OM SINDOORI HOTELS LTD.
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) .
Sindoori Hotel's 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
The general decline in overall economic activities consequent on the global
recession, affected the hotel industry substantially and your hotel was no
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
[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
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
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.
The Directors recommend a dividend of 18% or Rs.1.80 per equity share
[previous year 22.5%].
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
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]
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
The Company is taking effective steps so as to be Y2K compliant before 31st
M/S. R. Subramanian & Co., Chartered Accountants, the present Auditors,
retire at the Annual General Meeting and, being eligible, offer themselves
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 Auditor's 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
For and on behalf of the
Board of Directors
Date : 15.07.99 Chairman