The Directors hereby present the thirty first Annual Report of the
Company together with its Audited Statement of Accounts for the year
ended 31st March, 2012.
1. Financial Results
The Company''s performance during the year under review is summarized
(Rupees in Lakhs)
Financial Year Financial Year
Revenue from Operations and Other 58,766.13 49,100.13
Operating and other Expenses 55,248.68 33,415.18
Interest 32,125.06 5,608.31
Depreciation 10,223.53 6,295.92
Profit from discontinuing
operations & 41,766.36 1,854.12
disposal of assets relating to
Profit before Tax 2,935.22 5,634.84
Provision for Taxes / Deferred Tax 1,072.05 5.634.84
Profit after Tax for the year 1,863.17 3,783.85
Balance brought forward 32,588.18 31,280.44
Amount available for Appropriation 34,451.35 35,064.29
Dividend on Equity shares - 581.74
Tax on proposed Dividend - 94.37
Transfer to General Reserve - -
Transfer to Debenture Redemption 1,800.00 1,800.00
Balance carried to Balance Sheet 32,651.35 32,588.18
EPS Basic (in Rs.) 0.48 0.99
EPS diluted (in Rs.) 0.48 0.93
In the absence of adequate profits and cash flows, the directors do not
recommend any dividend for the financial year ended 31st March, 2012.
During the year under review, the Company has credited Rs.13.7 lakhs,
lying in the unpaid / unclaimed dividend and redemption account of
debentures, to the Investor Education and Protection Fund (IEPF)
pursuant to Section 205C of the Companies Act, 1956 read with the
Investor Education and Protection Fund (Awareness and Protection of
Investors) Rules, 2001.
3. Corporate Debt Restructuring
The Company has applied for restructuring of its debts under the
Corporate Debt Restructuring (CDR) mechanism. Please refer to the
Management Discussions and Analysis for further details.
4. Foreign Currency Convertible Bonds
As on 31st March, 2012, the Company had outstanding US Dollar Foreign
Currency Convertible Bonds of the face value of US$ 41.60 million, due
for redemption on 25th April, 2012. The bonds have been redeemed on
25th May, 2012 along with redemption premium and interest for the
5. Transfer of Kovalam Hotel Undertaking
The Company has sold its Kovalam Hotel undertaking for Rs.50,000 Lakhs
by way of a slump sale through a Scheme of Arrangement sanctioned by
the Hon''ble Bombay High Court vide its Order dated 24th February, 2012.
The Company has entered into a long term management contract with the
new owner of the said hotel for managing the hotel under The Leela
brand name. The scheme became effective on 21st March 2012 with 1st
September, 2011 as the Appointed Date.
6. Expansion / Up-gradation Plans
Your Company owns and operates five hotels at New Delhi, Mumbai,
Bangalore, Goa, and Udaipur, besides operating two hotels at Gurgaon
and Kovalam under Management Contract. The Company expects to start
operations of the hotel under construction in Chennai during the
current financial year. During the financial year ended 31st March,
2012, the Company added 20 guest rooms at its Goa hotel property,
resulting an increase of total room inventory to 1890 including those
The Company, through its subsidiary / associates, has acquired land in
Agra for a hotel facing the Taj Mahal and in Lake Ashamed, Kerala for
a backwater resort.
The Company had purchased about 4.21 acres of land in Pune and 3.85
acres of land in Hyderabad for building hotels in these locations.
Since then, considerable capacity addition has taken place in these
cities. Therefore, the Company has decided to use the land in Pune for
high end residential use and has entered into joint development
agreement with a reputed builder in Pune. In Hyderabad, the Company is
planning an outright sale of land. The Company also has about 2 acres
of land next to The Leela Palace, Bangalore and the Company has entered
into a joint development agreement with a reputed builder for
developing high-end Serviced Residences.
7. Management Discussion and Analysis (MDA)
As required by Clause 49 of the Listing Agreements with the Stock
Exchanges, Management Discussion and Analysis Report is appended
herewith and forms an integral part of this report.
8. Corporate Governance
As required by Clause 49 of the Listing Agreements, a separate section
containing the Report on Corporate Governance together with the
Certificate on the compliance with the conditions of corporate
governance issued by a Practicing Company Secretary are appended hereto
and they form part of this Annual Report.
As part of good Corporate Governance, the Company has voluntarily
obtained Secretarial Compliance Certificate from a Practising Company
Secretary in respect of compliance of all rules and regulations under
the various applicable provisions of the Companies Act, 1956 and the
applicable regulations under the Listing Agreement entered into with
the Stock Exchanges. A copy of the said certificate is appended
elsewhere in this report.
9. Changes in Directorate
Mr. P. C. D. Nambiar passed away on 27th May, 2012. The Board wish to
place on record the valuable contribution made by Mr. Nambiar to the
Company and to the deliberations of the Board and its Committees. The
Board has decided not to fill the vacancy caused by his death for the
time being. Pursuant to the provisions of Section 260 of the Companies
Act, 1956, the Board of Directors at their meeting held on 21st
December, 2011 appointed Mr. M. Madhavan Nambiar as an additional
Director and Mr. Pawan Kumar Nagpal as a nominee director of Airports
Authority of India. Mr. Nambiar and Mr. Nagpal hold office up to the
date of the forthcoming Annual General Meeting. The Company has
received notices in writing under Section 257 of the Companies Act,
1956 proposing their candidature for the office of director. A brief
resume of the said directors is given in the explanatory statement. The
Board commends their appointments by the members at the forthcoming
Annual General Meeting.
In accordance with the provisions of the Companies Act, 1956 and the
Articles of association of the Company, Mr. C. K. Kutty, Mr. R.
Venkatachalam, Mrs. Madhu Nair and Mr. Anil Harish retire by rotation
at the forthcoming Annual General Meeting.
Mr. C. K. Kutty and Mr. R. Venkatachalam, who retire by rotation, have
conveyed that they are not seeking re-appointment at the ensuing Annual
General Meeting. The Board has decided not to fill these vacancies. The
Board wish to place on record their appreciation of the valuable
contribution made by them.
Mrs. Madhu Nair and Mr. Anil Harish, retiring by rotation at the
forthcoming Annual General Meeting and being eligible, offer themselves
None of the directors of the Company are disqualified from being
appointed / re-appointed as directors as specified in section 274(1)(g)
of the Companies Act, 1956, as amended.
M/s. Picardo & Co., Chartered Accountants, Statutory Auditors of the
Company, retire at the ensuing Annual General Meeting. They have
confirmed their eligibility and willingness for re-appointment. The
Company has received a certificate from the Statutory auditors to the
effect that their re-appointment, if made, would be within the limits
prescribed under section 224(1B) of the Companies Act, 1956.
The Board commends their re-appointment as statutory auditors.
11. Particulars of Employees
As required by the provisions of Section 217(2A) of the Companies Act,
1956, read with Companies (Particulars of Employees) Rules, 1975, as
amended, the names and other particulars of the employees are set out
in the Annexure to the Directors'' Report.
12. Subsidiary Companies and Consolidated Financial Statements
The Company has not attached Balance Sheet, Profit and Loss Account and
other documents of its two subsidiary companies with the Annual Report
of the Company in terms of general exemption notified by the Ministry
of Corporate Affairs, Government of India vide General Circular
No.2/2011 dated 8th February, 2011 regarding compliance with Section
212(8) of the Companies Act, 1956.
The Company will make available these documents upon request by any
member of the Company interested in obtaining the same. Further, these
documents will also be available at the Registered Office of the
Company for inspection by any member of the Company. As required under
the aforesaid circular, a summarized statement of financial position of
the subsidiaries has been appended to this Annual Report.
The Consolidated Accounts, prepared in accordance with the Accounting
Standard 21 and Clause 32 of the Listing Agreement form part of this
13. Fixed Deposits
The Company has not accepted any deposits from the Public or from the
14. Directors'' Responsibility Statement
Pursuant to the provisions of Section 217(2AA) of the Companies Act,
1956, the Directors hereby confirm that:
(a) in the preparation of the annual accounts, the applicable
accounting standards have been followed and there are no material
departures from the same;
(b) the Directors had selected such accounting policies and applied
them consistently and made judgments and estimates that are reasonable
and prudent so as to give a true and fair view of the state of affairs
of the Company as on 31st March, 2012 and of the profit of the Company
for the year;
(c) they have taken proper and sufficient care for the maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 1956 for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities; and
(d) they have prepared the annual accounts on a going concern
15. Additional information in accordance with the provisions of
(e) of The Companies Act, 1956 read with the Companies (Disclosure of
Particulars in the Report of the Board of Directors) Rules, 1988
(a) Conservation of Energy and Water:
Energy Conservation, sustainability and efforts to make the properties
more Green have been the main drive for the Leela Group
throughout the year. Major steps have been taken towards this. Some of
the efforts are:
- LED Lamps, CFL and energy saving lights have been used across all
- Rain Water Harvesting has been implemented at Mumbai, Delhi and
Kovalam hotels. The Leela Palace, Chennai will collect water on a major
scale from rain water harvesting.
- Sewage Treatment Plants in all properties are being used
extensively to treat and recycle all sewage and grey water for reuse
within the property.
- Extensive retrofitting is being done on HVAC plants in all
properties to reduce power consumption, in addition to installation of
VFD and variable pumping system, resulting in savings in power
- Computerized Power Monitoring is being implemented in all
properties on a gradual basis to monitor and control power consumption.
- Old equipments are being replaced with more efficient ones to
reduce power consumption and improve efficiency.
- Main chiller and steam boilers have been tuned for best efficiency
to conserve energy.
- Hotels are equipped with building management system to monitor and
control energy wastage of engineering equipments.
- Power distribution systems are equipped with power factor
correction panels and automatic voltage regulators.
- Delhi hotel is equipped with solar geysers for generating hot water
and the rooms are equipped with energy saving devices during
- Wind Mills continue to produce Renewable Energy for use in two of
(b) Technology Absorption:
In the opinion of the Board, the required particulars, pertaining to
technology absorption in terms of Rule 2 of the Companies (Disclosure
of Particulars in the Report of Board of Directors) Rules, 1988 are not
applicable, as the hotel is service industry and the Company does not
have any significant manufacturing operations.
(c) Foreign Exchange Earnings and Outgo:
The foreign exchange earnings of the Company during the year stood at
Rs. 19,436 lakhs (previous year Rs. 17,388 lakhs) and foreign exchange
outgo during the year stood at Rs. 4,658 lakhs (previous year Rs. 3,034
The Board wishes to place on record its appreciation for the assistance
and support received from the lenders, Government authorities,
customers and vendors.
Your directors take this opportunity to express their sincere thanks to
all the investors, shareholders and stakeholders for the faith and
confidence they have reposed in the Company and the management.
Your directors attribute immense importance to the contribution of the
family of staff and sincerely thank the Leela Team for sharing the
Company''s vision and philosophy and for the dedication and commitment
in ensuring that we remain in the forefront of our competitive industry
as one of the finest Hotel Groups in India.
For and on behalf of the Board of Directors
Capt. C. P. Krishnan Nair
Mumbai, 29th May, 2012