIARY COMPANIES

During the year under review, your Company has invested 100% share capital in Messrs.NEDSTAR HOTELS PRIVATE LIMITED (presently known as AIRPORT GOLF VIEW HOTELS & SUITESPRIVATE LIMITED w.e.f. 18th June, 2010). As required under Section 212 of the CompaniesAct, 1956, the Audited Statement of Accounts, the Reports of the Board of Directors andAuditors of the Subsidiary Companies are annexed.

DUES TO SMALL SCALE UNDERTAKINGS

There are no dues payable to small scale undertakings.

CORPORATE GOVERNANCE

Members are aware that the Corporate Governance code has become a statutory requirementas per listing guidelines framed by the Stock Exchanges. Members will be happy to knowthat their Company is complying with the stipulations of the new code as on date. In linewith this requirement of the code, a Corporate Governance Report and a ManagementDiscussion and Analysis Report of the Company is furnished elsewhere in this AnnualReport.

ENERGY CONSERVATION

Conservation of energy continues to be on top priority of the management. The followingenergy conservation measures have been taken:

a) During the year under report, installed one more Wind Turbine Generator with acapacity of 2.10 MW apart from existing two numbers of 1.50 MW each environment friendlyWind Turbine Generators which generate electricity of about 1.15 crore units p.a. of greenpower which will be utilized partially for captive consumption of the Hotel and thebalance units generated is being sold to Govt, of Karnataka.

b) an effective key-tag system is in vogue in all guest rooms to switch off lights& power connections automatically.

c) substantially switched over to PL lamps from conventional lamps with a view tosaving energy upto 60% on lighting.

d) installed solar panels which are feeding hot water required for the guest rooms.

e) imported and installed three highly fuel efficient screw chillers for our AC plant.

f) replaced windows with double glazed reflective glass with a view to save power on ACconsumption.

g) installed two on load tap charger transformers for stabilising voltage fluctuationsand thereby to save power and prevent damage to electric motors and other installations.

h) thermostatic Controls, Timers and Photo Cell Switches have been installed wherevernecessary to control power consumption.

i) imported and installed two temperature control systems to reduce power consumption.

j) constituted an energy conservation committee to monitor power consumption regularly.

TECHNOLOGY ABSORPTION

In the opinion of the Board, the required particulars, pertaining to technologyabsorption in terms of Rule 2 of the Companies (Disclosure of Particulars in the Report ofBoard of Directors) Rules, 1988 are not applicable as hotel forms part of the serviceindustry and the Company does not have any significant manufacturing operations. However,the management has been adopting the latest technology like LCD TV systems, high speedinternet installed in all the guest rooms, latest high speed computers, modern guestamenities, best audio-video equipment, newest model transport vehicles for complimentarytransport of hotel guests, video conferencing facility, latest models of soundfree fridgesin guest rooms and various latest hotel operational equipments. Further the Hotel has beenconforming to the stringent Le Meridien's International Standards.

PARTICULARS OF EMPLOYEES

Information under section 217(2A) of the Companies Act. 1956, read with Companies(particulars of employees) Rules, 1975, is appended below :

Particulars of employees pursuant to the provisions of Section 217(2A) of the CompaniesAct, 1956 :

Employed throughout the year :

EMPLOYEES

The relationship with employees has been cordial. The total number of persons employedby the Company is 377 as at 31 March 2010.

DIRECTORS

Mrs. Kavita C. Pardhanani, resigned from the Board of Directors during the year.

Your Directors place on record their appreciation for the services rendered by Mrs.Kavita C. Pardhanani during her tenure as Director of your Company.

Out of the present Director, Mr. K. R. Sampath will retire by rotation at the 30thAnnual General Meeting and he is not seeking re-appointment.

AUDIT COMMITTEE

The Audit Committee comprising of Mr. C.B. Pardhanani, Mr. J. Matthan and Mr. P.B.Appiah all Directors of the Company with Mr. J. Matthan as the Chairman, discharged itsduties and functions in consultation with the Internal and Statutory Auditors: (a) Toreview the adequacy of the internal control system and internal Audit Reports and theircompliance thereof: (b) To oversee the Company's financial reporting process and thedisclosure of its financial information to ensure that the financial statements arecorrect, sufficient and credible: and (c) To review with the management, the financialstatements before submission to the Board.

AUDITORS' REPORT ON CORPORATE GOVERNANCE

As required by Clause 49 of the Listing Agreement, the Auditor's Certificate is givenas an annexure to Directors Report.

AUDITORS

M/s. K.B. Nambiar & Associates, Chartered Accountants, retire at the forthcomingAnnual General Meeting and being eligible offer themselves for re-appointment.

INTERNAL AUDITORS

M/s. B.P. Rao & Company, Internal Auditors have been conducting quarterly audits ofall operations of the Company and their findings have been reviewed regularly by the AuditCommittee. Your Directors note with satisfaction that no material deviations from theprescribed policy and procedures have been observed.

SECRETARIAL AUDIT

As per SEBI Regulations, secretarial audit is being carried out at the specifiedperiods by a practicing Company Secretary. The findings of the secretarial audit aresatisfactory.

DEMATERIALLSATION

The trading of Company's shares are dematerialisation of shares has been done withCentral Depository Services (India) Limited (CDSL) and National Securities DepositoryLimited (NSDL).

ACKNOWLEDGEMENTS

Your Directors are grateful to the Shareholders for their support and co-operationextended to the Company for many years. The Directors also thank the Banks namely StateBank of India and State Bank of Mysore for their co-operation and support. The Directorswish to place on record the support and encouragement received from the Department ofTourism, Government of India, Karnataka State Government and Foreign collaborators M/s.LeMeridien. The Directors also acknowledge the dedicated services rendered by the officersand all the staff of the Company.