Home  »  Company  »  Royal Orchid Hotels  »  Quotes  »  Directors Report
Enter the first few characters of Company and click 'Go'

Directors Report of Royal Orchid Hotels Ltd.

Mar 31, 2014

Dear Shareholders,

The Board of Directors of Royal Orchid Hotels Limited (''the Company'') pleased to present the Twenty Eighth Annual Report and Audited Accounts of the Company for the financial year ended on March 31, 2014.

Financial Performance

The Company''s Standalone and Consolidated Financial Performance for the year ended March 31, 2014 is summaried below:

(Rs. in crores)

As on March 31, 2014

Financial Particulars Consolidated Standalone

Revenue from operations 142.04 83.65

Other income 7.11 8.73

Total revenues 149.15 92.38

Employee benefit expense 31.33 17.78

Other expenses 89.93 56.62

Gross Operating profit 27.89 17.98

Finance costs 20.49 7.34

Depreciation 13.85 4.12

Total expenses 155.60 85.86

Loss/Profit before tax (6.45) 6.52

Tax expense 3.84 4.41

Loss/Profit from discontinuation of business and sale of (37.86) (37.86) investments

Minority Interest 2.98 -

Loss/Profit for the year (37.49) (26.93)

(Rs. in crores)

As on March 31, 2013

Financial Particulars Consolidated Standalone

Revenue from operations 160.30 102.59

Other income 2.64 3.51

Total revenues 162.94 106.10

Employee benefit expense 36.35 23.03

Other expenses 105.85 75.30

Gross Operating profit 20.74 7.78

Finance costs 17.23 5.15

Depreciation 16.47 5.10

Total expenses 175.90 108.58

Loss/Profit before tax (12.96) (2.47)

Tax expense 0.06 (0.25)

Loss/Profit from discontinuation 3.88 4.15 of business and sale of investments

Minority Interest 1.27 -

Loss/Profit for the year (7.75) 1.43

Consolidated revenue from operations for the year ended March 31, 2014 was registered at Rs. 142.04 crores as compared to Rs. 160.30 crores. The decline in revenue was mainly due to closure of two hotels during the year under review. The hospitality sector continued to be adversely impacted by the weak economic environment both in International and Indian, besides there was significant increase in supplies in key Indian cities on the other.

The Consolidated gross operating profit during the year under review was Rs. 27.89 crores as against Rs. 20.74 crores in the previous year, registering a growth of 34.47%. The Consolidated net losses of Rs. 37.49 crores, is after considering Rs. 13.29 crore loss due to sale of fixed assets and Rs. 24.57 crores loss from operation due to discontinuance of business.

The gross operating profit of the Standalone has increased from Rs. 7.78 crores in the previous year to Rs. 17.98 crores registering a growth of 131%. Standalone losses for the year is Rs. 26.93 crores as compared to profit of Rs. 1.43 crores in financial year 2012-2013 and the loss was mainly due to discountinuation of business and sale of investments. During the year under review, two hotels Regenta One at Hyderabad and Regenta Resort in Delhi were closed as the market went down, cost of funding had gone up and return on investments was not lucrative. To avoid future losses and due to current economic impact, your company had disposed off these properties.

Key Business Developments

Royal Orchid Group, with 27 hotels, with 2373 keys, situated across India (5 in Bengaluru, 2 in Mysore, 1 in Hospet, 1 in Shimoga, 2 in Pune, 3 in Jaipur, 1 in Goa, 1 in Navi Mumbai, 1 in Mussoorie, 1 in Vadodara, 1 in Gurgaon, 1 in Mahabaleshwar, 1 in Chandigarh, 1 in Bharuch, 1 in Ahmedabad, 1 in Bhuj, 1 in Rajkot, 1 in Haridwar) goes international with 1 hotel in Tanzania on Lake Victoria. The Company is investing in a project at Tanzania and is expecting the government approvals for the project. Your Company has been continuing its expansion drive with upcoming hotels including Bombay, Jaipur and Nairobi and thus, many more new hotel projects are already in pipeline, to be established across major cities in India/abroad.

Your Company has pursued an ''Asset Light Strategy'' in expansion of its Hotels through Management Contracts. Your company is exploring in Tier two and pilgrimage destinations across India as a right strategy at the right time, as there is a boost in domestic travel. Besides, the customers prefer services of branded hotels to standalone hotels.

Your Company is taking initiatives like creating demand for domestic leisure weekend travel which is already on the rise and cashing in through quality engagement as today''s domestic traveler also has a keen interest in adventuring into areas which are rich in culture, heritage and close to nature and also areas like adventure sports.

The brand today is present across categories: 5-star Business and Leisure hotel, 4-star Business Hotels, and Longstay hotels, Resorts and Heritage proprieties. The brand Re:gen:ta is a contemporary arm of the Royal Orchid Hotel group.

With Sales Offices at Bengaluru, Delhi, Mumbai, Chennai, Jaipur, Goa, Pune, Shimoga, Mysore, Kolkata and Hyderabad, your Company is penetrating deep into the market for a better market share.

New Hotels opened during the year under review

Royal Orchid Malaika Beach Resort on Lake Victoria, Tanzania East Africa : The 50 suites Malaika Beach Resort is built on an imposing rock foundation with stunning views over Lake Victoria shoreline. The hotel is located minutes away from Mwanza Airport and a stone''s throw from Mwanza''s Central Business District, providing easy access to attractions such as Rubondo Island National Park and Western part of Serengeti National Park.

Regenta Central Harimangla, Bharuch : Located in the commercially active area of Harimangla, Regenta Central Bharuch is the first branded hotel servicing this landmark city. It is a perfect destination for conferences & meetings with ultra-modern conference facilities that consist of two Board Rooms that can accomodate up to 60 people and two pillar-less Conference Halls along with large sprawling lawns of about 12000 sqft area can take up to 1000 people.

Regenta Resort, Bhuj: It is a famous destination hub for shopping of handicraft work. One can witness ecologically rich areas and wildlife conservation areas in the district of Kutch. The resort is located in a tranquil destination surrounded by nature. The resort consists of 47 rooms and banquet amenities for M.I.C.E and weddings. Bhuj connects you to a range of civilizations and important events of South Asian history through prehistoric archaeological finds, remnants of the Indus Valley Civilization (Harappans), places associated with the Mahabharata and Alexander the Great''s march into India. (source: Gujarat Tourism)

Regenta Ahmedabad: ''Regenta'' Ahmedabad has 129 well appointed rooms with facilities like express check in, wi-fi access, multi party video conferencing and more. The hotel has 3 banquet halls which together can accommodate up to 700 guests ideal for weddings, business launch or events. It is also equipped with 6 break-out meeting rooms that can accommodate up to 20 persons with facilities for video conferencing, which include LCD projectors, sound & light systems.

Appropriations

With a view to conserve cash for future growth and investment in our businesses, the Board has not recommended distribution of dividend for the fiscal year 2013-14. No amount has been transferred to general reserve during the year.

Fixed Deposits

In terms of the provisions of Sections 58A and 58AA of the Companies Act, 1956 read with the Companies (Acceptance of Deposits Rules) 1975, the Company had no opening or closing balances and also has not accepted any fixed deposits during the year under review and as such, no amount of principal or interest was outstanding as on March 31, 2014.

Board Committees

The Company has various Committees of the Board, including Audit Committee, Nomination and Remuneration Committee, Stakeholders Relationship Committee and CSR Committee. Details of which are provided in the Corporate Governance Report.

Subsidiaries

Your Company has 13 Indian Subsidiaries and 1 Foreign Subsidiary as on the financial year ended March 31, 2014, details of which is given under notes to accounts.

Pursuant to Section 212(8) of the Companies Act, 1956, the Ministry of Corporate Affairs vide its General Circular No. 2/2011 dated February 8, 2011 has provided an exemption to companies from attaching the Directors'' Report, Balance Sheet, Statement of Profit and Loss and other documents of the subsidiary companies along with the Balance Sheet of the Holding Company, provided, such holding companies publish the audited consolidated financial statements in the Annual Report. A statement containing brief financial details of the Company''s Subsidiary for the financial year ended March 31, 2014 is included in the Annual Report. The annual accounts of the Subsidiary Companies and the related information will be made available to any Member of the Company seeking such information and are available for inspection by any Member of the Company during office hours at the Registered Office of the Company.

Awards and Recognitions

* At Bengaluru Management Association''s 61st Anniversary Awards 2014 Royal Orchid Hotels was recognized as one of the strongest pillars of Bengaluru''s Business World. Royal Orchid Hotels was the only Hotel Company awarded at this prestigious forum and Mr. Baljee was felicitated as the "Hero of Bengaluru".

* National Energy Conservation Award by Govt. of India, Ministry of Power in 2013.

* At the prestigious National Tourism Awards in New Delhi, the ministry of Tourism named Royal Orchid Central, Pune. "The Best Three Star Hotel " presented by Hon''ble Vice President of India.

* Royal Orchid Central, Grazia, Navi Mumbai won the "Best Emerging Business Hotel at the Golden Star Awards 2010.

* Royal Orchid Hotels Ltd was awarded as one of the "Bengaluru''s Hot 50 Best Brands based out of the city of Bengaluru" at Brand Summit and Awards on June 13, 2014, presented by Hindustan Times and organized by Paul Writer.

Litigation on Trade Mark

Royal Orchid Hotels Ltd. (ROHL) and Kamat Hotels Pvt. Ltd. (KHPL) are having a dispute over the use of the name ORCHID. In a suit filed by KHPL before the Bombay High Court in 2008, the Court passed a status quo order on April 5, 2011 allowing ROHL to use its trademark ROYAL ORCHID for its existing hotels and business, but not in respect of any new hotel or line of business. However, in Appeal, the Division Bench of the Bombay High Court permitted ROHL to use the trademark in respect of its new hotel at Vadodara. The Appeal is currently pending.

In June 2013 the Intellectual Property Appellate Board (IPAB) allowed the Appeals filed by ROHL against the orders passed by the Trade Marks Registry rejecting the applications for registration of its trademarks in class 42 and the IPAB ordered that ROHL''s trademarks be registered. ROHL''s marks ROYAL ORCHID and ROYAL ORCHID HOTELS now stand registered in Class 42 as per the Order of the IPAB and the said Order was challenged by KHPL in a writ petition before the Madras High Court. The same is still pending and the Madras High Court has not passed any orders that would have an adverse impact on the registration of ROHL''s trademarks.

On account of registration of its trademarks in favour of ROHL, ROHL moved the Division Bench of the Bombay High Court for stay of the Order of April 5, 2011. On July 17, 2014 the Bombay High Court passed an Order without expressing any opinion on the merits of the matter.

Other than above, no material litigation was outstanding on the date of report. Details of litigation on tax matters are disclosed in the financial statements.

Corporate Governance

Your Company recognises good corporate governance and is committed to sound corporate practices based on conscience openness and accountability for the benefit of stakeholders. A detailed report on Corporate Governance is available as a separate section in this Annual Report. Certificate of the Statutory Auditors Secretarial Auditors regarding compliance with the conditions stipulated in Clause 49 of the Listing Agreement is provided separately as an Annexure to the Corporate Governance Report.

Statutory Auditors

The retiring Statutory Auditors, M/s. Walker Chandiok & Co. LLP (formerly M/s. Walker, Chandiok & Co.,) Chartered Accountants, (Firm Registration No. 001076N/LLP No. N500013), hold office as Statutory Auditors until the conclusion of the Twenty Eighth Annual General Meeting.

The Audit Committee and the Board of Directors recommended the re-appointment of M/s. Walker, Chandiok & Co. LLP, Chartered Accountants, as the Statutory Auditors to hold office until the conclusion of the Twenty Ninth Annual General Meeting.

The Company has received a certificate from M/s. Walker Chandiok & Co. LLP, to the effect that, their re-appointment, if made, would be in accordance with the limits specified under Section 139 and 141 of the Companies Act, 2013 and that, they meet the criteria of independence. They have also confirmed their eligibility and willingness to accept office and be re-appointed as the Statutory Auditors to hold office until the conclusion of the Twenty Ninth Annual General Meeting. The proposal for their re-appointment is included in the Notice of the ensuing Annual General Meeting.

Particulars of Employees

The provisions of Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, as amended, is not applicable.

Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outflow

Your Company is continuously putting its efforts towards conservation of energy across all its units and in the process, has implemented Energy Conservation Program, which includes :

* Installation of STP Plant with tertiary system in place for final treatment and utilization of treated water for Cooling tower, Flushing, for extensive landscaping in our hotels and other cleaning purpose.

* Conversion of all the Incandescent, CFL, Fluresant, Halogen, Metal Halide, Sodium Vapour lamp to COB LED.

* Implementation of Green Building Requirements.

* Rolling out extract from HACCP, ISO14001, Green Globe etc

* Implementation of Total Productive Maintenance - Japanese Concept

* Strategic implementation of energy conservation program for Efficient operation

* Implementation of Balance score card for development of process to improve operational efficiency

* The Sewage Treatment Plants in our hotels are set up with the objective to produce a waste stream suitable for discharge or reuse in the environment, especially for the extensive landscape in all our hotels.

* Heat recovery systems are in place to tap the waste heat for productive utilization - De-super heaters are used in the Air- conditioning plant for heating up of water for domestic use in rooms and public areas.

* Solar system is used for hot water generation and lighting.

* BMS is installed for efficient operation of engineering systems.

* All new hotel projects have achieved 100% LED Lighting for energy conservation ( Bharuch - Gujarat & RO Azure, Nairobi.

In the opinion of the Board, the required particulars pertaining to technology absorption as per Rule 2 of Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 are not applicable as the hotel forms a part of the service industry and the company does not have any significant manufacturing operations.

During the year under review, your Company earned Foreign Exchange Revenue of Rs. 18.01 crores (Previous Year Rs. 20.57 crores) and the Foreign Exchange outgo on account of commission and others is Rs. 1.76 crores (Previous year Rs. 0.81 crores).

The particulars as prescribed under Section 217(1) (e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, are set out in the Annexure to this Director''s Report.

With regard to Auditor''s remark on the pending statutory dues, the Company had closed down the hotel at Delhi during the year under review and now the Company has approached the Tax authorities for the assessment and demand of statutory dues, which would be paid on issue of such demand. During the year under review, the Company has supported the subsidiaries during the previous year and due to market slowdown, there were instances of delayed payment of interest by the subsidiaries. During the year there was no continuing defaults by the Company as at the year end.

Directors'' Responsibility Statement

Your Company''s Directors make the following statement in terms of Section 217(2AA) of the Companies Act, 1956, which is to the best of their knowledge and belief and according to the information and explanations obtained by them:

I. The financial statements have been prepared in conformity with the applicable Accounting Standards issued by the Institute of Chartered Accountants of India and requirements of the Companies Act, 1956, (the Act) to the extent applicable to us; on the historical cost convention; as a going concern and on the accrual basis. There are no material departures in the adoption of the applicable Accounting Standards.

II. The Board of 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 and of the profit or loss of the Company for that period.

III. The Board of Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

IV. The financial statements have been audited by M/s. Walker Chandiok & Co. LLP, Chartered Accountants, the Company''s Statutory Auditors.

V. The Audit Committee meets periodically with the Internal Auditors and the Statutory Auditors to review the manner in which the Auditors are discharging their responsibilities and to discuss audit, internal control and financial reporting issues.

VI. 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.

Management Discussion and Analysis Report

Management Discussion and Analysis Report as required under Clause 49 of the Listing Agreement is presented in a separate section forming part of the Annual Report.

Corporate Social Responsibility (CSR)

Your Company has constituted CSR Committee and has adopted a CSR policy, including the activities to be undertaken during the year. The Company is focusing on the community education and skill development programs. Presidency Educational Trust was established to focus on the education in the field of hospitality sector. The academy is a unique institution where students are exposed to hotel operations continuously as a part of their academic curriculum. This is in addition to the mandatory industrial training.

Insider Trading Regulations

Based on the requirements under SEBI (Prohibition of Insider Trading) Regulations, 1992, as amended from time to time, the code of conduct for prevention of insider trading and the code for corporate disclosures, as approved by the Board from time to time, are enforced by your Company. The objective of this Code is to protect the interest of Shareholders at large, to prevent misuse of any price sensitive information and to prevent any insider trading activity by dealing in shares of the Company by its Directors, designated employees. The Company also adopts the concept of Trading Window Closure, to prevent its Directors, Officers, Designated Employees and other employees from trading in the securities of the company at the time when there is unpublished price sensitive information. The Board has appointed the Company Secretary as the Compliance Officer under the Code.

Internal Control Systems

The Company has a proper and adequate system of internal controls. This ensures that all the transactions are authorised, recorded and reported correctly and assets are safeguarded and protected against loss from unauthorized use or disposition.

An extensive programme of internal audits and management reviews supplements the process of internal control. Properly documented policies, guidelines and procedures are laid down for this purpose. The internal control system has been designed to ensure that the financials and other records are reliable for preparing financial and other statements and for maintaining accountability of assets.

The Company also has an Audit Committee, comprising three professionally qualified Directors, who interact with the Statutory Auditors, Internal Auditors and Management in dealing with matters within its terms of reference. This Committee mainly deals with accounting matters, financial reporting and internal controls.

Acknowledgments

Your Directors places on record, their deep sense of appreciation to all employees, support staff for adopting to the values of the Company, viz., collaborative spirit, unrelenting dedication and expert thinking, to be an expertise led organization and the Company''s valued customers. The Board immensely thank all the shareholders, investors, vendors, service providers, and academic institutions and all other stakeholders for their continued and consistent support to the Company during the year.

Your Directors would like to make a special mention of the support extended by the various Banks, Departments of Government of India, the State Governments, the Tax Authorities, the Ministry of Commerce, Ministry of Corporate Affairs, Ministry of Finance, Securities and Exchange Board of India, NSE & BSE and others and look forward to their continued support in all future endeavors.

For and on behalf of the Board of Directors,

Place : Bengaluru Chander K Baljee R V S Rao Date : August 13, 2014 Managing Director Director


Mar 31, 2013

Dear Shareholders,

The have pleasure in presenting the Twenty Seventh Annual Report of the Company together with the Audited Accounts for the year ended 31st March 2013.

Financial Results:

The performance of the Company for the fnancial year ended 31st March 2013 is summarized below:

(Rs. In Crores)

CONSOLIDATED STANDALONE

Particulars 2012-13 2011-12 2012-13 2011-12

Income from Operations 169.41 160.56 111.70 93.29

Other Income 30.30 1.86 31.17 1.68

Total Income 199.71 162.42 142.87 94.97

Gross Operating Proft 47.95 28.01 34.99 11.45

Interest (29.40) (16.29) (17.32) (4.27)

Depreciation (27.36) (14.15) (15.99) (5.37)

Proft/Loss before Tax (9.07) (2.43) 1.68 1.81

Provision for Taxation (0.05) 2.51 0.25 (0.61)

Minority Interest and Share of Proft in Associate 1.27 2.31 - -

Net proft/Net Loss after tax (7.75) (2.63) 1.43 1.20

With total consolidated revenue of Rs.199.71 Crores, your Company has reported an increase in its total consolidated revenue about by 23% for the fnancial year under review as compared to the previous fnancial year. The Gross Operating Proft has increased by 71% as compared to 2011-2012. The Proft after Tax stood at (-Rs.7.75) Crores, as against (-Rs.2.63) Crores of previous year. Rising of interest rates, increase in depreciation and increase in the operating costs are the main reasons for the losses of the company. With several new hotel projects in progress, your Company is hopeful of turnaround in the current fnancial year.

Dividend

In view of the inadequate profts and also with an intention to conserve the resources for the company''s business expansion, the Board of Directors has decided not to propose any dividend for the fnancial year 2012-13.

Corporate Debt Restructuring

The Company had fled its proposal with Corporate Debt Restructuring Cell, Mumbai for restructuring of its debts under the Corporate Debt Restructuring (CDR) mechanism. Please refer to the "Management Discussions and Analysis" for further details.

NEW HOTELS OPENED

During the year, your Company widened its geographical presence and added the following 3 new hotel properties to its portfolio:

- Hyderabad

Hotel Regenta One, with 158 guest rooms commenced its operations in August, 2012.

- Chandigarh

Hotel Regenta Central Ashok, Chandigarh, with 66 guest rooms commenced its operations in September, 2012

- Jaipur

Hotel Regenta Central, with 70 guest rooms commenced its operations in February, 2013.

NEW HOTEL PROJECTS IN PROGRESS

- Mumbai

The Construction of the Four Star Hotel at Powai, Mumbai with 220 rooms has commenced and the hotel is likely to commence its operations by 2015.

UPCOMING HOTELS

Your Company is in the process of establishing new hotels in the following locations, in near future:

Sl No Location

1 Surat

2 Bharuch

3 Lokhandwala

4 Kolkata

5 Tanzania

Business Expansion

The Company has drawn ambitious expansion plans so as to reach a target of 4000 keys by the year 2015. This will be achieved by using both organic and inorganic approaches.

Sale of stake in Parsvnath Royal Orchid Hotels Limited, Delhi

In the process of reorganization of geographical representation of our brand, the company has sold the entire stake in Parsvnath Royal Orchid Hotels Limited and the JV Cancellation Agreement was executed on March 30, 2013.

Awards

1. During the year, Hotel Royal Orchid, Bangalore was awarded Hotel of the year 2012-13 under Luxury Business by Golden Star Awards

2. Royal Orchid Central, Pune was awarded Best Business Hotel of the year 2012-13 under Midscale by Golden Star Awards.

3. EDGE 2012 Award for cloud-based CRM for Royal Orchid Hotels.

4. TIMES FOOD Awards for ''Best World Cuisine'' and ''Best Resto-bar'' - 2012.

5. Limca Book of Records for making of "Maki Sushi", a traditional Japanese festive food

6. 16 Certifcates of Excellence awards from Trip Advisor for its various hotels.

Subsidiary Companies

Your Company has 14 subsidiary companies as at 31st March, 2013, of which 10 are wholly owned subsidiaries. The Ministry of Corporate Afairs vide its General Circular No.2/2011 dated 08th February, 2011 has exempted the companies for not attaching the detailed fnancial statements of each subsidiary company with this report.

During the year under review, Cosmos Premises Private Limited had become a subsidiary of your Company by virtue of composition of Board of Directors.

Your company had increased its stake in one of its subsidiaries viz., Maruti Comforts & Inn Private Limited by acquiring 1,98,536 shares. Further, the company had also acquired 15,00,000 shares in Amartara Hospitality Private Limited.

However, in compliance with the terms of the said exemption approval of MCA, a statement showing the relevant details of the Subsidiary Companies is enclosed as a part of this Annual Report. The annual accounts of the subsidiary companies and the related detailed information will be made available to the holding and subsidiary company investors seeking such information at any point of time and also on the website of the Company, www.royalorchidhotels.com

Change in Directorate

Mr. Naresh K Malhotra resigned from the Board on March 30, 2013. The Board wish to place on record the valuable contribution made by Mr. Naresh K Malhotra to the Company and to the deliberations of the Board and its Committees.

Pursuant to the provisions of Section 260 of the Companies Act, 1956, the Board of Directors at their meeting held on 05th August, 2013 appointed Mr. K Jairaj as an additional Director. Mr. K Jairaj holds ofce up to the date of the ensuing

Annual General Meeting. The Company has received a notice of candidature in writing under Section 257 of the Companies Act, 1956 proposing for the ofce of director.

Mr. R V S Rao retires by rotation at the ensuing Annual General Meeting and being eligible, ofers himself for re-appointment.

A brief resume of the said directors is annexed to this report. The Board recommends their appointments by the members at the ensuing Annual General Meeting.

Auditors

The Statutory Auditors M/s. Walker, Chandiok & Co., Chartered Accountants, Bengaluru, retire at the ensuing Annual General Meeting and have confrmed their eligibility and willingness to accept ofce, if re-appointed.

Auditors'' Report

Auditors'' Report as issued by M/s. Walker, Chandiok & Co., Chartered Accountants, Bengaluru, contains certain observations and which are replied by the Board as provided u/s. 217(3) of the Companies Act, 1956.

In respect of the comments of the Auditors on the frequency of the physical verifcation of fxed assets, efective steps would be taken to complete the same

As regards to comment on internal controls with respect to purchase and recording of fxed assets, the efective steps have already been taken to correct and strengthen the same.

In respect of delay in remittance of statutory dues, the Audit Committee advised to take the corrective steps. Subsequently, the necessary arrangements have been made to remit the same to the respective departments.

Public Deposits

The Company has not accepted any fxed deposits from Public during the year.

Management Discussion and Analysis Report

The Report as required under the Clause 49 of the Listing Agreement is annexed and forms part of the Directors'' Report.

Corporate Governance

The Report on Corporate Governance along with a Certifcate from a Practicing Company Secretary confrming the Compliance is annexed and forms part of the Directors'' Report.

Personnel

The details of employees as specifed under section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 as amended upto date is not applicable.

Additional Information in accordance with the provisions of section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988

- Conservation of energy

Your company is continuously putting its eforts towards conservation of energy across all its units and in the process, has implemented a well documented Energy Conservation Program, which includes use of:

- Energy efcient lighting- LED

- BMS - Building automation system

- VFD -Variable frequency drive for motors

- Modulating valves to control the fow

- Heat exchanger systems for utilizing the waste heat

- Solar system for generating hot water

- Sewerage Treatment Plants - for reuse of water for gardening, Cooling tower, fushing and cleaning purpose

- Latest energy conservation gadgets

- Technology absorption

In the opinion of the Board, the required particulars pertaining to technology absorption as per Rule 2 of Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 are not applicable as the hotel forms a part of the service industry and the company does not have any signifcant manufacturing operations.

- Foreign Exchange Earnings and Outgo

During the year under review, your Company earned Foreign Exchange Revenue of Rs.20.57 Crores (Previous Year Rs.37.03 Crores) and the Foreign Exchange outgo on account of commission and others is Rs.0.81 Crores (Previous year Rs.1.82 Crores).

Safety and security

Keeping in mind the security threats to the hospitality industry in India, your Company has stepped up its eforts to ensure an environment of wellbeing, safety and security for all its guests and co-workers. Our guest foors as well as all public areas are well equipped with closed circuit cameras, metal detectors and alarm system. Moreover, guest room doors are installed with computerized electronic card locking system to enhance security. Safety deposit lockers have been placed in all rooms to store valuables. Movement of all vehicles, employees, vendors and guests is monitored, scanned and electronic data preserved in our archives. An Emergency Response Team exists in all the hotels, which is always on a standby mode to respond immediately to any unforeseen emergency in the hotel.

Trade Mark Case

In a suit fled by Kamat Hotels (India) Limited against the Company for alleged infringement and passing of of Trade Mark "the Orchid", a single Judge of the Hon''ble High Court of Bombay vide its Interim Order dated 5th April 2011, has allowed our Company to continue with its existing hotels and business under its Trade Mark but restrained the use of the same, for any new hotel or line of business. A division bench of the Bombay High Court has admitted the appeal fled by the Company against the above interim order and granted a partial stay allowing the Company to open its new hotel at Vadodara in May 2011.

Further, Intellectual Property Appellate Board (IPAB) had passed favourable orders on which Kamat Hotels (India) Limited has fled suits against our company in the Hon''ble High Court of Chennai.

In addition to the above, IPAB, vide its order dated 18.06.2013, has allowed the Company''s appeal against the refusal of the Registrar of Trademarks to register the trademarks.

Briefy, it is the case of our Company that we are the prior adopter and user of the mark "the Orchid" in relation to Hotel Business and that there has been inordinate delay in fling the suit and acquiescence by Kamat Hotels, disentitling it to the reliefs claimed

Directors'' Responsibility Statement

Pursuant to the provisions of Section 217(2AA) of the Companies Act, 1956, the Board of Directors, based on the representations received from the Operations Management, hereby confrms that:

i. In the preparation of the annual accounts for the year ended 31st March 2013, the applicable accounting standards have been followed and that there are no material departures.

ii. It has in the selection of the accounting policies, consulted the Statutory Auditors and has 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 afairs of the Company as at 31st March 2013 and of the proft of the Company for that period.

iii. It has taken proper and sufcient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities, to the best of its knowledge and ability. There are however, inherent limitations, which should be recognized while relying on any system of internal control and records.

iv. It has prepared the annual accounts for the year ended 31st March 2013, ''on a going concern basis''.

Acknowledgments

Your Directors record their sincere thanks for the valuable support extended by the customers, suppliers, investors, bankers and other statutory authorities. Your Directors acknowledge with deep appreciation the dedicated services rendered by the employees of the Company. Your Directors express their sincere thanks to all the shareholders for the confdence reposed in the Management and look forward to their continued support.



For and on behalf of the Board of Directors,

Bengaluru Chander K Baljee

05th August 2013 Chairman & Managing Director


Mar 31, 2012

The have pleasure in presenting the Twenty Sixth Annual Report of the Company together with the Audited Accounts for the year ended 31st March 2012.

Financial Results:

The performance of the Company for the financial year ended 31st March 2012 is summarized below:

(Rs. In Crores)

CONSOLIDATED STANDALONE

Particulars 2011-12 2010-11 2011-12 2010 -11

Income from Operations 160.56 152.13 93.29 92.87

Other Income 1.86 2.61 1.68 2.14

Total Income 162.42 154.74 94.97 95.01

Gross Operating Profit 28.01 42.07 11.45 22.58

Interest (16.29) (11.28) (4.27) (2.26)

Depreciation (14.15) (13.71) (5.37) (5.61)

Profit before Tax (2.43) 17.08 1.81 14.71

Provision for Taxation 2.51 (5.61) (0.61) (5.05)

Minority Interest and Share of Profit in Associate 2.31 0.75 - -

Net profit after tax (2.63) 12.22 1.20 9.66

With total consolidated revenue of Rs.162.42 Crores, your Company has reported an increase in its total consolidated revenue about by 5% for the financial year under review as compared to the previous financial year. The Gross Operating Profit has decreased by 33% as compared to 2010-2011. The Profit after Tax stood at (-Rs.2.63) Crores, as against Rs. 12.22 Crores of previous year. Rising of interest rates and increase in the operating costs are the main reasons for the losses of the company. With several new hotel projects in progress, your Company is hopeful of turnaround in the current financial year.

Dividend

In view of the reduction in the profits and also with an intention to conserve the resources for the company's ongoing new hotel projects, the Board of Directors has decided not to propose any dividend for the financial year 2011-12.

NEW HOTELS OPENED

Your Company widened its network and added the following 4 new hotel properties to its portfolio:

- Vadodara

Hotel Royal Orchid Central, Vadodara, with 81 guest rooms, commenced its operations in May, 2011.

- Gurgaon

Central Blue Stone, Gurgaon, with 46 rooms commenced its operations in November, 2011.

- New Delhi

Regenta Hotel & Convention Centre, New Delhi, with 48 guest rooms, commenced its operations in December 2011.

- Mahabaleshwar

Regenta MPG Club, Mahabaleshwar, with 32 guest rooms, commenced its operations in May 2012.

NEW HOTEL PROJECTS IN PROGRESS

- Hyderabad

The Construction of the Five Star Hotel with 233 rooms at Hyderabad is in the advanced stages of completion. The first phase of the Five Star Hotel with 108 rooms is likely to commence their operations by August, 2012.

- Mumbai

The Construction of the Four Star Hotel at Powai, Mumbai with 220 rooms has commenced and the hotel is likely to commence its operations by 2014.

UPCOMING PROJECTS

Your Company is in the process of establishing new hotels in the following locations, in near future:

Sl No Location

1 Surat

2 Bharuch

3 Chennai

4 Kolkata

5 Lokhandwala

Business Expansion

The Company has drawn ambitious expansion plans so as to reach a target of 4000 keys by the year 2015. This will be achieved by using both organic and inorganic approaches.

Further, the company has taken steps to open new hotels in new brand "Re:gen:ta." Regenta Hotel & Convention Centre, New Delhi, was opened during December, 2011 under the new brand.

Sale of stake in Royal Orchid Ahmedabad Private Limited

In the process of reorganization of geographical representation of our brand, the company has sold the entire stake in Royal Orchid Ahmedabad Private Limited and the definitive agreement was executed on April 18, 2012.

Awards

i. During the year, Royal Orchid Central, Bengaluru was awarded "National Energy Conservation Award, 2011". The award was presented by the Ministry of Power, Government of India.

ii. Royal Orchid Central, Ahmedabad won the "Hospitality Leadership" at the GOLDEN STAR AWARDS, instituted by Stars of the Industry Group.

iii. Royal Orchid Central, Ahmedabad won the "First Class Business Award".

iv. Royal Orchid Central Grazia, Navi Mumbai won the "Most admired Customer Services of the year" award.

v. Royal Orchid Suites, Bengaluru won the "National Tourism Award for Best Business Hotel" award.

vi. Ramada, Bengaluru managed by Royal Orchid Hotels Limited is the only hotel in India to have won the bronze awards for two categories mentioned below during the Wyndham Hotel Group Brand Conference held in Las Vegas this April 2012: a) Quality Customer feedback and guest satisfaction scores b) most engaged front office team.

vii. 16 Certificate of Excellence awards from Trip Advisor for its various hotels.

Subsidiary Companies

Your Company has 14 subsidiary companies as at 31st March, 2012, of which 11 are wholly owned subsidiaries. The Ministry of Corporate Affairs vide its General Circular No.2/2011 dated 08th February, 2011 has exempted the companies for not attaching the detailed financial statements of each subsidiary company with this report.

However, in compliance with the terms of the said exemption approval of MCA, a statement showing the relevant details of the Subsidiary Companies is enclosed as a part of this Annual Report. The annual accounts of the subsidiary companies and the related detailed information will be made available to the investors seeking such information at any point of time and also avilable on the website of the Company, www.royalorchidhotels.com

Directors

Mr. Naresh K Malhotra retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment.

Auditors

The Statutory Auditors M/s. Walker, Chandiok & Co., Chartered Accountants, Bengaluru , retire at the ensuing Annual General Meeting and have confirmed their eligibility and willingness to accept office, if re-appointed.

Auditors' Report to Shareholders

In respect of the comments of the Auditors on the frequency of the physical verification of fixed assets, as advised by the Audit Committee of Directors, physical verification of fixed assets would be carried out during the financial year 2012-13 and once in a year, hereinafter.

In respect of strengthening the Internal Controls of purchase of fixed assets, the Audit Committee advised the Management to put the system in place.

In respect of delay in repayment of dues to banks and financial institutions, the Audit Committee advised to take the corrective steps.

Public Deposits

The Company has not accepted any fixed deposits from Public during the year.

Management Discussion and Analysis Report

The Report as required under the Clause 49 of the Listing Agreement is annexed and forms part of the Directors' Report. Corporate Governance

The Report on Corporate Governance along with a Certificate from a Practicing Company Secretary confirming the Compliance is annexed and forms part of the Directors' Report.

Employess Stock Option Scheme (ESOS)

The details of the ESOS as required under the Securities and Exchange Board of India (Employee Stock Otion Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 are annexed and from part of the Directors' Report.

Personnel

As required under Section 217(1 )(e) of the Companies Act, 1956, read with the Rules thereunder, forms part of this report. However, as per the provisions of Section 219(1)(b)(iv) of the Companies Act, 1956, the reports and accounts are being sent to all shareholders of the Company excluding the statement of particulars of employees. Any shareholder interested in obtaining a copy may write to the Company Secretary at the Registered Office of the Company.

Additional Information in accordance with the provisions of section 217(1) (e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988

- Conservation of energy

Your company is continuously putting its efforts towards conservation of energy across all its units and in the process, has implemented a well documented Energy Conservation Program, which includes use of:

- Energy efficient lighting- LED

- BMS - Building automation system

- VFD -Variable frequency drive for motors

- Modulating valves to control the flow

- Heat exchanger systems for utilizing the waste heat

- Solar system for generating hot water

- Sewerage Treatment Plants - for reuse of water for gardening, Cooling tower, flushing and cleaning purpose

- Latest energy conservation gadgets

- Technology absorption

In the opinion of the Board, the required particulars pertaining to technology absorption as per Rule 2 of Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 are not applicable as the hotel forms a part of the service industry and the company does not have any significant manufacturing operations.

- Foreign Exchange Earnings and Outgo

During the year under review, your Company earned Foreign Exchange Revenue of Rs. 37.03 Crores (Previous Year Rs. 37.42 Crores) and the Foreign Exchange outgo on account of commission and others is Rs. 2.01 Crores (Previous year Rs. 2.26 Crores).

Safety and security

Keeping in mind the security threats to the hospitality industry in India, your Company has stepped up its efforts to ensure an environment of wellbeing, safety and security for all its guests and co-workers. Our guest floors as well as all public areas are well equipped with closed circuit cameras and alarm system. Moreover, guest room doors are installed with computerized electronic card locking system to enhance security. Safety deposit lockers have been placed in all rooms to store valuables. Movement of all vehicles, employees, vendors and guests is monitored, scanned and electronic data preserved in our archives. An Emergency Response Team exists in all the hotels, which is always on a standby mode to respond immediately to any unforeseen emergency in the hotel.

Trade Mark Case

In a suit filed by Kamat Hotels (India) Limited against the Company for alleged infringement and passing off of Trade Mark 'the Orchid', a single Judge of the Hon'ble High Court of Bombay vide its Interim Order dated 5th April 2011, has allowed our Company to continue with its existing hotels and business under its Trade Mark but restrained the use of the same, for any new hotel or line of business. A division bench of the Bombay High Court has admitted the appeal filed by the Company against the above interim order and granted a partial stay allowing the Company to open its new hotel at Vadodara in May 2011.

Further, Intellectual Property Appellate Board (IPAB) had passed favourable orders on which Kamat Hotels (India) Limited has filed suits against our company in the Hon'ble High Court of Chennai.

Briefly, it is the case of our Company that we are the prior adopter and user of the mark 'the Orchid' in relation to Hotel Business and that there has been inordinate delay in filing the suit and acquiescence by Kamat Hotels, disentitling it to the reliefs claimed.

Directors' Responsibility Statement

Pursuant to the provisions of Section 217(2AA) of the Companies Act, 1956, the Boa rd of Directors, based on the representations received from the Operations Management, hereby confirms that:

i. In the preparation of the annual accounts for the year ended 31st March 2012, the applicable accounting standards have been followed and that there are no material departures.

ii. It has in the selection of the accounting policies, consulted the Statutory Auditors and has 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 as at 31st March 2012 and of the profit of the Company for that period.

iii. It has taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities, to the best of its knowledge and ability. There are however, inherent limitations, which should be recognized while relying on any system of internal control and records.

iv. It has prepared the annual accounts for the year ended 31st March 2012, 'on a going concern basis'.

Acknowledgments

Your Directors record their sincere thanks for the valuable support extended by the customers, suppliers, investors, bankers and other statutory authorities. Your Directors acknowledge with deep appreciation the dedicated services rendered by the employees of the Company. Your Directors express their sincere thanks to all the shareholders for the confidence reposed in the Management and look forward to their continued support.

For and on behalf of the Board of Directors,

Bengaluru Chander K Baljee

30th May 2012 Chairman & Managing Director


Mar 31, 2011

Dear Shareholders,

We have pleasure in presenting the Twenty Fifth Annual Report of the Company together with the Audited Accounts for the year ended 31 st March 2011.

Financial Results:

The performance of the Company forthe financial year ended 31 st March 2011 is summarized below:

(Rs. in Crores)

CONSOLIDATED STANDALONE

Particulars 2010-11 2009-10 2010-11 2009-10

Income from Operations 152.07 120.45 92.87 77.83

Other Income 2.67 1.42 2.14 1.14

Total Income 154.74 121.87 95.01 78.97

Gross Operating Profit 42.07 28.82 22.58 19.35

Interest (11.28) (7.59) (2.26) (2.41)

Depreciation (13.71) (12.37) (5.61) (5.61)

Profit before Tax 17.08 8.86 14.71 11.33

Provision for Taxation (5.61) (3.93) (5.05) (3.05)

Minority Interest and Share 0.75 2.04 - - of Profit in Associate

Net profit after tax 12.22 6.97 9.66 8.28

With total consolidated revenue of Rs.154.74 Crores, your Company has for the financial year under review reported an increase in its total consolidated revenue by 27% as compared to the previous financial year. The Gross Operating Profit has also shown an increase of 46% as compared to 2009-2010. The Profit after Tax stood at Rs. 12.22 Crores, as against Rs. 6.97 Crores of previous year, showing an increase by 75%. With improving economic conditions and several new hotel projects in progress, your Company is hopeful of continuing this trend in the current financial year also.

Dividend

The Board of Directors recommends the payment of Rs.1.50 (one rupee and fifty paisa) per equity share (15% on face value Rs.10) for the year ended 31 st March 2011, subject to the approval of shareholders. The outflow of funds on account of payment of dividend, including tax on dividend would beRs.476 Lacs.

NEW HOTELS OPENED

During the year, your Company widened its network and added the following 5 new hotel properties to its portfolio:

- Hospet

Royal Orchid Central Kireeti, Hospet, with 135 rooms commenced its operations in October, 2010.

-Mussoorie

Royal Orchid Fort Resort, Mussoorie, with 60 guest rooms, commenced its operations in December 2010.

-Shimoga

Royal Orchid Central, Shimoga, with 108 guest rooms, commenced its operations in March, 2011.

- Jaipur

Hotel Royal Orchid, Jaipur, a Five Star Hotel, with 139 guest rooms, commenced its operations in March, 2011.

-Vadodara

Hotel Royal Orchid, Vadodara with 81 guest rooms, commenced its operations in May, 2011.

NEW HOTEL PROJECTS IN PROGRESS

- Hyderabad

The Construction of the Five Star Hotel with 233 rooms at Hyderabad and a Suites hotel with 49 rooms in the same location is in the advanced stages of completion. The first phase of the Five Star Hotel with 108 rooms and the Suites Hotel are likely to commence their operations by October, 2011.

-Mumbai

The Construction of the Four Star Hotel at Powai, Mumbai with 260 rooms has commenced and the hotel is likely to commence its operations by 2013.

UPCOMING PROJECTS

Your Company is in the process of establishing new hotels in the following locations, in nearfuture:

SI No Location

1 Mumbai

2 Surat

3 Delhi

4 Bharuch

5 Greater Noida (UP)

6 Faridabad

7 Chennai

8 Kolkata

9 Shimla

Business Expansion

The Company has drawn ambitious expansion plans so as to reach a target of 4000 keys by the year 2015. This will be achieved by using both organic and inorganic approaches.

Awards

I. During the year, Hotel Royal Orchid Central, Pune was declaredas "Hotel of the Year" in the First Class Business Hotel Category at the GOLDEN STAR AWARDS 2010. The award was presented by the Ministry of Tourism, Government of India.

ii. Royal Orchid Central Grazia.Navi Mumbai wonthe"Best Emerging Hotel of theYear-2010-11"attheGOLDEN STAR AWARDS, instituted by Stars of the Industry Group.

iii. Royal Orchid Beach Resort & Spa, Goa won the Pegas Award for Excellence.

iv. Your Company is also proud that an executive of Royal Orchid Hotel was awarded the "Most Admired Executive House Keeper" award at the GOLDEN STARAWARDS 2010

v. Royal Orchid Central Ahmedabad was awarded the "Most Admired General Manager of theYear" at the GOLDEN STARAWARDS.

vi. Royal Orchid Central Grazia, Navi Mumbai won the "Most admired GM of the year" award at the GOLDEN STAR AWARDS, instituted by Stars of the Industry Group.

Subsidiary Companies

Your Company has 14 subsidiary companies as at 31st March 2011, of which 11 are wholly owned subsidiaries. Your Company has obtained the required approval from the Central Government, Ministry of Corporate Affairs (MCA) exempting from attaching the detailed financial statements of each Subsidiary Company with this Annual Report, pursuant to the provisions of Section 212(8)of the Companies Act,1956( letter dated 17/01/2011 vide No. 47/5/2011-CL- III) and accordingly, only a Consolidated Financial Statement is presented with this Annual Report, along with the Standalone Financial Results of the Company.

However, in compliance with the terms of the said exemption approval of MCA, a statement showing the relevant details of the Subsidiary Companies is enclosed as a part of this Annual Report. The annual accounts of the subsidiary companies and the related detailed information will be made available to the holding and subsidiary company investors seeking such information at any point of time and also on the website of the Company, www.royalorchidhotels.com

Central Government Approvals

During the year, your company has obtained the approval of Central Government for payment of remuneration to Mr. C K Baljee, Chairman & Managing Director and Mr. Keshav Baljee, President of the Company, for the year ended 31st March 2011.

Directors

The Director Mr. Jaithirth Rao resigned with effect from 16th May 2011 and the Directors wish to place on record their sincere thanks for his valuable contribution to the Board, during his tenure.

The Director Mr. RVS Rao retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment.

Mr. Vijay K Rekhi was appointed as an Independent Director of the Company effective 6th July 2011. As Mr. Vijay K Rekhi shall hold office, up to the date of the ensuing Annual General Meeting, the consent of Shareholders is sought for his appointment at the said meeting.

Auditors

The Statutory Auditors M/s. Walker, Chandiok & Co., Chartered Accountants, Bangalore, retire at the ensuing Annual General Meeting and have confirmed their eligibility and willingness to accept office, if re-appointed.

Auditors' Report to Shareholders

In respect of the comments of the Auditors on the frequency of the physical verification of fixed assets, as advised by the Audit Committee of Directors, physical verification of fixed assets would be carried out once in a year, hereinafter.

Public Deposits

The Company has not accepted any fixed deposits from Public during the year.

Management Discussion and Analysis Report

The Report as required underthe Clause 49 of the Listing Agreement is annexed and forms part of the Directors' Report.

Corporate Governance

The Report on Corporate Governance along with a Certificate from a Practicing Company Secretary confirming the Compliance is annexed and forms part of the Directors' Report.

Employees Stock Option Scheme (ESOS)

The details of the ESOS as required underthe Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 are annexed and form part of the Directors' Report.

Personnel

In terms of Companies (Particulars of Employees) Rules, 1975 read with the Notification dated 31st March 2011, issued by the Ministry of Corporate Affairs, New Delhi, the details of employees as required to be furnished under Section 217 (2A) of the Companies Act, 1956 are not applicable to the Company.

Additional Information in accordance with the provisions of section 217(1) (e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988

- Conservation of Energy

Your company is continuously putting its efforts towards conservation of energy across all its units and in the process, has implemented a well documented Energy Conservation Program, which includes use of:

- Energy efficient lighting- LED

- BMS - Building automation system

- VFD -Variable frequency drive for motors

- Modulating valves to control the flow

- Heat exchanger systems for utilizing the waste heat

- Solar system for generating hot water

- Sewerage Treatment Plants - for reuse of water for gardening, Cooling tower, flushing and cleaning purpose

- Latest energy conservation gadgets

- Technology absorption

In the opinion of the Board, the required particulars pertaining to technology absorption as per Rule 2 of Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 are not applicable as the hotel forms a part of the service industry and the company does not have any significant manufacturing operations.

- Foreign Exchange Earnings and Outgo

During the year under review, your Company earned Foreign Exchange Revenue of Rs. 37.41 Crores (Previous Year Rs.30.87 Crores) and the Foreign Exchange outgo on account of commission and others is Rs.2.26 Crores (Previous year Rs.0.85 Crores).

Safety and security

Keeping in mind the security threats to the hospitality industry in India, your Company has stepped up its efforts to ensure an environment of well being, safety and security for all its guests and co-workers. Our guest floors as well as all public areas are well equipped with closed circuit cameras and alarm system. Moreover, guest room doors are installed with computerized electronic card locking system to enhance security. Safety deposit lockers have been placed in all rooms to store valuables. Movement of all vehicles, employees, vendors and guests is monitored, scanned and electronic data preserved in our archives. An Emergency Response Team exists in all the hotels, which is always on a standby mode to respond immediately to any unforeseen emergency in the hotel.

Trade Mark Case

In a suit filed by Kamat Hotels (India) Limited against the Company for alleged infringement and passing off of Trade Mark 'the Orchid', a single Judge of the Hon'ble High Court of Bombay vide its Interim Order dated 5th April 2011, has allowed our Company to continue with its existing hotels and business under its Trade Mark but restrained the use of the same, for any new hotel or line of business. A division bench of the Bombay High Court has admitted the appeal filed by the Company against the above interim order and granted a partial stay allowing the Company to open its new hotel at Vadodara in May 2011. The appeal is now posted for hearing in July 2011.

Briefly, it is the case of our Company that we are the prior adopter and user of the mark 'the Orchid' in relation to Hotel Business and that there has been inordinate delay in filing the suit and acquiescence by Kamat Hotels, disentitling it to the reliefs claimed.

Directors' Responsibility Statement

Pursuant to the provisions of Section 217(2AA) of the Companies Act, 1956, the Board of Directors, based on the representations received from the Operations Management, hereby confirms that:

I. In the preparation of the annual accounts forthe year ended 31st March 2011, the applicable accounting standards have been followed and that there are no material departures.

ii. It has in the selection of the accounting policies, consulted the Statutory Auditors and has 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 as at 31 st March 2011 and of the profit of the Company for that period.

iii. It has taken proper and sufficient care forthe maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities, to the best of its knowledge and ability. There are however, inherent limitations, which should be recognized while relying on any system of internal control and records.

iv. It has prepared the annual accounts forthe year ended 31 st March 2011, 'on a going concern basis'.

Acknowledgments

Your Directors record their sincere thanks for the valuable support extended by the customers, suppliers, investors, bankers and other statutory authorities. Your Directors acknowledge with deep appreciation the dedicated services rendered by the employees of the Company. Your Directors express their sincere thanks to all the shareholders for the confidence reposed in the Management and look forward to their continued support.

For and on behalf of the Board of Directors,

Bangalore,

6th July 2011 Chander K Baljee

Chairman & Managing Director


Mar 31, 2010

We have pleasure in presenting the Twenty Fourth Annual Report of the Company together with the Audited Accounts for the year ended 31st March 2010.

Financial Results:

The performance of the Company for the financial year ended 31st March 2010 is summarized below:

(Rs. in Crores)

CONSOLIDATED STANDALONE

Particulars 2009 -10 2008 - 09 2009 -10 2008 - 09

Income from Operations 119.27 140.16 77.83 94.32

Other Income 3.52 3.17 1.14 2.19

Total Income 122.79 143.33 78.97 96.51

Gross Operating Profit 28.82 45.96 19.35 32.38

Interest (7.59) (6.71) (2.41) (1.65)

Depreciation (12.37) (11.09) (5.61) (5.69)

Prior period income --- 1.11 --- 1.11

Profit before Tax 8.86 29.27 11.33 26.15

Provision for Taxation (3.93) (8.13) (3.05) (6.86)

Minority Interest and Share 2.04 (1.15) ---- ----

of Profit in Associate

Net profit after tax 6.97 19.99 8.28 19.29

Your Company has earned total consolidated revenue of Rs. 122.79 Crores during the year under review, as against the previous years revenue of Rs. 143.33 crores, a decrease of 14%. The Net Profit after tax was lower by Rs. 13.02 Crores as compared to the previous year, mainly due to reduction in the Total Revenue to the extent of Rs. 20.54 Crores. The recessionary trends prevailed during a major part of the financial year 2009-10 and the impact caused by the terror attacks on hotel properties in Mumbai during the previous year continued its negative impact on the hospitality industry to a substantial extent and thus, affected the business performance of your Company.

Dividend

In view of the reduction in the profits and also with an intention to conserve the resources for the Companys ongoing new hotel projects, the Board of Directors has recommended not to propose any dividend for the financial year 2009-10.

Existing Hotels

During the year under review, the Company has completed the renovation work pertaining to 39 rooms and Lobby at Royal Orchid Galaxy Resort, Goa and the renovation work for the rest of the rooms is in progress. The expansion work at Royal Orchid Resort, Bangalore with respect to Coffee Shop was also completed, during the year. The Company terminated the operations of Peppermint Hotel at Hyderabad effective 28th February 2010 for business reasons.

New Hotels Opened

Ahmedabad

During the year Royal Orchid Central, Ahmedabad, with 104 rooms, commenced its operations in December 2009.

Navi Mumbai

Hotel Royal Orchid Central Grazia, Vashi, Navi Mumbai with 67 rooms, commenced its operations in April 2010.

New Hotel Projects in progress

Jaipur

The construction of the Five Star Hotel with 139 rooms at Jaipur is progressing well as per plans and the Company has already obtained the sanction of Long Term Loan of Rs.70 Crores required for the project from IDBI Bank Limited. The Hotel is likely to commence its operations in the current financial year.

Hyderabad

The Construction of the Five Star Hotel with 233 rooms at Hyderabad is progressing well as per plans and the Company has already obtained the sanction of Long Term Loan of Rs.100 Crores required for the project from the Consortium of State Bank of Hyderabad, State Bank of India and State Bank of Mysore. The hotel is likely to commence its operations in the current financial year.

Upcoming Projects

Mumbai

During the year, the Company has entered into a Joint Venture with Amartara Hospitality Private Limited, for constructing and operating a 4 star hotel under the brand name, Royal Orchid Central, with 260 rooms and other facilities, at Powai, Mumbai. The hotel is likely to commence its operations by 2012.

Shimoga, Hospet & Mussoorie

The Company has already entered into agreements for operating New Hotels under the brand name, Royal Orchid Central, in Shimoga, Hospet and Mussoorie, which are likely to commence their operations during the current financial year.

Business Expansion

Your Company presently controls room inventory of 1,104 through its 13 hotels across 7 major cities in India and has drawn ambitious expansion plans to add about 1,000 rooms by the end of the next financial year and to reach the size of 4000 rooms by the year 2015. This will be achieved by using both organic and inorganic approaches. The Company is in the process of concluding a few more management contracts for operating hotels at certain strategic locations, during the current year.

Subsidiary Companies

During the year under review, Satkar Realities Private Limited, Ahmedabad had become a wholly owned subsidiary of the Company and the name of the said Company was subsequently changed as Royal Orchid Ahmedabad Private Limited.

Your Company has already acquired 64.5% of paid up Equity Capital of Amartara Hospitality Private Limited, the owner of the land at Powai, Mumbai.

With the above, your Company has 14 Subsidiary Companies as at the year ended 31st March 2010 and of which, 11 are wholly owned subsidiaries.

Central Government Approvals

The Company has obtained the required approval from the Central Government, Ministry of Corporate Affairs (MCA) exempting from attaching the detailed financial statements of each Subsidiary Company with this Annual Report, pursuant to the provisions of Section 212(8) of the Companies Act, 1956 and accordingly, only a Consolidated Financial Statement is presented with this Annual Report, along with the Standalone Financial Results of the Company. However, in compliance with the terms of the said exemption approval of MCA, a statement showing the relevant details of the Subsidiary Companies is enclosed as a part of this Annual Report. The annual accounts of the Subsidiary Companies shall be made available to the interested members at any time. The company also received the approval of MCA for the remuneration of Rs. 120 Lacs paid to Managing Director during the financial year 2009-10 on 21st June 2010.

Awards

During the year, the Hotel Royal Orchid Central, Pune was declared as winner of the National Tourism Award 2008-09, for the best hotel by the Ministry of Tourism, Government of India. The Hotel also received the Golden Star Award, for excellence in food hospitality, service and food retailing, which is one of the highest honors in the hotel industry.

Directors

The Director Mr. Naresh K Malhotra retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment.

Auditors

The Statutory Auditors M/s. Walker, Chandiok & Co., Chartered Accountants, Bangalore, retire at the ensuing Annual General Meeting and have confirmed their eligibility and willingness to accept office, if re-appointed.

Public Deposits

The Company has not accepted any fixed deposits during the year.

Management Discussion and Analysis Report

The Report as required under the Listing Agreements with the Stock Exchanges is annexed and forms part of the Directors Report.

Corporate Governance

The Report on Corporate Governance along with a Certificate from a Practicing Company Secretary confirming the Compliance is annexed and forms part of the Directors Report.

Employees Stock Option Scheme (ESOS)

The details of the ESOS as required under the Securities and Exchange Board of India (Employees Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 are annexed and form part of the Directors Report.

Personnel

The details of Employees as required under Section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 is annexed and forms part of the Directors Report.

Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo:

Your Company continues to put in its best efforts to bring in considerable savings in power consumption and also ensuring optimum utilisation of available resources. A well documented Standard Operating Procedure is already in place in this regard and the operation of the same is closely monitored by the senior management of the company.

Your Company has been consistently upgrading its technical equipment with the use of state of the art technologies in most of the functional areas relating to the operations of the Company. All the Hotels managed by the Company are well equipped with wi-fi internet connectivity, offering utmost comforts to its valuable customers.

During the year under review, your Company earned Foreign Exchange of Rs. 30.87 Crores as against Rs. 47.37 Crores in the previous year. The outgo on account of commission and others is Rs. 2.56 Crores as against Rs. 3.09 Crores the previous year.

Directors Responsibility Statement

Pursuant to the provisions of Section 217(2AA) of the Companies Act, 1956, the Board of Directors, based on the representations received from the Operations Management, hereby confirms that:

I. In the preparation of the annual accounts for the year ended 31st March 2010, the applicable accounting standards

have been followed and that there are no material departures.

ii. It has in the selection of the accounting policies, consulted the Statutory Auditors and has 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 as at 31st March 2010 and of the profit of the Company for that period.

iii. It has taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities, to the best of its knowledge and ability. There are however, inherent limitations, which should be recognized while relying on any system of internal control and records.

iv. It has prepared the annual accounts for the year ended 31st March 2010, on a going concern basis.

Acknowledgments

Your Directors wish to place on record their sincere thanks for the support extended by the customers, suppliers, investors, bankers, Central and State Governments and other statutory authorities. Your Directors acknowledge with appreciation the dedicated services rendered by the employees of the Company.

Your Directors express their sincere thanks to all the shareholders for the confidence reposed in the Management and look forward to their continued support.

For and on behalf of the Board of Directors,

Bangalore,

31st July 2010 Chander K Baljee

Chairman & Managing Director

 
Subscribe now to get personal finance updates in your inbox!