victoria capital ventures ltd Management discussions

VICTORIA CAPITAL VENTURES LIMITED ANNUAL REPORT 2005-2006 MANAGEMENT DISCUSSION AND ANALYSIS Operations: 2005-2006 was a good year for your company, much better than the previous year. With the additional two rooms to the existing ten-room Heritage Hotel, the retail operation continuing in its momentum, the restaurant operations recording a further increase in its top line and the addition of the Freshly Packed Meals takeaway business (with kiosks and vans spread across the city to dispense the meals) your company has set the stage for a double digit growth path in the current and coming years. Your company continued its efforts to pursue its old defaulters and the full amount from one defaulter was recovered in the current year. We remain hopeful that justice will prevail and we will recover our dues from the remaining defaulters in due course. Your company had made a provision of Rs. 19 lakhs in the books towards disputed sales tax liabilities last year and this matter was heard in the Tribunal. We are awaiting the judgement and are optimistic of it being in our favour. There was other income in the books of the company when it sold one of its real estate assets at a handsome margin to fund the addition of a swimming pool, health club and another restaurant to the hotel, which will become operational in September 2006. Prospects: We expect higher tourist arrivals in 2006-2007 and with all twelve rooms and the pool operational, we expect robust sales in both our restaurant and hotel businesses. The packaged food business of the company that became operational in April 2005 with one unit has grown to have eight food stations around the city with sales expected to record over 300% growth year on year. Significant efforts have been made in laying the foundations for the retail business and it resulted in the company receiving four export orders. These efforts are expected to bear more fruit in the coming years. The overall prospects of the company look very positive with planned expansion both in the hotel capacity and package tourism in the coming year.