ORIENTAL HOTELS LIMITED
Your Company has completed 25 years successfully. The Annual Report for the
year ended 31st March 1995 will amply demonstrate what the Company has
achieved. The Company's operations have grown from a single unit in 1974 to
a multi-limit operation in India and has a commendable record of dividends,
bonus shares and rights share issue. The shareholders' confidence in and
continued support to the Company's management has been an important factor
which has made these achievements possible.
2. Your Company started a programme of major renovation to its properties
in 1990. In my earlier statements, I had cautioned shareholders that the
outlook for the Company's results would, in the short term, need to take
into account the extensive renovation work envisaged, especially to the
Company's flagship hotel at Madras. I am happy to inform shareholders that
the renovation/expansion work at Vizag is fully complete and the renovation
work at Madras hotel, for the large part is complete except for the
function rooms and the Coffee Shop. The renovation work in the main Lobby,
Bar and the Executive floors at Taj Coromandel Hotel, Madras is complete
and the shareholders would be glad to note that the income and
profitability of the hotel has improved considerably compared to the
previous years. Notwithstanding the renovation programme and negative
factors during the past five years such as the Gulf war, sectarian riots
and the "plague scare", your Company has been able to achieve significant
increases in its income, profitability and shareholders have benefitted
from bonus and rights issues and increased dividends on expanded capital.
3. During the year under review, your Company placed Global Depositary
Receipts (GDRs) of US$ 30 Million (Rs. 93.66 crores) at a very attractive
rate of US$ 12.75 per GDR, demonstrating the international investors'
confidence in your Company. With part of the proceeds of the GDR issue,
your Company has acquired, through its wholly owned subsidiary in Hongkong,
an interest in the ownership and operations of the Executive Plaza Hotel,
Chicago, U.S.A., a leading hotel in the city. We believe that this
investment will have significant long-term benefit to the Company.
4. The economic liberalisation during the past few years has increased
business travel into India significantly and an appreciable improvement in
the occupancy of hotels. However, to sustain this growth, the industry
requires a healthy, mix of business and leisure traffic. This calls for an
increase in the country's available room capacity. This in turn requires
the support of the State Governments who can jointly promote tourism in
their respective States by joining hands with known hotel companies and by
making available land for hotel projects and further offer concessional
levy of power charges for utilities, property related taxes and luxury tax.
Simultaneously, we need to improve the infrastructure.
5. With the continued support and guidance received by your Company from
The Indian Hotels Company Limited, your Company is poised to not only
consolidate its present market share but is also planning to expand its
activities in places such as Coimbatore and Tuticorin in the next few
6. Shareholders will join me in expressing our grateful thanks to the
Company's bankers and financial institutions for their continued support.
Lastly and most important our gratitude to the loyalty, dedication and
motivation of your Company's staff at all levels, ably led by the Vice
Chairman and Managing Director, in achieving excellent working results year
Date : 14th August, 1995.