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Directors Report of Viceroy Hotels Ltd.

Mar 31, 2015

Dear Members,

The Directors are pleased to submit 50th Annual Report of Viceroy Hotels Limited (VHL) along with the audited financial statements for the Financial Year ended 31st March, 2015. Consolidated performance of the Company and its subsidiaries has been referred to whereverrequired.

PERFORMANCE / FINANCIAL RESULTS

The financial performance of the Company, for the year ended 31st March, 2015 is summarized below:

(Rupees in Lakhs)

PARTICULARS STANDALONE

2014-15 2013-14

Income from Operations 7730.11 7102.50

Other Income 2898 2427

Total Revenue 7759.08 7126.77

Profit before Interest and Depreciation (3058.43) 2858.48

Interest 2414.34 2313.71

Depreciation 1152.35 1341.98

Profit before Tax and Extraordinary Items (508.26) (797.21)

Extraordinary Items 0 (12287.23)

Provision for Current Tax 0 0

Deferred Tax 288 2880

Profit after Tax (505.38) (13055.65)

PARTICULARS CONSOLIDATED

2014-15 2013-14

Income from Operations 10976.73 10470.97

Other Income 3116 24.93

Total Revenue 11007.89 10495.90

Profit before Interest and Depreciation 3350.85 2960.14

Interest 2546.32 2391.40

Depreciation 1409.49 1502.78

Profit before Tax and Extraordinary Items (604.95) (934.59)

Extraordinary Items 0 (12287.23)

Provision for Current Tax 0 25.94

Deferred Tax (3.01) 26.81

Profit after Tax (607.97) (13220.40)

DIVIDEND

The Boarddoesnot recommendanydividendforthe Financial Year 2014-15.

SUBSIDIARIES

The Company has 4 subsidiaries as on 31st March, 2015. There has been no material change in the nature of the business of the subsidiaries.

Cafe D Lake Private Limited:

M/s Cafe D'Lake Private Limited which operates all the restaurants businesses of Minerva Coffee-shop, Blue Fox Bar & Restaurant, Eat Street and Water Front has achieved a turnover of Rs.32.49 Crores for the year ended 31st March, 2015 as against Rs.30.82 Cores for previous year. The Net profit for the year ended 31st March, 2015 is Rs.0.20 Crores as against Rs.0.57Croresinthe previousyear.

New Restaurants under the brand names Minerva & Blue Fox have been launched during the months of April & May 2015 respectively at Madhapur, Hyderabad.

Crustum Products Private Limited:

During the year under review, there is no income from operations. The Net loss for the year ended 31st March, 2015 is Rs.1.22 as against net loss of Rs. 2.21 Crores inthe Previous Year.

Viceroy Chennai Hotels & Resorts Private Limited:

Viceroy Chennai Hotels & Resorts Private Limited has no operations commencedason date.

Minerva Hospitalities Private Limited:

Minerva Hospitalities Private Limited has not commenced operations as on date.

POLICY ON MATERIAL SUBSIDIARIES

Policy for determining material subsidiaries of the Company is available on the website ofthe Company (URL: www.vicerovhotels.com/IR). ASSOCIATE

Viceroy Bangalore Hotels Private Limited

Viceroy Bangalore Hotels Private Limited istheAssociateCompany of "Viceroy Hotels Limited".

Status of'Bangalore Hotel Project'

Asfarasthe Bangalore Hotel Project "Renaissance" is concerned, it is ajoint venture betweenJ. P Morgan having 60% stake and Viceroy Hotels Ltd. having 40% stake. Viceroy Bangalore Hotels Private Limited is formed for taking up the Bangalore Hotel Project under the joint venture arrangement. The project work is almost at nearing stage as all the civil works are completed and interiors of rooms and public areas and the mechanical works/ installation of P&M is are almost at the finishing stage.The hotel is situated in a very prime location in Bangalore i.e. opposite to Race Course. It is a big project with 23 floors and has 277 guest rooms, a three-meal restaurant, bar lounge multi function banquet halls, large function lawn and a large multi-cuisine restaurant on the top most floor of the hotel witha breath taking view of the city.

FINANCIAL INFORMATION ABOUT SUBSIDIARIES AND ASSOCIATE COMPANIES

Pursuant to First Proviso to Sub-section (3) of Section 129 of the Companies Act, 2013 read with Rule 5 of The Companies (Accounts Rules) 2014, a statement containing summary of Financial information of Subsidiaries and Associate Companies is provided in "Form AOC-I" as Annexure-I to this report. As per the provisions of section 136 of the Companies Act, 2013 the financial statements of the Company, consolidated financial statements along with relevant documents and separate audited accounts in respect of subsidiaries, are available on the website ofthe Company.

DIRECTORS

Pursuant to the provisions of Section 149 ofthe Companies Act, 2013, Mr. K. Narasimha Rao, Mr. A. Poornachandra Rao and Mr. P. Narendra were Re-appointed as Independent Directors at the 49th Annual General Meeting of the Company held on September 26,2014. The terms and conditions of appointment of independent directors are as per Schedule iV ofthe Companies Act, 2013. They have submitted a declaration that each of them meets the criteria of independence as provided in Section 149(6) ofthe Companies Act, 2013 and there has been no change in the circumstances which may affect their statusas independent director during the year.

Mr. A. Vijyayavardhan Reddy retired by rotation and being eligible, he was re-appointed by the shareholders in 49th Annual General Meeting held on September 26, 2014. However, he resigned from the office with effect from October 1, 2014.

Mrs. P. Kameswari, has been appointed as an Additional director on March 27, 2015 and shall hold the office up to ensuing Annual General meeting. Your Company is in receipt of notice under section 160 ofthe Companies Act, 2013 for herappointment as Directorofthe Company.

In accordance with Section 152 ofthe Companies Act, 2013, Mr. P Chakradhar Reddy, Directorofthe Company retires by rotation in the ensuing Annual General Meeting to be held on September 29,2015 and being eligible, offered himself for re-appointment.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 134(5) ofthe CompaniesAct, 2013 with respect to Directors' Responsibility Statement, it is hereby confirmed that:

i. In the preparation ofthe annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

ii. Such accounting policies as mentioned in the notes to the financial statements have been selected and applied consistently and judgments and estimates that are reasonable and prudent made so as to give a true and fair view of the state of affairs ofthe Company at the end ofthe financial year 2014-15 and ofthe profit or loss ofthe Company forthat period;

iii. Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv. The annual accounts forthe year 2014-15 have been prepared on a going concern basis.

v. Those proper internal financial controls were in place and that the financial controls were adequate and were operating effectively.

vi. That systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.

MEETINGSOFTHE BOARD OF DIRECTORS DURING THE FINANCIALYEAR

5 (Five) meetings of the board were held during the year. For details of the meetings of the board, please refer to the corporate governance report, which forms part of this report.

BOARDEVALUATION

The Board and the Nomination and Remuneration Committee ("NRC") reviewed the performance of the individual directors on the basis of the criteria such as the contribution of the individual director to the Board and committee meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings etc. In addition, the Chairman was also evaluated on the key aspects of his role.

In a separate meeting of independent Directors, performance of non-independent directors, performance of the board as a whole and performance of the Chairman was evaluated The same was discussed in the board meeting that followed the meeting of the independent Directors, at which the performance of the Board, its committees and individual directors was also discussed.

POLICY ON DIRECTORS' APPOINTMENTAND REMUNERATION AND OTHER DETAILS

The Company's policy on directors' appointment and remuneration and other matters provided in Section 178(3) of the Companies Act, 2013 has been disclosed in the corporate governance report, which forms part of this report.

INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY

The details in respect of internal financial control and their adequacy are included in the Management Discussion & Analysis, which forms part of this report.

AUDIT COMMITTEE

The details pertaining to composition of audit committee are set out in the in the Corporate Governance Report, which forms part of this report.

STATUTORYAUDITORS

Pursuant to the provisions of Section 139(2) of the Companies Act, 2013 and all other applicable provisions and rules made there under, M/s. P.Murali & Co, Chartered Accounts, Hyderabad, has been appointed by the Shareholders of the Company in their 49th Annual General Meeting held on September 26, 2014, for a period of three years (i.e. till the conclusion of 52nd Annual General Meeting) subject to the ratification at every subsequent Annual General Meeting held during the above period. Hence, the shareholders will ratify the appointment of Statutory Auditors till the conclusion of 51st Annual General Meeting.

AUDITOR'S OBSERVATIONS

Point No. vii (a): Company serious pursuing and in the process to clear outstanding TDS/WCT dues.

Point No. ix: Company is making continuous efforts to re-pay the defaulted amounts to the banks through One Time Settlements.

SECRETARIAL AUDIT

Pursuant to the provisions of Section 204(1) of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, M/s. A. N. Sarma & Co, Company Secretaries; Hyderabad, has been appointed as Secretarial Auditors of the Company for the Financial Year 2014-15. The Secretarial Audit Report is annexed as Annexure VII to this report.

INTERNAL AUDITOR

Mr. J. Dashwant Kumar, who is also an employee of the Company is acting as Internal Auditor of the Company.

PARTICULARS OF LOANS, GUARANTEESAND INVESTMENTS

The particulars of loans, guarantees and investments under section 186 of the Companies Act, 2013, have been disclosed in the financial statements.

PUBLIC DEPOSITS

During the year under review, your Company has neither invited nor accepted any deposits from the public and as such, no amount on account of principal or interest on deposits from public was outstanding as on the date of the balance sheet.

PARTICULARS OF EMPLOYEES

The information required under Section 197 of the Companies Act, 2013 read with rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014are given below:

a. The ratio of the remuneration of each director to the median remuneration of the employees of the Company for the financial year:

Particulars of Directors and Key Ratio to Median Remuneration Managerial Persons

Executive Directors

Mr. P. Prabhakar Reddy, Chairman and Managing Director 11.48

Non- Executive Directors

Mr. A. Vijayavardhan Reddy (up to 30-09-2014)* 0.04

Mr. P. Chakradhar Reddy (from 5-08-2014)* 0.08

Mrs. P. Kameswari (from 27-03-2015) Not Applicable

Mr. K. Narasimha Rao 0.15

Mr. P. Narendra 0.08

Mr. Poornachandra Rao 0.15

Key Managerial Persons

Mr. K. Gurava Raju 3.17

Ms. Y K. Priyadarshini 1.86

* Since thisinformation is for part of the year, the same is not comparable.

b. The percentage increase in remuneration of each director, chief financial officer, company secretary in the financial year: Not Applicable

c. Thepercentage increase in the median remunerationofemployeesinthefinancial year: 0.00%

d. The number of permanent employees on the rolls of Company: 59

e. The explanation on the relationship between average increase in remuneration and Company performance: There was no increase in remuneration

f. Comparison of the remuneration of the key managerial personnel againstthe performance of the Company:

(Rupees in Crores)

Aggregate remuneration of key managerial personnel (KMP) in FY 2014-15 0.14

Revenue 77.30

Remuneration of KMPs (as % of revenue) 0.18

Profit before Tax (PBT) (5.08)

Remuneration of KMP (as % of PBT) (2.75)

g. Variations in the market capitalization of the Company, price earnings ratio as at the closing date of the current financial year and previous financial year.

Particulars As on 31st As on 31st Change% March, 2015 March, 2014

Market Capitalization Rs.64,56,19,535 Rs.67,84,83,584 (4.84)

Price Earnings Ratio Not Applicable Not Applicable Not Applicable

* Note: Since EPS is negative, there is no price to earning.

h. Percentage increase or decrease in the market quotations of the Shares of the Company as compared to the rate at which the Company came out with the last public offer in the year: Not applicable as the Company has not made any further public issue.

i. Average percentile increase already made in the salaries of employees other than the managerial personnel in the lastfinancialyearand itscomparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration: Not Applicable as there was no such increase in the salaries of employees other than managerial personnel in the last financial year.

j. The key parameters for any variable component of remuneration availed by the directors: Not applicable

k. The ratio of the remuneration of the highest paid director to that of the employees who are not directors but receive remuneration in excess of the highest paid director during the year: None of employees are in receipt of remuneration in excess of the highest paid director

l. Affirmationthat the remuneration is as per the remuneration policy of the Company:

The Company affirms that the remuneration paid to Directors, Key Managerial Personnel and other employees is as per the remuneration policy of the Company.

EMPLOYEERELATIONS

The relationship with the employees continues to be cordial. The Directors would like to place on record their appreciationofthe services rendered by all the employees of the Company.

ENERGY CONSERVATION, TECHNOLOGYABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134 (3) (m) of the Companies Act, 2013, read with Rule 8 of The Companies (Accounts) Rules, 2014, is provided as/under point Nos. 22 & 32 under notes to Accounts of Balance Sheet and Profit and Loss Account.

SIGNIFICANTAND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

There are no significant material orders passed by the Regulators/Courts which would impact the going concern status of the Companyand itsfutureoperations.

EXTRACT OF ANNUAL RETURN

As provided under Section 92(3) of the Companies Act, 2013, the extract of annual return is given in Annexure VI in the prescribed Form MGT-9, which forms part ofthis report.

LISTING

The Equity Shares of your Company are listed on the BSE Limited and the National Stock Exchange of India Limited. It may be notedthat there are no paymentsoutstanding to the Stock Exchanges by way of Listing Fees etc.

CORPORATEGOVERNANCE

The Company has taken adequate steps to ensure that the conditions of corporate governance as stipulated in clause 49 of the listing agreement of the stock exchange are complied with. As per Clause 49 of the listing agreements entered into with the stock exchanges, corporate governance report with auditors' certificate thereon and management discussion and analysis are attached as Separate Annexure No. IV whichforms part ofthis report.

RISKMANAGEMENT

The Board of the Company has formed a risk management committee to frame, implement and monitor the risk management plan for the Company. The Details about Risk Management Committee and Risk Management Policy are given in the Corporate Governance Report.

FAMILIARISATION PROGRAM TO INDEPENDENT DIRECTORS

Details of the familiarization program of the independent directors are available on the website of the Company (URL: http://www.vicerovhotels.com/I R) VIGIL MECHANISM ANDWHISTLE BLOWER POLICY

The details of Vigil Mechanism and Whistle Blower Policy are available under Corporate Governance Report which forms part of this report.

TRANSACTIONS WITH RELATED PARTIES

The details transactions with related parties falls under the scope of Section 188(1) of the Companies Act, 2013 are provided under Point No. 35 Notes to Financial Statements. However, information on transaction with related parties pursuant to Section 134(3)(h) of the Companies Act, 2013 read with rule 8(2) of the Companies (Accounts) Rules, 2014 are given in AOC -2 as Annexure- II and the same forms part of this report.

POLICYON RELATED PARTY TRANSACTIONS

Policy on dealing with related party transactions is available on the website of the Company (URL: httD://www.viceroyhotels.com/IR)

INSIDERTRADING

Pursuant to SEBI (Prohibition of Insider Trading) Regulations, 2015, the Code of Conduct and Code on Fair Disclosure and these code are available on the website of the company (URL: http://www.viceroyhotels.com/IR)

ACKNOWLEDGEMENTS

Your Directors acknowledge with gratitude and wish to place on record their sincere appreciation for the co-operation received by the Company from various Departments of Central/ State Government, SEBI, Stock Exchanges, RBI, MCA and other Regulatory Bodies for the continued co-operation and support extended during the year. Your Directors also express their sincere thanks to the Shareholders, Customers, Bankers, Suppliers and other Business Associatesfortheir support, co-operation and confidence reposed in the management.

By Order and on behalf of the Board For Viceroy Hotels Limited

Hyderabad August 14,2015

Sd/-

P. Prabhakar Reddy Chairman


Mar 31, 2014

Dear Shareholders,

The Directors are pleased to present the 49th Annual Report and the audited accounts for the financial year ended March 31,2014.

Performance / Financial Results

The financial performance of the Company, for the year ended March 31,2014 is summarized below:

(Rupees in Lakhs)

PARTICULARS STANDALONE CONSOLIDATED 2013-14 2012-2013 2013-14 2012-2013

Income from Operations 7102.50 7218.91 10470.97 10891.73

Other Income 24.27 18.77 24.93 18.91

Total Revenue 7126.77 7237.68 10495.90 10910.64

Profit before Interest and Depreciation 2858.48 3038.15 2960.14 3223.65

Interest 2313.71 2270.06 2391.40 2381.66

Depreciation 1341.98 1331.56 1502.78 1489.99

Profit before Tax and Extraordinary Items (797.21) (563.47) (934.05) (648.01)

Extraordinary Items (12287.23) - (12287.23) -

Provision for Current Tax - - 25.94 30.35

Deferred Tax 28.80 14.94 26.81 14.62

Profit after Tax (13055.65) (578.41) (13220.40) (692.97)

Dividend

The Board does not recommend anydividend forthe financial year.

Directors

Mr. K. Jayabharat Reddy, Directorofthe Company retired by rotation in the 48th Annual General Meeting of the Company held on 27th September, 2013. As Mr. Jayabharath Reddy conveyed his unwillingness to be reappointed as Director, it has been decided by the members in the Annual General meeting, not to fill the vacancy so caused.

In accordance with Section 152 of the Companies Act, 2013, Mr. A. Vijayavardhan Reddy, Director, who retire by rotation and being eligible, offered himself for re-appointment.

Mr. P. Chakradhar Reddy has been appointed as an Additional director on August 5,2014 and shall hold the office up to this Annual General meeting. Your Company is in receipt of notice under section 160 of the Companies Act, 2013 for his appointmentas Directorofthe Company.

Pursuant to notification of Section 149 and other applicable provisions of the Companies Act, 2013 read with Rules thereon, your directors are seeking reappointment of Mr. K. Narasimha Rao, Mr. P. Narendra and Mr. A. Poornachandra Rao as Independent Directors for a period of five years.

Statusof''Bangalore Hotel Project''

As far as the Bangalore Hotel Project "Renaissance" is concerned, it is a joint venture between J. P. Morgan having 60% stake and Viceroy Hotels Ltd. having 40% stake. The new company under the name of Viceroy Bangalore Hotels Private Limited is formed for taking up the Bangalore Hotel Project under the joint venture arrangement. The project work is almost at nearing stage as all the civil works are completed and interiors of rooms and public areas and the mechanical works are almost at the finishing stage. The hotel is situated in a very prime location in Bangalore i.e. opposite Race

Course. It is a big project with 23 floors and has 277 guest rooms, a three-meal restaurant, bar lounge, multi function banquet halls, large function lawn and a large multi-cuisine restaurant on the top most floor of the hotel with a breath taking view ofthecity

Sale of ''Chennai Project Division''

Members are aware that during the year under review, due to sudden changes in the Environmental Rules and Chennai Metropolitan Development Authority Rules of Chennai and finally at the instance of the banks such as SBI etc. who have sanctioned loans for Chennai Hotel Project, the ''Chennai Project Division'' comprising the ''Chennai Hotel Project'' i.e. J.W.Marriott Hotel Project, Chennai and ''Chennai Residential Project'', has been sold to Ceebros Hotels Private Limited fora sale consideration of Rs.480 Crores.

As per the terms of sale, the loan amounts availed from SBI and others had to be closed before 31.03.14. Accordingly, Ceebros Hotels (P) Ltd. had made arrangements through funding from IFCI Ltd., paid the loans to various Banks:

Auditors

Pursuant to the provisions of Section 139(2) of the Companies Act, 2013, on rotation of audit firms and based on the recommendation of the Audit Committee, the Board has recommended the re-appointment of M/s. P. Murali& Co., Chartered Accountants, Hyderabad, as the Statutory Auditors of the Company to hold office from conclusion of this Annual General Meeting, subjectto the ratification of shareholders at every Annual General Meeting. M/s. P. Murali& Co., Chartered Accountants, Hyderabad, have confirmed that the appointment, if made, would be within the prescribed limits under Section 141 of the Companies Act, 2013.

Auditor''sObservations

Point No. IX(a) of Annexure to Auditor ''s Report

The Company is generally regular in depositing statutory dues including PF, ESI, Service Tax with the appropriate authorities and at the end of the financial year there were no amounts outstanding which were due for more than 6 months from the date they became payable. However in Respect of TDS & WCTan amount of Rs. 2,21,54,450/-is outstanding which were due for more than 6 months fromthe date they became payable (i.e Year-wise 2011-12 is Rs.1,13,21,895/-, 2012-13 is Rs.85,94,111/- and 2013-14 is Rs.8,79,138/- and year 2011-12 WCT is Rs. 13,59,306/-).

Point No. XI of Annexure to Auditor''s Report

According to information and explanations given to us, the company has defaulted in repayment of dues amounting to Rs. 101.58 Crores towards principal and Rs. 90.55 crores towards interest to financial Institutions and Banks.

Reply to the Auditor''s Observations:

With regard to Auditor''s Observations for Point Nos. IX (a) and XI of the Annexure to Auditor''s Report:

Point No. IX (a): The Company seriously pursuing the matterto clear outstanding TDS/WCT dues.

Point No. XI: The Company is putting serious efforts to re-pay defaulted amounts to the financial institutions and banks through One Time Settlement (OTS).

Directors'' Responsibility Statement

Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956, with respect to Directors'' Responsibility Statement, it is hereby confirmed that:

(i) in the preparation of the annual accounts forthe year ended March 31,2014, the applicable accounting standards read with requirements set out under Schedule VI to the Companies Act, 1956, have been followed and there are no material departures from the same;

(ii) the 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 as at March 31,2014 and of the profit of the Company forthe year ended on that date;

(iii) the Directors have 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 otherirregularities; and

(iv) the annual accounts of the Company for the year ended March 31,2014 has been prepared on a ''going concern'' basis.

Particulars of Employees

No employee was in receipt of remuneration exceeding the limits prescribed under Section 217(2A) of the Companies Act, 1956 and the rules framed there under, as amended to date.

Information required 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

Your Company''s effort towards conservation of energy, which results in savings in consumption of electricity, a significant component of the energy cost, is an ongoing process. The Company continues to absorb and upgrade modern technologies and advanced hotel management techniques in various guest contact areas, which include wireless internet connectivityin the hotels.

As required under Section 217(1) (e) of the Companies Act, 1956, read with rule 2 of the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, the information relating to foreign exchange earnings and outgo is in item nos. 32,33 & 34 of Notes to Accounts of the Balance Sheetand Profit and Loss Account.

Compliance with Notification No. S.0.301(E) dated 8th February, 2011 issued by the Ministry of Corporate Affairs under Section 211(3) oftheCompanies Act, 1956.

Since Central Government had issued a notification No. S.0.301 (E) dated 8th February, 2011 in exercise of the powers conferred by Section 211 (3) of the Companies Act, 1956 granting general exemption to some specified class of companies, including hotel companies, from disclosing certain information in their profit and loss account as required under Part-II of Schedule VI of the Companies Act, 1956 subject to fulfillment of few conditions, your Company has duly complied with all conditions of the notification to seek general exemption under Section 211 (4) of the Companies Act, 1956, paras 3(i)(a) and 3(ii)(d) of Part II of Schedule VI of the Companies Act, 1956 dealing with the disclosure of quantitative details of turnover of each class of goods, opening and closing stock, purchases, production and consumption of raw material in the financial statements for the financial year ended 31st March, 2014. Your Board has passed necessary resolution at its meeting held on August 5, 2014 to comply with the conditions of the notification for thesame.

Public Deposits

During the year under review, your Company has neither invited nor accepted any deposits fromthe public.

Listing

The Equity Shares of your Company are listed on BSE Limited and the National Stock Exchange of India Limited. It may be noted that there are no payments outstanding to the Stock Exchanges by way of Listing Fees, etc.

Corporate Governance

The Company has taken adequate steps to ensure that the conditions of corporate governance as stipulated in clause 49 of the listing agreement of the stock exchange are complied with. A separate statement on corporate governance together with the auditor''s certificate of its compliance forms part ofthisannual report.

Management Discussion & Analysis

Management discussion and analysis of the financial condition and results of operations of the Company for the period under review as required under Clause 49 of the Listing Agreement with the Stock Exchanges, is given in a separate statement in the Annual Report.

Employee Relations

The relationship with the employees continues to be cordial. The Directors would like to place on record their appreciation of the services rendered by all the employees ofthe Company.

Subsidiaries

Viceroy Chennai Hotels & Resorts Private Limited:

Viceroy Chennai Hotels & Resorts Private Limited has no operations commenced as on date.

Minerva Hospitalities Private Limited:

Minerva Hospitalities Private Limited has no operations during theyear.

Cafe D Lake Private Limited:

M/s Cafe D''Lake Private Limited which operates all the restaurants businesses of Minerva Coffee-shop, Blue Fox Bar & Restaurant, Eat Street and Water Front has achieved a turnover of Rs.30.82 Crores for the year ended March 31,2014 as against Rs.31.44Crores for the previous year. The Net profit for the year ended March 31, 2013 is Rs.0.57 Crores as against Rs.0.60 Crores in the previous year.

Crustum Products Private Limited:

M/s Crustum Products Private Limited is the Master Franchisee of Breadtalk Singapore. During the year the Company is running outletsatMumbai, Gurgoan, Bangaloreand Hyderabad.

During the year under review, the Company achieved a turnover of Rs.2.86 Crores as against Rs.5.28 Crores for the previous year. The Net loss for the year ended March 31,2014 is Rs. 2.21 Crores as against net loss of Rs.1.42 Crores in thePreviousYear.

In terms of section 212 of the Companies Act, 1956, your Company is required to attach the directors report, balance sheets, profit and loss account of its subsidiary companies to its Annual Report. However, the Ministry of Corporate Affairs (MCA), Government of India, New Delhi vide its Circular No.2/2011, dated: 08-02-2011 has granted a general exemption to all the Companies for not attaching the above documents of subsidiaries with the Annual Report of the Holding Company, subjectto compliance of the conditions specified therein.

As required under the said general circular, the Board of Directors of your Company at its meeting held on August 5, 2014, has given its specific consent for not attaching the balance sheets of its subsidiaries, as they would be made available to its members at the Company''s website.

In terms of the said notification of the MCA, a summary of the financial information of each of the subsidiaries of your Company is provided as Annexure "A" to this report. Any member intends to have a certified copy of the Balance Sheet and other financial statements of these subsidiaries may write to the Company. Accordingly, this annual report does not contain the reports and other statements of the subsidiary companies. These documents will also be available for inspection during the business hours at the registered office of the company and also at the registered offices of the respective subsidiary companies.

Acknowledgments

Your Directors acknowledge with gratitude and wish to place on record their sincere thanks and appreciation for the co- operation received by the Company from various Departments of Central/ State Government, Financial Institutions and Banks for their continued co-operation and the support extended during the year. Your Directors also wish to acknowledge the continued support and confidence reposed in the management by the Shareholders.

By Order and on behalf of the Board

Hyderabad August 5,2014 Sd/-

P. Prabhakar Reddy Chairman


Mar 31, 2013

Dear Shareholders,

The Directors are pleased to present the 48th Annual Report and the audited accounts for the financial year ended March 31, 2013.

Performance / Financial Results

The financial performance of the Company, for the year ended March 31, 2013 is summarized below:

(Rupees in Lakhs) PARTICULARS STANDALONE CONSOLIDATED 2012-2013 2011-2012 2012-2013 2011-2012

Income from Operations 7218.91 7380.45 10891.73 11034.66

Other Income 18.77 14.93 18.91 15.04

Total Revenue 7237.68 7395.38 10910.64 11049.70

Profit before Interest and Depreciation 3038.15 3265.02 3223.65 3712.36

Interest 2270.06 2196.64 2381.66 2313.71

Depreciation 1331.56 1312.38 1489.99 1467.73

Profit / Loss before Tax (563.47) (244.01) (648.01) (69.09)

Provision for Current Tax 13.78 30.35 70.39

Deferred Tax 14.94 71.50 14.62 81.15

Profit / Loss after Tax (578.41) (329.29) (692.97) (220.63)

Dividend:

The Board does not recommend any dividend for the financial year.

Directors:

During the year under review, Mr. Rakesh Jhunjhunwala, Director of the Company expressed his concern that he was unable to attend all the Board Meetings due to time constraints. He felt that being on the Board of a Company and not in a position to attend all the Board Meetings is not in interest of Good Corporate Governance. Hence, Mr. Rakesh Jhunjhunwala tendered his resignation as director of the Company with effect from October 15,2012.

Mr. K. Jayabharat Reddy and Mr. R. Subramanian, Directors of the Company retire by rotation at the ensuing Annual General Meeting.

Mr. R. Subramanian due to personal reason did not offer himself for re-appointment. The Board expressed its gratitude toMr.R. Subramanian for his association with the Company.

However, Mr. K. Jayabharat Reddy, Director of the Company retire by rotation and being eligible, offered himself for reappointment and brief particulars of him is given in the Annexure to the Notice of this Annual General Meeting. The Board recommends his re-appointment as Director of the Company.

Status of ''Bangalore Hotel Project'':

As far as the Bangalore Hotel Project "Renaissance" is concerned, it is a joint venture between J.P.Morgan having 60% stake and Viceroy Hotels Ltd. having 40% stake. The new Company underthe name of Viceroy Bangalore Hotels Private Limited is formed for taking up the Bangalore Hotel Project under the joint venture arrangement. The project work is almost at nearing stage as all the civil works are completed and interiors of rooms and public areas and the mechanical works are almost at the finishing stage. The hotel is situated in a very prime location in Bangalore i.e. opposite Race Course. It is a tall structure with 23 floors and has 277 guest rooms, a three-meal restaurant, bar lounge and a large multi-cuisine restaurant on the top most floor of the hotel with a breath taking view of the city. It has also multi function banquet halls with varied sizes and has also a large function lawn. As per the progress at the site, the project is likely to be completed by January, 2014.

Saleof''Chennai Project Division'' :

Members are aware that during the year under review, the ''Chennai Project Division'' comprising the ''Chennai Hotel Project'' i.e. J.W.Marriott Hotel Project, Chennai and ''Chennai Residential Project'', has been sold to Ceebros Hotels Private Limited for a sale consideration of Rs.480 Crores. The Agreement of Sale is registered with Sub-Registrar Office, Mylapore, Chennai. The necessary permissions for selling the J.W.Marriott Hotel Project at Chennai was obtained from our Company''s General Body through postal ballot dt.17.06.2013 The same has been informed to the Stock Exchanges. As per the Agreement and arrangement with the banks, the transaction has to be closed by the end of September, 2013. Viceroy Hotels Ltd. is in the process of getting NOCs from the participating banks viz. State Bank of India, State Bank of Mysore, State Bank of Bikaner & Jaipur, Indian Overseas Bank, Allahabad Bank and UCO Bank. The sale transaction will be concluded by the end of September, 2013.

Auditors :

M/s. P. Murali & Co., Chartered Accountants, Hyderabad, the present auditors of the Company, retires at the ensuing Annual General Meeting and is eligible for re-appointment as Statutory Auditors. The Company has received letter from them to the effect that their re-appointment, if made, would be within the prescribed limits under Section 224(1B) of the Companies Act, 1956 and that they are not disqualified for reappointment within the meaning of Section 226 of the said Act. The Audit Committee of the Board has recommended their re-appointment and the Board of Directors commends the Resolution for their re-appointment.

ExplanationtoObservations in the Auditors'' Report :

With respect to the audit observation in point no. XI of the Annexure to Auditors'' Report for the standalone financial statements for the financial year, the Board has noted the observation and hereby inform the members that Viceroy Hotels Ltd. had defaulted in the repayment of loans and also paying interest amounts to the banks. This is due to the fact that for a quite some time, Viceroy Hotels Ltd. was planning to exit from the Chennai Hotel property. The loans pertaining toChennai Hotel Project could not be repaid and interests could not beserviced due to the fact that the project is not completed and repayment of the loans have started as per the original schedule. Now that, the Chennai Hotel property is sold with the cooperation of the banks, all the Chennai Project loans are going to be repaid. Once repayment is done through the sale proceeds of Chennai Hotel Project, there will not be any loan defaults to any bank by Viceroy Hotels Ltd.

Directors'' Responsibility Statement :

Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956, with respect to Directors'' Responsibility Statement, it is hereby confirmed that:

(i) in the preparation of the annual accounts for the year ended March 31, 2013, the applicable accounting standards read with requirements set out under Schedule VI to the Companies Act, 1956, have been followed and there arenomaterial departures from the same;

(ii) the 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 CompanyasatMarch 31, 2013 and of the profitofthe Company for the year ended onthat date;

(iii) the Directors have 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) the Directors have prepared the annual accounts of the Companyona ''going concern'' basis.

Particulars of Employees :

No employee was in receipt of remuneration exceeding the limits prescribed under Section 217(2A) of the Companies Act, 1956 and the rules framed there under,asamended to date.

Information required under Section 217 (1) (e) of the Companies Act 1956 read with the Companies (Disclosure of Particulars in the report of BoardofDirectors) Rules, 1988 :

Your Company''s effort towards conservation of energy, which results in savings in consumption of electricity, a significant component of the energy cost, is an ongoing process. The Company continues to absorb and upgrade modern technologies and advanced hotel management techniques in various guest contact areas, which include wireless internet connectivity in the hotels.

As required under Section 217(1) (e) of the Companies Act, 1956, read with rule 2 of the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, the information relating to foreign exchange earnings and outgoisinitem nos 32, 33 & 34 of Notes to Accounts of the Balance Sheet and Profit and Loss Account.

Compliance with Notification No. S.O. 301(E) dated 8th February, 2011 issued by the Ministry of Corporate Affairs underSection 211(3)oftheCompanies Act,1956:

Since Central Government had issued a notification No. S.O. 301 (E) dated 8th February, 2011 in exercise of the powers conferred by Section 211 (3) of the Companies Act, 1956 granting general exemption to some specified class of companies, including hotel companies, from disclosing certain information in their profit and loss account as required under Part-II of Schedule VI of the Companies Act, 1956 subject to fulfilment of few conditions, your Company has duly complied with all conditions of the notification to seek general exemption under Section 211 (4) of the Companies Act, 1956, paras 3(i)(a) and 3(ii)(d) of Part II of Schedule VI of the Companies Act, 1956 dealing with the disclosure of quantitative details of turnover of each class of goods, opening and closing stock, purchases, production and consumption of raw material in the financial statements for the financial year ended 31st March, 2013. Your Board has passed necessary resolution at its meeting held on August 12, 2013 to comply with the conditions of the notification for the same.

Public Deposits :

During the year under review, your Company has neither invited nor accepted any deposits from the public.

Listing :

The Equity Shares of your Company are listed on BSE Limited and the National Stock Exchange of India Limited. It may be noted that there are no payments outstanding to the Stock Exchangesbyway of Listing Fees, etc.

CorporateGovernance:

The Company has taken adequate steps to ensure that the conditions of corporate governance as stipulated in clause 49 of the listing agreement of the stock exchange are complied with. A separate statement on corporate governance together with the auditor''s certificateofits compliance forms part of this annual report.

ManagementDiscussion&Analysis:

Management discussion and analysis of the financial condition and results of operations of the Company for the period under review as required under Clause 49 of the Listing Agreement with the Stock Exchanges, is given in a separate statementinthe Annual Report.

EmployeeRelations:

The relationship with the employees continues to be cordial. The Directors would like to place on record their appreciation of the services rendered by all the employeesofthe Company.

Subsidiaries :

Viceroy Chennai Hotels & Resorts Private Limited :

Viceroy Chennai Hotels & Resorts Private Limited has no operations commencedasondate.

Minerva Hospitalities Private Limited :

Minerva Hospitalities Private Limited hasnooperations during the year.

CaféDLake Private Limited :

M/s Café D''Lake Private Limited which operates all the restaurants businesses of Minerva Coffee-shop, Blue Fox Bar & Restaurant, Eat Street and Water Front has achieved a turnover ofRs. 31.44 Crores for the year ended March 31, 2013 as against Rs.30.59 Crores for the previous year. The Net profit for the year ended March 31, 2013 is Rs.0.60 Crores as against Rs.1.06 Croresinthe previous year.

Crustum Products Private Limited :

M/s Crustum Products Private Limited is the Master FranchiseeofBreadtalk Singapore. The Companyisrunning out lets at In Orbit Mall, Malad, Mumbai, BG House, Hiranandani, Powai, Mumbai, Gurgoan, New Delhi, Spencer''s Mall, Bangalore QMart- Hyderabad.

During the year under review, the Company achieved a turnover of Rs.5.29 Crores as against Rs.5.95 Crores for the previous year. The Net loss for the year ended March 31, 2013 is Rs. 1.74 Croresasagainst net profit of Rs.0.02 Crores in the Previous Year.

In terms of section 212 of the Companies Act, 1956, your Company is required to attach the directors report, balance sheets, profit and loss account of its subsidiary companies to its Annual Report. However, the Ministry of Corporate Affairs (MCA), Government of India, New Delhi vide its Circular No.2/2011, dated: 08-02-2011 has granted a general exemption to all the Companies for not attaching the above documents of subsidiaries with the Annual Report of the Holding Company, subjecttocompliance of the conditions specified therein.

As required under the said general circular, the Board of Directors of your Company at its meeting held on August 12, 2013 has given its specific consent for not attaching the balance sheets of its subsidiaries, as they would be made availabletoits members at the Company''s website.

In terms of the said notification of the MCA, a summary of the financial information of each of the subsidiaries of your Company is provided as Annexure "A" to this report. Any member intends to have a certified copy of the Balance Sheet and other financial statements of these subsidiaries may write to the Company. Accordingly, this annual report does not contain the reports and other statements of the subsidiary companies. These documents will also be available for inspection during the business hours at the registered office of the Company and also at the registered offices of the respective subsidiary companies.

Acknowledgements:

Your Directors acknowledge with gratitude and wish to place on record their sincere thanks and appreciation for the co- operation received by the Company from various Departments of Central/ State Government, Financial Institutions and Banks for their continued co-operation and the support extended during the year. Your Directors also wish to acknowledge the continued support and confidence reposed in the management by the Shareholders.

By Order and on behalf of the Board

Hyderabad August 12,2013 Sd/-

P. Prabhakar Reddy

Chairman


Mar 31, 2010

The Directors have pleasure in presenting the Forty Fifth Annual Report together with the Audited Accounts of the Company for the year ended 31st March 2010.

PERFORMANCE / FINANCIAL RESULTS OF THE COMPANY

PARTICULARS 2009-10 2008-09

Income from Operations 6424.30 6995.13

Profit before interest, depreciation and tax 2915.00 4013.69

Interest 1755.02 1460.83

Depreciation 1148.87 1078.77

Provision for Tax & FBT & Deferred Tax 148.02 94.25

Profit after Tax (136.90) 347.59

Balance Carried to Balance Sheet 1648.19 1785.10



PROJECTS UNDER IMPLEMENTATION:

Chennai Project:

The Board is pleased to inform you that the Chennai JW Marriott hotel project is in advanced stage of construction. The company is constructing 387 room 5- star deluxe hotel. The Hotel would be operational during the current financial year. The company has signed the Management Contract with M/s.Marriott International Inc, USA for the "JW Marriott" brand.

Bangalore Project:

The Board is pleased to inform you that the Bangalore Renaissance hotel project is in advanced stage of construction. The company is constructing 277 room 5- star deluxe hotel. The Hotel would be operational during the current financial year. The company has signed the Management Contract with M/s.Marriott International Inc, USA for the "Renaissance" brand.

Hyderabad Courtyard Project:

The Board is pleased to inform you that the business hotel under brand name "Courtyard by Marritot" in Hyderabad is complete and handed over to Marriott team for operations of the hotel. The hotel began operations during the financial year under review.

SUBSIDIARY COMPANY PERFORMANCE:

Cafe D Lake Private Limited:

M/s Cafe DLake Private Limited which operates all the restaurants businesses of Minerva Coffee-shop, Blue Fox Bar & Restaurant, Eat Street and Water Front has achieved a turnover of Rs.2800.05 lakhs for the year ended 31st March 2010 as against Rs.3007.16 lakhs for the previous year. The Net profit for the year ended 31st March 2010 is Rs.282.17 lakhs as against Rs.285.46 lakhs.

Crustum Products Private Limited:

M/s Crustum Products Private Limited is the Master Franchisee of Breadtalk Singapore. The company is operating out lets at In orbit mall, Malad, Mumbai, BG House, Hiranandani, Powai, Mumbai, Gurgoan, New Delhi, Spencers Mall, Bangalore, Q Mart - Hyderbad.

During the year under review, the company achieved a turn over of Rs.529.87 lakhs as against Rs.796.06 lakhs for the previous year. The profitability margins are very thin due to higher rentals and power costs across the outlets and the company is negotiating with the landlords to reduce the rentals and also working out the revenue sharing mechanism so, that the fixed cost would be minimal for the company during lean months.

Minerva Hospitalities Private Limited:

M/s Minerva Hospitalities Private Limited has no operations during the year.

DIVIDEND:

The Board does not recommend any dividend during the year under review.

DIRECTORS:

Mr.KJayabharat Reddy and Mr. R.Subramanian retire by rotation and being eligible offered themselves for re-appointment.

AUDITORS:

M/s. P.MURALI & CO., Chartered Accountants, Auditors of the company retires at the ensuing Annual General Meeting. The Company received a letter from them expressing their willingness to be re-appointed as statutory auditors. The company has received a certificate from the Auditors to the effect that their appointment, if made will be in accordance with the provisions of Section 224(lB) of the Companies Act, 1956. Hence the Board recommends their appointment as statutory auditors for the FY2010-11.

AUDIT REPORT:

Regarding the Auditors observations and comments in their report for the financial year 2009-10, they are self-explanatory and the company is making efforts /steps to comply the same.

PARTICULARS OF EMPLOYEES:

The particulars of employees as required under Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 forms part of this Report. However, as per the provisions of Section 219(l)(b) of the Companies Act 1956, the Report and Accounts that are being circulated to shareholders do not include the Statement of Particulars of Employees under section 217(2A) of the Act. Any shareholder interested in obtaining a copy of the above statement can write to the Company Secretary at the Registered Office of the company.

Information required under Section 217(l)(e) of the Companies Act 1956 read with the Companies (Disclosure of Particulars in the report of Board of Directors) Rules, 1988.

a) Conservation of Energy:

Proper Control points are set up at all levels to identify the wastage in Power & Fuel consumption and to take/initiate corrective steps.

b) Research and Development and Technology Absorption:

i) Our Research & Development cell has been making continuous efforts to ensure the best quality standards.

ii) No technology either indigenous or Foreign is involved.

c) Foreign Exchange Earnings and Outgo:

During the year under review your Company has earned Foreign Exchange to the extent of Rs. 19.46 crores (Previous year Rs. 25.21 crores) through Traveller Cheques, Currencies, Credit Cards etc. The corresponding Foreign Exchange outgo during the year was Rs. 4.87 crores (Previous year 4.40 crores) resulting in a net foreign exchange earned for the year is Rs. 14.59 crores and Rs. 20.81 crores for the previous year.

DEPOSITS:

During the year under review, the company has accepted deposits from the Directors/ promoters group in terms of the sanction terms of the secured loans.

COMPLIANCE OF LISTING AGREEMENT:

Presently the companys Equity shares are listed at Bombay Stock Exchange (BSE) and National Stock Exchange Limited (NSE) and the company paid the Annual Listing Fees for the year 2010-11. There are no listing fees dues pending.

CORPORATE GOVERNANCE:

The company has taken adequate steps to ensure that the conditions of corporate governance as stipulated in clause 49 of the listing agreement of the stock exchange are complied with. A separate statement on corporate governance together with the auditors certificate of its compliance forms part of this annual report.

MANAGEMENT DISCUSSION AND ANALYSIS:

The Management Discussion and Analysis for the year ended 31st March 2010 is published separately in this Annual Report.

EMPLOYEE RELATIONS:

The relationship with the employees continues to be cordial. The Directors would like to place on record their appreciation of the services rendered by all the employees of the Company.

DIRECTORS RESPONSIBILITY STATEMENT, PURSUANT TO SECTION 217 (2AA) OF THE COMPANIES ACT:

In the preparation of the Annual Accounts, the Generally Accepted Accounting Principles have been followed. All the Accounting Standards as applicable to the Company have been followed. The Directors have selected 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 Loss of the Company for the period. Proper and sufficient care to maintain adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safe guarding the assets of the Company and for preventing and detecting fraud and other irregularities. The Directors have prepared the Annual Accounts on a Going Concern Basis.

DEPOSITORY SYSTEM:

The trading in the equity shares of the company are under compulsory dematerialization mode. As of date, shares representing 92.65% are in dematerialized form. As the depository system offers numerous advantages, the members are requested to take advantage of the same and avail of the facility of dematerialization of the companys shares.

ACKNOWLEDGMENTS:

Yours Directors acknowledge with gratitude and wish to place on record their sincere thanks and appreciation for the co-operation received by the company from various Departments of Central/ State Government, Financial Institutions and Banks for their continued co-operation and the support extended during the year. Your Directors also wish to acknowledge the continued support and confidence reposed in the management by the Shareholders.

For Viceroy Hotels Limited

P. PRABHAKAR REDDY

Chairman & Managing Director

Place: Hyderabad

Date: 26-08-2010



 
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