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Directors Report of Gujarat Hotels Ltd.

Mar 31, 2014

The Directors submit their Report for the financial year ended 31st March, 2014.

FINANCIAL PERFORMANCE

During the year under review, your Company earned a licence fee of Rs. 299.64 lakhs (previous year Rs. 335.11 lakhs) showing a de-growth of over 11% over last year. However, other income of your Company grew by over 12% to Rs. 151.03 lakhs (previous year Rs. 134.47 lakhs). Post tax profits at Rs. 327.14 lakhs (previous year Rs. 334.40 lakhs) registered a de-growth of 2%. During the year, the portfolio of your Company''s investments were rebalanced to increase the quantum of long- dated Fixed Maturity Plans thereby yielding enhanced returns. All investment decisions in deployment of surplus funds continue to be guided by the tenets of Safety, Liquidity and Return.

Despite negative growth, your Directors are pleased to recommend a dividend of Rs. 3.50 per equity share of Rs. 10/- each for the year ended 31st March, 2014, thereby maintaining last year''s dividend and involving a cash flow of Rs. 155.09 lakhs including Dividend Distribution Tax of Rs. 22.53 lakhs. Your Board further recommends a transfer to General Reserve of Rs. 32.71 lakhs (previous year Rs. 33.44 lakhs). Consequently, your Board recommends leaving an unappropriated balance in the Statement of Profit & Loss of Rs. 1259.20 lakhs (previous year Rs. 1119.87 lakhs).

HOTEL OPERATIONS

The hospitality sector continued to be adversely impacted by the weak economic environment prevailing in major international source markets and within India on the one hand, and significant additions to room supplies in key Indian cities on the other. During the year, the domestic tourism industry remained sluggish with foreign tourist arrivals and domestic air travel growing at a modest 4.7% and 5.2% respectively. Your Company''s hotel Welcom Hotel Vadodara, licenced to ITC Limited, continued to retain its premier positioning in the city of Vadodara but operational performance was impacted mainly on account of the relatively weak pricing scenario and increase in operating costs in an inflationary environment. However, the long-term outlook for the Indian Hotel Industry remains positive with prospects of revival in the global and domestic economy.

During the year, your Company''s Hotel leveraged its ''Lean'' and ''Six Sigma'' programmes to improve business efficiencies. This will further enhance

capability to create superior customer value through a service excellence framework.

Your Company is pursuing the arbitration proceedings in a bid to settle the pending lease revision with respect to land on which your hotel is built. Arguments are on going before the Arbitrator. Your Company has filed a writ petition in the Gujarat High Court seeking that the Gujarat State Government be directed to take action on your Company''s application to have the leasehold land of the Hotel converted to freehold and transferred to your Company as per the existing government policy in this regard.

Foreign exchange earnings of the hotel during the year were Rs. 966 lakhs as against Rs.1187 lakhs in the previous year. During the year, your hotel''s expenditure in foreign currency amounted to Rs/ 2.06 lakhs (previous year Rs. 49.36 lakhs).

CONSERVATION OF ENERGY

Considering the fact that the Company''s hotel is under an operating licence with ITC Limited, no comment is made on conservation of energy. However, the hotel continues to focus on energy conservation, safety and environment.

EMPLOYEES

Your Directors wish to record their sincere appreciation of the efforts made and the support rendered by the employees of the Company. Your Company''s total manpower strength as deployed in the Company''s hotel is 188.

None of the employees fall under the purview of the provisions of Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975.

DIRECTORS

In accordance with the provisions of Article 147 of the Articles of Association of the Company, Mr Chandrasekhar Subrahmoneyan will retire by rotation at the ensuing Annual General Meeting of your Company and, being eligible, offers himself for re- election. The Board has recommended his re-election.

COMPLIANCE CERTIFICATE UNDER COMPANIES ACT, 1956

A certificate issued by Messrs H M Mehta & Associates, Company Secretaries, in terms of the provisions of Section 383A of the Companies Act, 1956, to the effect that the Company has complied with the applicable provisions of the said Act is attached to this Report.

AUDITORS

Messrs Talati & Talati, Statutory Auditors, retire at the ensuing Annual General Meeting have confirmed their eligibility and have offered themselves for re- appointment as Statutory Auditors. In accordance with Section 139 of the Companies Act, 2013, your Directors have recommended for your approval the appointment of Messrs Talati & Talati as the Statutory Auditors of the Company for a period of three years.

OTHER INFORMATION

The certificate of the Auditors, Messrs Talati & Talati, confirming compliance of conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges, is annexed to the Report.

The Audit Committee of the Company reviewed the financial statements for the year under review at its meeting held on 15th April, 2014 and recommended them for the approval of the Board of Directors.

DIRECTORS RESPONSIBILITY STATEMENT

As required under Section 217(2AA) of the Companies Act, 1956, your Directors confirm having:

(i) followed in the preparation of the Annual Accounts the applicable accounting standards along with proper explanations relating to material departures, if any;

(ii) selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of your Company at the end of the financial year and of the profit of your Company for that period;

(iii) 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 your Company and for preventing and detecting fraud and other irregularities; and

(iv) prepared the Annual Accounts on a going concern basis.



On behalf of the Board

Chandrasekhar Subrahmoneyan Arun Pathak Director Director

Place : Gurgaon Date : 15th April, 2014


Mar 31, 2013

The Directors submit their Report for the financial year ended 31 st March, 2013.

FINANCIAL PERFORMANCE

During the year under review, your Company earned licence fee ofRs. 335.11 lakhs (previous year - Rs. 361.25 lakhs) showing a de-growth of 7% over last year. However, other income of the Company grew by 44% to Rs. 134.47 lakhs (previous year - Rs. 93.24 lakhs). Pre tax profit increased by 5% to Rs. 442.20 lakhs (previous yearRs. 419.58 lakhs) while post tax profits atRs. 334.40 lakhs registered a growth of 10% (previous year Rs. 304.37 lakhs) mainly due to investment of surplus funds in treasury operations covering mutual funds which led to enhanced yields for the year. Earnings per share for the year stood at Rs. 8.83 (previous yearRs. 8.04) and Cash Flows from operations were Rs. 190.53 lakhs (previous year Rs. 204.64 lakhs).

Your Directors are pleased to recommend a dividend of Rs. 3.50 per equity share of Rs. 10/- each (previous year - Rs. 3.25 per equity share) for the year ended 31st March, 2013. Your Board further recommends a transfer to General Reserve of Rs. 33.44 lakhs (previous yearRs. 30.44 lakhs).

HOTEL OPERATIONS

The weak global and domestic economic environment caused sluggishness in the domestic tourism industry during the year. Your Company''s hotel WelcomHotel Vadodara, licenced to ITC Limited, continues to retain its premier positioning in the city of Vadodara. The hotel recorded an income of Rs. 2279 lakhs during the year as compared to Rs. 2441 lakhs in the previous year reflecting the weaker economic scenario. However, it is believed that Indian economy is robust and the State of Gujarat has become a major investment destination and is expected to augment new businesses in its wake. In view of positive outlook, your Company''s hotel has upgraded its front and back end IT systems and other facilities to contemporary international standards to maximize operational efficiencies. The hotel has been awarded ISO 22000:2005 Business Assurance Food Safety System Certificate and has been recertified ISO 14001:2004 in compliance with the environmental management systems.

Your Company is pursuing the arbitration proceedings in a bid to settle the pending lease revision with respect to land on which your hotel is built. Pleadings of both the parties are over and final arguments before the Arbitrator are scheduled shortly. Your Company has filed a writ petition in the Gujarat High Court seeking that the Gujarat State Government be directed to take action on the Company''s application to have the leasehold land of the Hotel transferred to the Company as per the existing Government policy in this regard.

Foreign exchange earnings of the hotel during the year were Rs. 1187 lakhs as againstRs. 1342 lakhs in the previous year. During the year your hotel''s expenditure in foreign currency amounted toRs.49.36 lakhs (previous yearRs. 12.7 lakhs).

CONSERVATION OF ENERGY

Considering the fact that the Company''s hotel is under an operating licence with ITC Limited, no comment is made on conservation of energy. However, the hotel continues to focus on energy conservation, safety and environment.

EMPLOYEES

Your Directors wish to record their sincere appreciation of the efforts made and the support rendered by the employees of the Company. Your Company''s total manpower strength as deployed in the Company''s hotel is 190.

None of the employees fall under the purview of the provisions of Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975.

DIRECTORS

In accordance with the provisions of Article 147 of the Articles of Association of the Company, Mr. Cheruvettolil Kochukoshy Koshy and Mr. Mahalinga Narayanan will retire by rotation at the ensuing Annual General Meeting of the Company and being eligible, offer themselves for re-election. The Board has recommended their re-election.

COMPLIANCE CERTIFICATE UNDER COMPANIESACT,1956

A certificate issued by Messrs H. M. Mehta & Associates, Company Secretaries, in terms of the provisions of Section 383A of the Companies Act, 1956, to the effect that the Company has complied with the applicable provisions of the said Act is attached to this Report.

AUDITORS

The Company''s Auditors, Messrs Talati & Talati, retire at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment.

OTHER INFORMATION

The certificate of the Auditors, Messrs Talati & Talati, confirming compliance of conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges, is annexed to the Report.

The Audit Committee of the Company reviewed the financial statements for the year under review at its meeting held on 25th April, 2013 and recommended them for the approval of the Board of Directors.

DIRECTORS RESPONSIBILITY STATEMENT

As required under Section 217 (2AA) of the Companies Act, 1956, your Directors confirm having:

(i) followed in the preparation of the Annual Accounts the applicable accounting standards along with proper explanations relating to material departures, if any;

(ii) selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of your Company at the end of the financial year and of the profit of your Company for that period;

(iii) 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 your Company and for preventing and detecting fraud and other irregularities; and

(iv) prepared the Annual Accounts on a going concern basis.

On behalf of the Board

Chandrasekhar

Subrahmoneyan Arun Pathak

Director Director

Place : New Delhi

Date :25th April, 2013


Mar 31, 2012

The Directors submit their Report for the financial year ended 31st March, 2012.

FINANCIAL PERFORMANCE

During the year under review, your Company earned a licence fee of Rs 361.25 lakhs (previous year - Rs 392.30 lakhs) showing a de growth of 7.91% over last year. This reflects the impact of the general economic environment. The net profit of the Company increased to Rs 304.37 lakhs (previous year - Rs 294.97 lakhs) registering a growth of 3.19%. The Company's focus on proactive treasury operations to invest surplus funds in tax saving mutual funds led to enhanced yields and reduced income tax for the year to Rs 115.21 lakhs (previous year - Rs 134.66 lakhs). Earnings per share for the year stood at Rs 8.04 and Cash Flows from operations were Rs 204.64 lakhs.

Your Directors are pleased to recommend a dividend of Rs 3.25 per equity share of Rs 10/- each (previous year - Rs 3/- per equity share) for the year ended 31st March, 2012. Your Board further recommends a transfer to General Reserve of Rs 30.44 lakhs (previous year - Rs 29.50 lakhs).

HOTEL OPERATIONS

Your Company's hotel Welcom Hotel Vadodara, licenced to ITC Limited, continues to retain its market leadership in the city of Vadodara. The hotel recorded an income of Rs 2444 lakhs during the year as compared to Rs 2650 lakhs in the previous year.

Your Company is pursuing the arbitration proceedings in a bid to settle the pending lease revision with respect to land on which your hotel is built. Your Company has filed its statement of claims with the Arbitrator and expects him to pass appropriate orders in this regard going forward.

The foreign exchange earnings of the hotel during the year were Rs 1342 lakhs as against Rs 1391 lakhs in the previous year.

CONSERVATION OF ENERGY

Considering the fact that the Company's hotel is under an operating licence with ITC Limited, no comment is made on conservation of energy. However, the hotel continues to focus on energy conservation, safety and environment.

EMPLOYEES

Your Directors wish to record their sincere appreciation of the efforts made and the support rendered by the employees of the Company. Your Company's total manpower strength as deployed in the Co mpany's hotel is 202.

None of the employees fall under the purview of the provisions of Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975.

DIRECTORS

Mr Arun Pathak was appointed as an Additional Director of the Company with effect from 12th November, 2011. As per the provisions of Section 260 of the Companies Act, 1956, read with Article 130 of the Articles of Association of the Company, Mr Pathak would vacate office at the forthcoming Annual General Meeting (AGM) and being eligible, offers himself for appointment. Notice has been received from a Member of the Company under Section 257 of the Companies Act, 1956 for the appointment of Mr Pathak as Director. Appropriate resolution seeking your approval to his appointment is appearing in the Notice convening the 30th AGM of the Company.

In accordance with the provisions of Article 147 of the Articles of Association of the Company, Mr Rohit C Mehta will retire by rotation at the ensuing AGM of the Company and, being eligible, offers himself for re-election. The Board has recommended his re- election.

Mr Prafull Indulal Bhuva, who was also due to retire by rotation at the ensuing AGM, has intimated that he would not like to seek re-election as a Director at the ensuing AGM. The Board recommends that the vacancy so caused by the retirement of Mr Bhuva be not filled up. The Directors would like to place on record their sincere appreciation of the valuable services rendered by Mr Bhuva.

COMPLIANCE CERTIFICATE UNDER COMPANIES ACT, 1956

A certificate issued by Messrs H M Mehta & Associates, Company Secretaries, in terms of the provisions of Section 383A of the Companies Act, 1956, to the effect that the Company has complied with the applicable provisions of the said Act is attached to this Report.

AUDITORS

The Company's Auditors, Messrs Talati & Talati, retire at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment.

OTHER INFORMATION

The certificate of the Auditors, Messrs Talati & Talati, confirming compliance of conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges, is annexed to the Report.

The Audit Committee of the Company reviewed the financial statements for the year under review at its meeting held on 27th April, 2012 and recommended them for the approval of the Board of Directors.

DIRECTORS RESPONSIBILITY STATEMENT

As required under Section 217 (2AA) of the Companies Act, 1956, your Directors confirm having:

(i) followed in the preparation of the Annual Accounts the applicable accounting standards along with proper explanations relating to material departures, if any;

(ii) 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 your Company at the end of the financial year and of the profit of your Company for that period;

(iii) 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 your Company and for preventing and detecting fraud and other irregularities; and

(iv) prepared the Annual Accounts on going concern basis.

On behalf of the Board

Chandrasekhar

Subrahmoneyan Arun Pathak

Director Director

Place : New Delhi

Date : 27th April, 2012


Mar 31, 2011

The Directors submit their Report for the financial year ended 31 st March, 2011.

FOR THE FINANCIAL YEAR ENDED 31st MARCH, 2011

FINANCIAL PERFORMANCE

During the year under review, your Company earned a license fee of Rs. 392.30 lacs (previous year -Rs. 321.90 lacs) registering a 21.87% growth over last year and a net profit of Rs. 294.97 lacs (previous year - Rs. 250.40 lacs) after providing for income tax of Rs. 134.66 lacs (previous year - Rs. 128.93 lacs). Earnings Per Share for the year stood at Rs. 7.79 and Cash Flows from operations wereRs. 254.25 lacs.

Your Directors are pleased to recommend a dividend of Rs. 3/- per Equity Share of Rs. 10/- each (previous year - Rs. 2.75 per equity share) for the year ended 31st March, 2011. Your Board further recommends a transfer to General Reserve of Rs. 29.50 lacs (previous year Rs. 25.04 lacs).

HOTEL OPERATIONS

Your Companys hotel WelcomHotel Vadodara, licensed to ITC Limited, continues to retain its market leadership in the city of Vadodara. The hotel recorded an income of Rs. 2,650 lacs during the year as compared to Rs. 2,174 lacs in the previous year.

Your Company is pursuing the initiation of arbitration proceedings in a bid to settle the pending lease revision with respect to land on which your hotel is built and expect the Honourable Gujarat High Court to pass appropriate orders in this regard in the near future.

The foreign exchange earnings of the hotel during the year were Rs. 1,391 lacs as against Rs. 1,233 lacs in the previous year.

CONSERVATION OF ENERGY

Considering the fact that the Companys hotel is under an operating license with ITC Limited, no comment is made on conservation of energy. However, the hotel continues to focus on energy conservation, safety and environment.

EMPLOYEES

Your Directors wish to record their sincere appreciation of the efforts made and the support

rendered by the employees of the Company. Your Companys total manpower strength as deployed in the Companys hotel is 196.

None of the employees fall under the purview of the provisions of Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975.

DIRECTORS

Mr. Ashok K. Tandon, Director of your Company resigned with effect from 13th December, 2010. Your Directors would like to place on record their sincere appreciation of the valuable services rendered by Mr. Tandon.

In accordance with the provisions of Article 147 of the Articles of Association of the Company, Mr. S. C. Sekhar and Mr. Nakul Anand will retire by rotation at the ensuing Annual General Meeting of the Company and, being eligible, offer themselves for re-election. The Board has recommended their re-election.

Compliance Certificate Under Companies Act, 1956

A certificate issued by Messrs H. M. Mehta & Associates, Company Secretaries, in terms of the provisions of Section 383 A of the Companies Act, 1956, to the effect that the Company has complied with the applicable provisions of the said Act is attached to this Report.

AUDITORS

The Companys Auditors, Messrs Talati & Talati, retire at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment.

OTHER INFORMATION

The certificate of the Auditors, Messrs Talati & Talati, confirming compliance of conditions of Corporate Governance as stipulated under clause 49 of the Listing Agreement with the Stock Exchanges, is annexed to the Report.

The Audit Committee of the Company reviewed the financial statements for the year under review at its meeting held on 28th April, 2011 and recommended them for the approval of the Board of Directors.

Directors Responsibility Statement

As required under Section 217 (2AA) of the Companies Act, 1956, your Directors confirm having:

(i) followed in the preparation of the Annual Accounts the applicable Accounting Standards along with proper explanations relating to material departures, if any;

(ii) selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period;

(iii) 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) prepared the Annual Accounts on going concern basis.

On behalf of the Board

Place : Gurgaon Rohit C Mehta S.C. Sekhar Date : 28th April, 2011 Director Director


Mar 31, 2010

The Directors submit their Report for the financial year ended 31st March, 2010.

FINANCIAL PERFORMANCE

During the year under review, your Company earned a licence fee of Rs. 321.90 lacs (previous year - Rs. 303.82 lacs) registering a 5.94 % growth over last year and a net profit of Rs, 250.40 lacs (previous year - Rs. 239.24 lacs) after providing for income tax of Rs. 128.93 lacs (previous year - Rs. 123.60 lacs). Earnings Per Share for the year stood at Rs. 6.61 and Cash Flows from operations were Rs.181.89 lacs.

Your Directors are pleased to recommend a dividend of Rs. 2.75 per Equity Share of Rs. 10/- each (previous year - Rs. 2.50 per equity share) for the year ended 31st March,2010.Your Board further recommends a transfer to General Reserve of Rs. 25.04 lacs (previous year Rs. 23.92 lacs).

HOTEL OPERATIONS

Your Companys hotel WelcomHotel Vadodara, licenced to ITC Limited, continues to retain its market leadership in the city of Vadodara. The hotel recorded an income of Rs. 2174 lacs during the year as compared to Rs. 2046 lacs in the previous year.

The foreign exchange earnings of the hotel during the year were Rs. 1233 lacs as against Rs. 1,200 lacs in the previous year.

CONSERVATION OF ENERGY

Considering the fact that the Companys hotel is under an operating licence with ITC Limited, no comment is made on conservation of energy. However, the hotel continues to focus on energy conservation, safety and environment.

EMPLOYEES

Your Directors wish to record their sincere appreciation of the efforts made and the support rendered by the employees of the Company. Your Companys total manpower strength as deployed in the Companys hotel is 192.

None of the employees fall under the purview of the provisions of Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975.

DIRECTORS

In accordance with the provisions of Article 147 of the Articles of Association of the Company, Mr. C K Koshy and Mr. M Narayanan will be retiring by rotation at the ensuing Annual General Meeting of your Company and being eligible, offer themselves for re-appointment.

Compliance Certificate under Companies Act, 1956

A certificate issued by Messrs H M Mehta & Associates, Company Secretaries, in terms of the provisions of Section 383 A of the Companies Act, 1956, to the effect that the Company has complied with the applicable provisions of the said Act is attached to this Report.

AUDITORS

The Auditors of your Company, Messrs Talati & Talati, retire at the ensuing Annual General Meeting and being eligible, offer themselves for re- appointment.

OTHER INFORMATION

The certificate of the Auditors, Messrs Talati & Talati, confirming compliance of conditions of Corporate Governance as stipulated under clause 49 of the Listing Agreement with the Stock Exchanges,is annexed to the Report.

The Audit Committee of the Company reviewed the financial statements for the year under review at its meeting held on 28th April, 2010 and recommended them for the approval of the Board of Directors.

Directors Responsibility Statement

As required under Section 217 (2AA) of the Companies Act, 1956, your Directors confirm having:

(i) followed in the preparation of the Annual Accounts the applicable Accounting Standards along with proper explanations relating to material departures, if any;

(ii) selected such accounting policies and applied them consistently and made judgements and estimatesthat 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 and of the profit of the Company for that period;

(iii) 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) prepared the Annual Accounts on a going concern basis.

On behalf of the Board

Place: Guragon S C Sekar Ashok K Tandon

Date :28th April, 2010 Director Director

 
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