options chain Directors report

OM SINDOORI HOTELS LTD. DIRECTORS REPORT REPORT OF THE DIRECTORS FOR THE FINANCIAL YEAR ENDED 31.03.1999. The Directors have pleasure in presenting the Annual Report of your Company together with the audited statement of accounts for the financial year ended 31st March 1999. HIGHLIGHTS OF PERFORMANCE 1. Your Company has achieved a turnover of Rs. 1184.93 lacs in 98-99. The pre-tax profit is Rs.63.83 lacs Foreign Exchange earnings was Rs.107.00 lacs (Rs. 117.10 lacs) . HOTEL OPERATIONS Sindoori Hotels turnover was Rs.603.34 lacs while Sindoori Central Hotel registered a turnover of Rs.425.21 lacs. For the corresponding period of last year, their respective turnovers were Rs.678.60 lacs and Rs.447.00 lacs. The general decline in overall economic activities consequent on the global recession, affected the hotel industry substantially and your hotel was no exception. However, the improvement perceived in the state of economy of the nation during the current year, as evidenced by controlled inflationary conditions, downtrend in interest rates and other economic factors has given the management the confidence that henceforth, the growth of business will be positive and substantial. THE SINDOORI TRAVELS Sindoori Travels recorded a turnover of Rs.156.36 lacs for the year 1998-99 as against Rs.95.87 lacs achieved in the previous year, registering a growth of 63%. This division has obtained IATA recognition thus conferring the status of a full fledged travel agency on it enabling it to provide more value added services to the Guests. FUTURE PLANS / PROSPECTS [A] OPTIMAL UTILISATION OF EXISTING RESOURCES: A series of steps have been initiated for optimising the utilisation of existing resources and facilities. These include sharpening of the hotels competitive edge, wooing back the former clients/guests, improved service quality, enlarging the clientele base with the help of group companies, more intensive direct and tele-marketing and increasing the volume of tie- ups with corporates, airlines and travel agents. [B] NEW VENTURES: The Company is implementing a plan to put up 40 additional rooms at Central Sindoori to meet anticipated increase in demand. The Company proposes to set up an Ayurvedic Awareness Centre and a Health Club with foreign collaboration to cater to the needs of the entrepreneurial class, providing them with natural remedies, yoga therapy for stress and fatigue relief, a lean cuisine for the health conscious and other facilities. [c] Gateway Of The South: Discussions are on with tour operators and travel agencies for organised tours of South India, focussing on the centres of pilgrimage, famous temples, famed architectural marvels and locations of scenic beauty which abound in South. The traveller will return fully satisfied after the tour and will nostalgically, recall memories of the same for a long time to come. FINANCE 1. ICICI has sanctioned a term loan of Rs.300 lacs to improve the asset base of the Company against which partial withdrawal of Rs.150 lacs has been made. The balance will be drawn to match the further progress in this regard. Liability on account of acceptance and renewal of Fixed Deposits amounted to Rs.33.21 lacs (previous year Rs.38.11 lacs) . 2. Working capital funds are availed through an O.D. limit of Rs.60 lacs from Union Bank of India. DIVIDEND The Directors recommend a dividend of 18% or Rs.1.80 per equity share [previous year 22.5%]. DIRECTORS Mr. B. NATARAJAN and Mr. M.P. NARAYANAN, Directors, retire by rotation and, being eligible, offer themselves for re-election. ENERGY CONSERVATION TECHNOLOGY TRANSFER AND FOREIGN EXCHANGE EARNINGS AND OUTGO: The information required under sec.217 [I] [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 is furnished hereunder:- a] Electricity, High speed diesel, petrol, LPG, coal and solid fuel are purchased at the prevailing market rates. During the occasional power shut down by Electricity Board, our captive generator set has been used. b] Hotel being a service industry, technology absorption, transfer, research and development and the like are not applicable. c] The details on foreign exchange earnings are furnished in Notes on Account [refer item no. 4] STAFF The Directors record their grateful appreciation of the co-operation and efforts of all the members of the staff and executives in the development, growth and prosperity of the company. ISO 9002 CERTIFICATION PROGRAMMES The Company has completed the process of setting up standards for its various activities and expects to get ISO 9002 accreditation in the near future. Y2K COMPLIANCE The Company is taking effective steps so as to be Y2K compliant before 31st December 1999. AUDITORS M/S. R. Subramanian & Co., Chartered Accountants, the present Auditors, retire at the Annual General Meeting and, being eligible, offer themselves for re-appointment. ACKNOWLEDGEMENT Your Directors wish to place on record, their gratitude for the support extended by Financial Institutions,Canara Bank/Union Bank of India, Department of Tourism and various other Departments and Agencies of the Central and State Governments,Suppliers and the valued clients for their continued support and patronage. Your Directors also wish to place on record their gratitude to the valued shareholders of the company whose consistent support has made your company grow from strength to strength. ADDENDUM: With regard to Auditors observation on non-provision for gratuity liability, the Company has the policy of accounting the gratuity as and when the payments are made at the time of resignation/retirement of employees. Steps have been since initiated for eventual compliance with the observations. For and on behalf of the Board of Directors Place: Chennai Date : 15.07.99 Chairman