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Om Sindoori Hotels Ltd.

BSE: 507931 Sector: Services
NSE: N.A. ISIN Code: N.A.
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Om Sindoori Hotels Ltd. (OMSINDOORIHOT) - Chairman Speech

Company chairman speech

1996 OM SINDOORI HOTELS LIMITED CHAIRMAN'S REPORT The Board of Directors and I are extremely happy to welcome your all to this 11th AGM of your Company. The financial performance of the two hotels under review has been very eventful, gratifying and creditable this year. THE ECONOMY The recent economic developments, and the proposals presented by the United Front Government reiterates the commitment to economic reform. Core and infrastructure sectors are receiving the special attention that they deserve. The sustained growth in the economy has created an environment conductive to the increased tempo of industry activity. Economic growth of over 7%, Industrial growth of 12% and direct foreign investment inflow of about $10 billion per year are being aimed at. With this Government policy to encourage tourism sector, with a view to receiving 5 million tourists by the turn of this century, there will continue to be tremendous business potential and avenues of growth in the Tourism Sector. THE TOURISM SECTOR As against existing availability of around 55000 rooms in the Hotel Sector, additional 70000 rooms, require to be made available in the next 5 years time inorder to accommodate the surging inflow of Tourists and Business Travellers. Response to the policy initiatives taken by the Government indicates that unless significant improvements are effected in the infrastructure sector, additions to rooms as stated above may not be helpful. For your Company particularly which is planning to setup a chain of budget hotels at various parts of the Country, the future looks promising and rewarding. THE FINANCIAL PERFORMANCE The Company has recorded 70% growth in turnover thanks to the contribution made by the second Hotel property, namely, The Sindoori Central Hotel at Periamet, Madras - 600 003, and profit before Tax increased to Rs. 125.20 lacs. After the provision for Income Tax, the profit available for appropriation was Rs. 142.57 lacs after taking into account the balance profit b/f from the previous year. DIVIDEND In keeping with the good track record of your company the Board of Directors has decided to recommend equity dividend of 22.5% for the year 1995-96. The dividend pay out would be Rs. 28.83 lacs. THE OPERATIONAL PERFORMANCE The Sindoori Hotel : Rooms The has has achieved a turnover of Rs. 605 lakhs in the year 95-96 as compared to Rs. 515 lacs in 94-95 [a growth of 17%] Room Revenue has gone up over last year by 16% mainly on account of increase in Room Tariff. During the first 4 months of the current year the increase in room revenue has registered higher growth when compared to the corresponding period of previous year. FOOD & BEVERAGE F & B Departments have registered a growth of 19% over last year contributed by almost all outlets. During the first 4 months of the Current year, Coffee Shop and Room Services have shown improved results. The Sindoori Central Hotel: The hotel has achieved a turnover Rs. 270 lacs during its maiden financial year of operation i.e. 95-96 out of which rooms division has contributed Rs. 127 lacs and Food & Beverage Rs. 118 lacs. The Room occupancy at 72% in 95-96 is considered to be satisfactory for the new hotel. The two hotels continue to enjoy the uninsted patronage from Corporate Clients, Travel Agents and Walk-in-Guests [both domestic and foreign] RENOVATION Additional guest lift has been erected during the year for the convenience of our valued guest and the existing Beacon lifts are being replaced with new Otis lifts. FINANCE During the year under review, the Company has drawn a fresh term loan of Rs. 120 lacs from ICICI for financing the following items:- a. Lease Deposits paid to the lessors of the Sindoori Central Hotel - Rs. 50 lacs. b. Balancing plant and equipment and misc. fixed assets for Sindoori Central Hotel Rs. 50 lacs and c. Cost of new lifts for the Sindoori Hotel Rs. 20 lacs. The Company's bankers have since renewed the Over Draft limit of Rs. 45 lacs + Rs. 5 lacs Bill Discounting facility valid for one year. Liability on account of acceptance and renewal of Fixed Deposits amounted to Rs. 34.35 lacs [previous year 28.78 lacs] T.Q.M/I.S.O 9000 CERTIFICATION PROGRAMMES: In keeping with the Company's policy of continued thrust on quality and excellence in service, the company has embarked on an intensive awareness programme on Total Quality Management and standards during the year. The will enable us to emerge as a Stronger, Confident, Responsible and a Creative Organisation. VISION: With a strong foundation of ground work in place your company is all equipped to take on the emerging challenges of the future. It is all set to enter an era of growth and prosperity. With this sort of initiative taken by the Company, for maintaining quality standards of hotel services we are appropriately positioned to face successfully the challenges of the coming years and make the most of the oncoming opportunities. ACKNOWLEDGEMENT: I wish to place on record our gratitude to ICICI, IDBI, IFCI, Canara Bank, Citibank, DOT and various other Departments and Agencies of Central and State Governments, Suppliers and valued clients for their continued support. Also to members of this Board, who continue to steer your company with sagacity and purpose. I join with my colleagues to place on record our gratitude to you, the valued shareholders whose support has made this company to grow from strength to strength. I will be failing in my duty if I don't record on behalf of the Board of Directors of your Company our appreciation of the contribution of the Executive and employees towards achievement of results by the Company. Chairman Place : Madras Dated : 25th September, 1996.