TO THE MEMBERS
OF LEMON TREE HOTELS LIMITED
Your Directors have pleasure in presenting the Twenty Fifth Annual Report of theCompany together with audited statements of accounts for the financial year ended 31stMarch 2017.
FINANCIAL RESULTS AND OPERATIONS
The financial performance on the basis of Standalone Financial Statements for the yearended 31st March 2017 is summarized below:
| || ||(Rupees in Lacs) |
|Particulars ||For the Year Ended 31.03.2017 ||For the Year Ended 31.03.2016 |
|Total Income ||22543.28 ||19462.11 |
|Profit Before Depreciation amortisation & Tax ||2909.92 ||434.67 |
|Less: Depreciation & Amortisation expenses ||2119.95 ||2183.68 |
|*Profit/(Loss) Before Tax ||804.85 ||(1743.45) |
|Less : || || |
|**Current tax(MAT) ||125.30 ||- |
|Adjustment of Tax for earlier periods ||6.95 ||10.91 |
|Less : Provision For Deferred Tax || || |
|*Profit/(Loss) After Tax ||672.60 ||(1754.36) |
|*Profit/(Loss) for the year ||672.60 ||(1754.36) |
*includes comprehensive income
** includes tax on comprehensive income
PERFORMANCE REVIEW AND STATE OF COMPANY AFFAIRS
The revenue from the operations of the Company during the current year was Rs.21842.80 Lacs increased from Rs. 19328.32 Lacs in the previous year.
Lemon Tree Group is among the leading hotel companies in India (by number of roomsunder chain affiliation) in the Mid-priced segment. It is further informed that betweenFY12 and FY17 demand growth for upper midscale and Midscale - Economy segments exceededsupply growth enabling less severe impact on ADR and positive RevPAR. Upper midscalesegment occupancy increased from 55.5% for FY12 to 63.6% for FY17 while absorbing 10800new rooms. For the midscale economy segment occupancy improved from 56% for FY12 to65% for FY17 absorbing about 14500 new rooms during this period. This is an importantindicator of the potential for Mid-priced sector hotels in India in India and we expectthat demand for mid-priced sector hotels will further increase during the course of timeas demand for hotels is also increasing due to various other reason viz. Business relatedtravel on transient and extended stay basis Leisure Weddings and other social purposesDiplomatic travel Airline crew Transit.
During the year under review the Authorised Share Capital of the Company remained atRs. 10000000000/- (Rupees One Thousand Crores only) divided into 998550000 (NinetyNine Crores Eighty Five Lacs Fifty Thousand) equity shares of Face value of Rs. 10/-(Rupees Ten only) each and 145000 (One Lac Forty Five Thousand) 5% Cumulative RedeemablePreference Share of Rs. 100/- (Rupees One Hundred only) per share.
During the year under review the Issued and Paid up Share Capital of the Company wasincreased to Rs. 7812740650/- (Rupees Seventy Hundred Eight One Crore Twenty Seven LacsForty Thousand Six Hundred and Fifty Only) divided into 781274065 (Seventy Eight CroreTwelve Lacs Seventy Four Thousand and Sixty Five) equity shares of face value of Rs. 10/-(Rupees Ten only) per share by issuing further 3171902 equity shares out of which300000 equity shares were issued on preferential basis and 2871902 equity shares havebeen issued on exercise of employee stock options.
BORROWINGS FROM BANKS/ FINANCIAL INSTITUTIONS
The Companys total long term borrowings from banks/ financial institutionsdecreased from Rs. 34107.15 Lacs in the previous year to Rs. 32104.51 Lacs in thecurrent year.
OPERATIONAL HOTELS AND UPCOMING PROJECTS
Lemon Tree Hotels Limited is a Company engaged in hotel business and there has been nochange in the nature of its business during the year under review.
During the financial year under review Lemon Tree Group had thirty six (36) hotelsoperating in 22 cities under its various brands i.e. Lemon Tree PremierLemon Tree Hotels and Red Fox Hotels in the Company and itssubsidiaries including the managed hotel properties.
Out of the total Six (6) hotel properties are being operated under the new upperupscale "Lemon Tree Premier" brand at Bengaluru Gurgaon including Lemon TreePremier HITEC City-Hyderabad and Lemon Tree Premier Delhi Aerocity operating in thesubsidiary companies including addition of one new (1) property namely Lemon TreePremier Leisure Valley 2 Gurgaon under its subsidiary during the financial year underreview.
Lemon Tree Group had Twelve (12) hotels operating under the brand "Lemon TreeHotel" at Ahmedabad Aurangabad Chennai Chandigarh Gurgaon Indore Pune includingthe four hotel properties i.e. Lemon Tree Hotel East Delhi Mall-Kaushambi Lemon TreeHotel Electronics City-Bengaluru Lemon Tree Hotel Whitefield-Bengaluru Lemon TreeHotel Gachi Bowli-Hyderabad in the subsidiary companies including the addition of one (1)more property viz: Lemon Tree Hotel Candolim Goa under its subsidiary.
Three(3) resorts i.e. Lemon Tree Vembanad Lake Resort at Allepey Kerala and Lemon TreeAmarante Beach Resort Goa including Lemon Tree Hotel Wildlife Resort Bandhavgarh arealso operating in the subsidiary companies.
During the financial year under review the number of managed properties has beenincreased from seven (7) to eleven (11) which are being operated under Lemon Tree PremierLemon Tree Hotel & Red Fox Hotel Brand by the management arm of the Lemon Tree Groupi.e. Lemon Tree Premier Jaipur Lemon Tree Premier The Atrium Lemon Tree HotelShimona-Chennai Lemon Tree Hotel-Dehradun Lemon Tree Hotel-Vadodra Lemon TreeHotel-Dahej Lemon Tree Hotel-Tarudhan with an addition of Lemon Tree Hotel Katra RedFox Hotel-Trichy Red Fox Hotel Bhiwadi and Red Fox Hotel Chandigarh which havecommenced their operations during the period under review.
Further four (4) more hotel properties were operating under Red Fox Hotelbrand at Hyderabad and Delhi Aerocity including Red Fox Hotel East Delhi and Red FoxHotel Jaipur operating in subsidiary companies.
Further two new projects i.e Lemon Tree Hotel Sector 60 and Red Fox Hotel Sector 60Gurgaon under its subsidiary Company has been completed and has commenced its operationsduring the current financial Year.
Further several new hotel projects have been taken up by the Group at KolkattaMumbai Udaipur Pune and Shimla which are at various stages of development.
AWARDS AND RECOGNITION
During the year under review the Company has received various awards and recognitionas detailed herein below:
Ranked 4th in the list of Indias Best Companies to Work for adjudged by theEconomic Times and the Great Place to Work Institute India
Ministry of Social Justice and Empowerment Government of India: Best Employer National Award 2011. Award received from the President of India
Recognised by the Economic Times and the Great Place to Work Institute India forbeing among the best in:
(i) the special category of utilizing analytics to drive a great place of place ofwork; (ii) the industry of hotels and resorts; and
(iii) the special category of employer branding.
Overall Winners World Responsible Tourism Award 2016 at WTM London
Gold Winner-'Best Accommodation for Responsible Employment' category 2016WTMLondon
HR Innovation Award for Excellence in Diversity and Inclusion2016
People Matters Total Rewards 2017: 'Best in Building Career' Award
BOARD OF DIRECTORS & KEY MANAGERIAL PERSONNEL (KMPS)
During the financial year under review as on 31st March 2017 there were nine (9)Directors on the Board of the Company. The list of the Directors & KMPs as on31st March 2017 is annexed as Annexure-1 to the Boards report.
During the financial year under review Mr. Rattan Keswani was re-appointed as DeputyManaging Director for a period of 3 years commencing from 1st January 2017 to 31stDecember 2019 which was approved by the members in their Extra-Ordinary General Meetingheld on 19th December 2016.
During the financial year under review the Board of Directors had appointed Mr. NikhilSethi as Group Company Secretary & GM Legal (Key Managerial Personnel) of the Companyw.e.f 12th December 2016.
Further the Board of Directors at their meeting held on 15th June 2017 has appointedMr. Pradeep Gupta Mr. Ashish Guha Mr. Arvind Singhania Mr. Paramartha Saikia asAdditional Directors in the capacity of Non-Executive Independent Director and the Boardof Directors has also appointed Ms. Freyan Desai as Additional Director in the capacity ofNon-executive Women Independent Director and they hold office upto the ensuing GeneralMeeting.
In accordance with the Companies Act 2013 and the Articles of Association of theCompany one (1) of your Directors viz. Mr. Aditya Madhav Keswani retires by rotationand being eligible offers his candidature for re-appointment. Your approval for hisreappointment as Director is being sought in the Notice convening the Annual Generalmeeting of the Company.
During the financial year under review Ms. Suman Singh resigned as AGM and GroupCompany Secretary of the Company with effect from 30th June 2016 to pursue herprofessional interests elsewhere.
DIVIDEND ON EQUITY SHARES
Your Directors do not propose any dividend on the shares of the Company for thefinancial year ended on 31st March 2017.
TRANSFER TO RESERVES
No transfers to reserves were made as no appropriations were required to be madeduring the year.
ADEQUACY OF INTERNAL CONTROLS
The Companys internal control systems are commensurate with the nature of itsbusiness and the size and complexity of its operations. The statutory and the internalauditors routinely conduct system checks and give their report after evaluation of theefficacy and adequacy of internal control systems including controls with respect to thefinancial statements its compliance with operating systems accounting procedures andpolicies in the Company. Based on the report of Internal Audit the departments undertakecorrective action in their respective areas and thereby strengthen the controls. Thesignificant audit observations and follow up actions thereon are reported to the AuditCommittee as well and further corrective action taken as per the inputs received from thecommittee members and the auditors.
DISCLOSURE UNDER THE SEXUAL HARRASHMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013
The Company has in place an Anti Sexual Harassment Policy in line with the requirementsof The Sexual Harassment of Women at the Workplace (Prevention Prohibition and Redressal)Act 2013. During the year under review no compliant was received by the Corporate EthicsCommittee (CEC) formed in this regard.
Your Directors place on record their appreciation for the valuable support andcooperation of the Companys Bankers Government Agencies Customers SuppliersShareholders Employees and other statutory authorities who have reposed their continuedtrust and confidence in the Company.
|DATE : 15.06.2017 ||For & On behalf of the Board of Directors of |
|PLACE: NEW DELHI ||Lemon Tree Hotels Limited |
| ||Sd/- |
| ||Patanjali G. Keswani |
| ||Chairman & Managing Director |