MIRA
INFORM REPORT
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Report Date : |
11.04.2007 |
IDENTIFICATION
DETAILS
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Name : |
EIH LIMITED |
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Formerly Known As : |
EAST INDIA HOTELS LIMITED |
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Registered Office : |
4, Mangoe Lane, Kolkata 700
001, West Bengal |
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Country : |
India |
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Financials (as on) : |
31.03.2006 |
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Date of Incorporation : |
26.05.1949 |
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Com. Reg. No.: |
17981 |
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CIN No.: [Company
Identification No.] |
L55101WB1949PLC017981 |
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TAN No.: [Tax
Deduction & Collection Account No.] |
CALT00271F / DELE02819F |
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PAN No.: [Permanent
Account No.] |
AAACE6898B |
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Legal Form : |
Public Limited Liability Company. The company’s shares are listed on the
Stock Exchanges. |
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Line of Business : |
The company is engaged in hotel business. |
RATING &
COMMENTS
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MIRA’s Rating : |
Aa |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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71-85 |
Aa |
Possesses adequate working capital. No caution needed for credit transaction.
It has above average (strong) capability for payment of interest and
principal sums |
Large |
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Maximum Credit Limit : |
USD 41000000 |
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Status : |
Good |
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Payment Behaviour : |
Regular |
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Litigation : |
Clear |
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Comments : |
Subject is a well
established and reputed company having excellent track. The company is
progressing well. Directors are reported as experienced and respectable
businessmen. Trade relations are reported as fair. Business is active.
Payments are usually correct and as per commitments. Fundamentals are
strong and healthy. The company can
be considered normal for business dealings at usual trade terms and
conditions. The company can be regarded as a promising business partner in a medium to long-run. |
LOCATIONS
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Registered Office / Head Office : |
4, Mangoe Lane, Kolkata 700
001, West Bengal, India |
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Tel. No.: |
91-33-2248 6751 / 55 |
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Fax No.: |
91-33-2248 6785 |
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E-Mail : |
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Website : |
DIRECTORS
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Name : |
Mr. P. R. S. Oberoi |
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Designation : |
Chairman & Chief Executive |
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Name : |
Mr. S. S. Mukherji |
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Designation : |
Vice Chairman & Managing Director |
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Name : |
Mr. Vikram Oberoi |
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Designation : |
Deputy Managing Director (Operations) |
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Name : |
Mr. Arjun Oberoi |
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Designation : |
Deputy Managing Director (Development) |
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Name : |
Mr. S. K. Dasgupta |
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Designation : |
Director |
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Name : |
Mr. Anil Nehru |
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Designation : |
Director |
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Name : |
Mr. Rajan Raheja |
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Designation : |
Director |
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Name : |
Mr. Christopher Reeves |
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Designation : |
Director |
KEY EXECUTIVES
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Name : |
Mr. G. Ganguli |
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Designation : |
Company Secretary |
SHAREHOLDING
PATTERN
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Names of Shareholders |
No. of Shares |
Percentage of
Holding |
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Promoter Holding |
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Promoters |
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Indian Promoters |
24260000 |
46.30 % |
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Non-Promoter
Holding |
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Institutional Investors |
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Mutual Funds |
1650000 |
3.16 % |
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Banks, Financial Institutions, Insurance Companies (Central/State
Govt. Institutions/ Non-Government Institutions)5.48 |
6820000 |
13.01 % |
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FIIs |
2870000 |
5.48 % |
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Others |
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Private Corporate Bodies |
9020000 |
17.22 % |
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Indian Public |
7590000 |
14.48 % |
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NRIs/OCBs |
100000 |
0.19 % |
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Other than above |
80000 |
0.16 % |
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Total |
52390000 |
100.00 % |
BUSINESS DETAILS
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Line of Business : |
The company is engaged in hotel business. |
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Products : |
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GENERAL
INFORMATION
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No. of Employees : |
6794 |
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Bankers : |
Ø United
Bank of India Ø The Hongkong
and Shanghai Banking Corporation Limited Ø State
Bank of India Ø Housing
Development Finance Corporation Limited Ø UTI Bank Limited Ø CITI Bank |
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Facilities : |
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Banking
Relations : |
Satisfactory |
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Auditors : |
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Name : |
Ray & Ray Chartered Accountants |
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Address : |
6, Church Lane, Kolkata 700 001, West Bengal, India |
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Associates and Joint Venture : |
Ø Indus Hotels
Corporation Limited Ø Mercury Car
Rentals Limited Ø EIH Associated
Hotels Limited Ø Nandi Hills
Hotels and Resorts Limited Ø Balamurie Island
Resort Private Limited Ø Oberoi Hotels
Private Limited Ø Oberoi
Properties Private Limited Ø Oberoi Holdings Private
Limited Ø Oberoi
Investments Private Limited Ø Oberoi Buildings
and Investments Private Limited Ø Oberoi Plaza
Private Limited Ø Bombay Plaza
Private Limited Ø Oberoi Leasing
& Finance Company Private Limited Ø Aravali Polymers
Private Limited Ø CCA Leisure Services
Private Limited |
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Subsidiaries : |
Ø Mercury Travels
Limited Ø Mashobra Resort
Limited Ø Rajgarh Palace
Hotel and Resorts Limited Ø Oberoi Kerala
Hotels and Resorts Limited Ø Mumtaz Hotels
Limited Ø EIH
International Limited |
CAPITAL STRUCTURE
Authorised Capital :
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No. of Shares |
Type |
Value |
Amount |
|
100,000,000 |
Equity Shares |
Rs.
10/- each |
Rs.
1,000.000 millions |
|
20,000,000 |
Cumulative Redeemable
Preference Shares |
Rs.
100/- each |
Rs.
2,000.000 millions |
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Total
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Rs. 3,000.000 millions |
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Issued, Subscribed & Paid-up Capital :
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No. of Shares |
Type |
Value |
Amount |
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52,393,863 |
Equity Shares |
Rs.
10/- each |
Rs.
523.939 millions |
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FINANCIAL DATA
[all figures are in Rupees Millions]
ABRIDGED BALANCE
SHEET
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SOURCES OF FUNDS |
31.03.2006 |
31.03.2005 |
31.03.2004 |
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SHAREHOLDERS FUNDS |
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1] Share Capital |
523.939 |
523.939 |
1223.900 |
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2] Share Application Money |
0.000 |
0.000 |
0.000 |
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3] Reserves & Surplus |
9928.699 |
8668.182 |
8645.100 |
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4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
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NETWORTH |
10452.638 |
9192.121 |
9869.000 |
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LOAN FUNDS |
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1] Secured Loans |
6113.940 |
6399.712 |
4842.100 |
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2] Unsecured Loans |
1003.647 |
1691.663 |
2574.600 |
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TOTAL BORROWING |
7117.587 |
8091.375 |
7416.700 |
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DEFERRED TAX LIABILITIES |
1144.180 |
1266.177 |
17.900 |
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TOTAL |
18714.405 |
18549.673 |
17303.600 |
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APPLICATION OF FUNDS |
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FIXED ASSETS [Net Block] |
11247.734 |
11336.536 |
11330.100 |
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Capital work-in-progress |
2404.480 |
2103.394 |
2068.900 |
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INVESTMENT |
3043.681 |
3204.659 |
3398.500 |
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DEFERREX TAX ASSETS |
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CURRENT ASSETS, LOANS & ADVANCES |
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Inventories |
433.023
|
372.254 |
315.500 |
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Sundry Debtors |
854.461
|
635.990 |
477.400 |
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Cash & Bank Balances |
663.810
|
470.645 |
443.600 |
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Other Current Assets |
4.305
|
4.115 |
0.000 |
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Loans & Advances |
2754.553
|
1963.039 |
1818.100 |
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Total
Current Assets |
4710.152
|
3446.043 |
3054.600 |
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Less : CURRENT
LIABILITIES & PROVISIONS |
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Current Liabilities |
1403.203
|
1202.579 |
2365.300 |
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Provisions |
1437.934
|
551.722 |
460.400 |
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Total
Current Liabilities |
2841.137
|
1754.301 |
2825.700 |
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Net Current Assets |
1869.015
|
1691.742 |
228.900 |
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MISCELLANEOUS EXPENSES |
149.495 |
213.342 |
277.200 |
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TOTAL |
18714.405 |
18549.673 |
17303.600 |
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PROFIT & LOSS
ACCOUNT
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PARTICULARS |
31.03.2006 |
31.03.2005 |
31.03.2004 |
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Guest Accommodation, Restaurants, Bars & Banquets, Etc. |
7563.938 |
5872.315 |
4450.300 |
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Other Income |
468.006 |
380.156 |
594.600 |
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Total Income |
8031.944 |
6252.471 |
5044.900 |
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Profit/(Loss) Before Tax |
2609.462 |
587.296 |
414.700 |
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Provision for Taxation |
721.414 |
256.095 |
133.000 |
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Profit/(Loss) After Tax |
1888.049 |
331.201 |
281.700 |
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Earnings in Foreign Currency : |
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On Sales (as reported by the Company to the Department of Tourism,
Government of India) |
4453.609 |
3394.590 |
NA |
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Other Earnings |
40.406 |
36.251 |
NA |
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Total Earnings |
4494.015 |
3430.841 |
NA |
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Imports : |
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Raw Materials |
4.557 |
1.054 |
NA |
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Stores & Spares |
20.694 |
16.914 |
NA |
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Capital Goods |
196.802 |
105.307 |
NA |
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Others |
70.561 |
52.161 |
NA |
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Total Imports |
292.614 |
175.436 |
NA |
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Expenditures : |
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Consumption Of
Provisions, Stores, Wines & Smokes |
673.138 |
526.878 |
463.100 |
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Power & Fuel |
0.000 |
0.000 |
556.900 |
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Employees'
Remuneration & Welfare Expenses |
1618.586 |
1430.840 |
1187.000 |
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Upkeep &
Service Cost |
1092.530 |
1025.836 |
0.000 |
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Administrative,
Selling And Other Expenses |
1724.360 |
1431.222 |
1686.600 |
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Interest And
Finance Charges |
867.606 |
737.325 |
347.600 |
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Depreciation |
408.835 |
403.890 |
389.000 |
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Total Expenditure |
6385.055 |
5555.991 |
4630.200 |
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QUARTERLY RESULTS
|
PARTICULARS |
30.06.2006 |
30.09.2006 |
31.12.2006 |
|
Type |
1st
Qtr |
2nd
Qtr |
3rd
Qtr |
|
Sales
Turnover |
1923.200 |
1922.400 |
2624.900 |
|
Other
Income |
110.300 |
302.200 |
156.600 |
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Total
Income |
2033.500 |
2224.600 |
2781.500 |
|
Total
Expenditure |
1404.900 |
1578.400 |
1572.700 |
|
Operating
Profit |
628.600 |
646.200 |
1208.800 |
|
Interest |
141.000 |
152.600 |
160.200 |
|
Gross
Profit |
487.600 |
493.600 |
1048.600 |
|
Depreciation |
107.000 |
102.400 |
102.800 |
|
Tax |
137.400 |
128.900 |
324.900 |
|
Reported
PAT |
246.800 |
274.600 |
620.100 |
Notes
200606
Quarter 1 –
EPS is Basic and Diluted Status of Investor Complaints for the
quarter ended June 30, 2006 Complaints Pending at the beginning of the quarter
Nil Complaints Received during the quarter 01 Complaints disposed off during
the quarter 01 Complaints unresolved at the end of the quarter Nil 1. The
result for the first quarter are not indicative of a full years working due to
the seasonal nature of the Indian hotel industry. 2. Pending approval of the
concerded High Courts under sections 391 and 394 of the Companies Act 1956 the
above result a. do not exclude the result of the two hotels viz. Trident Hilton
Bhubaneshwar and the Oberoi Cecil Shimla which are proposed to be transferred
to EIH Associated Hotels Limited with effect from April 01, 2006 and b. Do not
include the results of Raigarh Palace Hotels and Resorts Limited a wholly owned
subsidiary which is proposed to be amalgamated with the Company with effect
from April 01, 2005. The necessary approvals from the shareholders have been
obtained. 3. Figures have been regrouped / rearranged, wherever necessary. 4.
The above unaudited Financial Results were taken on record by the Board of
Directors at its meeting held on July 28, 2006. The statutory auditors have
carried out a Limited Review of the above financial result.
200609
Quarter 2 –
Expenditure Includes Consumption of Provisions, Stores,
Wines & Smokes Rs 177.90 million Staff Costs Rs 535.70 million Power &
Fuel Rs 153.90 million Other Expenditure Rs 611.10 million Loss on swap Rs
83.90 million Miscellaneous Expenditure Amortized Rs 15.90 million Tax Includes
Provision for Current Tax Rs 120.50 million Deferred Tax - Assets Rs (12.30)
million Fringe Benefit Tax Rs 8.40 million EPS is Basic and Diluted Status of
Investor Complaints for the quarter ended September 30, 2006 Complaints Pending
at the beginning of the quarter Nil Complaints Received during the quarter 04
Complaints disposed off during the quarter 04 Complaints unresolved at the end
of the quarter Nil 1. The results of the first half year are not indicative of
a full year's working due to the seasonal nature of the Indian hotel industry.
2. The Extraordinary Income of Rs 143.70 million for the Quarter as well as
Half-year ended September 30, 2006 represents profit on sale of land. 3.
Effective September 20, 2006, the face value of each Equity Share of Rs 10 was
sub-divided into five Equity Shares of Rs 2 each and new Equity Shares were
issued by way of Bonus in the ratio of one Equity Share of Rs 2 for every two
Equity Shares of Rs 2 each. This has resulted in an increase in the Paid-up
Share Capital to Rs 785.90 million. The Earnings per Share for the
corresponding quarter and half year ended September 30, 2005 and year ended
March 31, 2006 have, therefore, been re-cast to make them comparable with the
Earnings per Share of the current quarter and the half year. 4. (a) Mercury
Travels Limited ceased to be a subsidiary of the Company effective July 28,
2006. (b) Mercury Car Rentals Limited has become a subsidiary of the Company
effective July 28, 2006. The Company holds 66.67% of the Equity Share Capital
of Mercury Car Rentals Limited 5. Pending approval of the concerned High Courts
under Sections 391 and 394 of the Companies Act, 1956, the above results : (a)
do not exclude the results of the two hotels viz. Trident Hilton, Bhubaneswar
and The Oberoi Cecil, Shimla which are proposed to be transferred to EIH
Associated Hotels Limited with effect from April 01, 2006; and (b) do not
include the results of Rajgarh Palace Hotel and Resorts Limited, a wholly owned
subsidiary, which is proposed to be amalgamated with the Company with effect
from April 01, 2005.The necessary approvals from the Shareholders have been
obtained. 6. Figures for the previous quarter / half year / year have been
regrouped or rearranged, wherever necessary. 7. The above Unaudited Financial
Results were reviewed by the Audit Committee on October 30, 2006 and approved
by the Board of Directors at its Meeting on October 31, 2006.The Statutory
Auditors have carried out a limited review of the Financial Results given above.
200612
Quarter 3 –
Expenditure Includes Consumption of Provisions, Stores,
Wines & Smokes Rs 220.50 million Staff Costs Rs 494.90 million Power &
Fuel Rs 121.90 million Other Expenditure Rs 648.40 million Loss on swap Rs
71.80 million Miscellaneous Expenditure Amortized Rs 15.20 million Tax Includes
Provision for Current Tax Rs 310.40 million Deferred Tax(provision)/ write Back
Rs 0.80 million Fringe Benefit Tax Rs 14.50 million EPS is Basic and Diluted
Status of Investor Complaints for the quarter ended December 31, 2006
Complaints Pending at the beginning of the quarter Nil Complaints Received
during the quarter 01 Complaints disposed off during the quarter 01 Complaints
unresolved at the end of the quarter Nil 1. Effective September 20, 2006, the
face value of each Equity Share of Rs 10 was sub-divided into five Equity
Shares of Rs 2 each and new Equity Shares were issued by way of Bonus in the
ratio of one Equity Share of Rs 2 for every two Equity Shares of Rs 2 each.
This has increased the paid up share capital to Rs 785.90 million. The Earning
Per shares for all previous periods disclosed have been recast to make them
comparable with the earnings per share of the quarter and the nine months ended
December 31, 2006 at face value of Rs 2 per share. 2. The Scheme of Arrangement
for transfer of The Oberoi Cecil, shimla and Trident Hilton Bhubaneswar to EIH
Associated Hotels Limited Sections 391 and 394 of the Companies Act 1956
effective April 01 2006 was sanctioned by the concerned High Courts during the
current quarter Accordingly the results in respect of the quarter and in
respect of the nine months ended December 31, 2006 exclude the results of two
hotels. The surplus arising out of this transfer amounting to Rs 313.30 million
has been considered as an Extra ordinary item from April 2006. 3. Pending
approvals of the concerned High Court under section 391 and 394 of the
Companies Act 1956 the above results do not include the results of Rajgarh
Palace Hotel and Resorts Limited a wholly owned subsidiary which is proposed to
be amalgamated with the Company with effect from April 01, 2005. 4. Figures for
the previous quarter / nine months / year have been regrouped or rearranged
wherever necessary. 5. The above Unaudited Financial Results were reviewed by
the Audit Committee on January 30, 2007 and approved by the Board of Directors
at its Meeting on January 31, 2007. The Statutory Auditors have carried out a
limited review of the Financial Results given above.
KEY RATIOS
|
PARTICULARS |
31.03.2006 |
31.03.2005 |
31.03.2004 |
|
Debt-Equity
Ratio |
1.04 |
1.11 |
0.90 |
|
Long
Term Debt-Equity Ratio |
1.02 |
1.09 |
0.90 |
|
Current
Ratio |
1.12 |
1.07 |
1.07 |
|
TURNOVER
RATIOS |
|
|
|
|
Fixed
Assets |
0.62 |
0.49 |
0.39 |
|
Inventory |
18.79 |
17.08 |
14.11 |
|
Debtors |
10.15 |
10.55 |
10.25 |
|
Interest
Cover Ratio |
2.96 |
1.94 |
2.33 |
|
Operating
Profit Margin(%) |
39.38 |
31.22 |
26.93 |
|
Profit
Before Interest And Tax Margin(%) |
33.98 |
24.34 |
18.19 |
|
Cash
Profit Margin(%) |
22.07 |
13.57 |
15.79 |
|
Adjusted
Net Profit Margin(%) |
16.67 |
6.69 |
7.05 |
|
Return
On Capital Employed(%) |
17.43 |
9.84 |
5.76 |
|
Return
On Net Worth(%) |
17.21 |
5.39 |
3.54 |
STOCK PRICES
|
Face Value |
Rs.10.00/- |
|
High |
Rs.97.00/- |
|
Low |
Rs.94.25/- |
LOCAL AGENCY
FURTHER INFORMATION
HISTORY
EIH, formerly known as East India Hotels, was incorporated
in 1949 and promoted by Oberoi and Oberoi Hotels (India). EIH is part of the Oberoi
Group which operates both, luxury hotels and medium-priced high quality hotels.
EIH has an old and well established presence in India. EIH operates hotels
under the brand name Oberoi and Trident. EIH has a substantial presence in
metropolitan centres, which are more profitable locations.
The subsidiaries of EIH are Mercury Travels Limited, EIH International Limited,
Mashobra Resort Limited, Mumtaz Hotels Limited, Rajgarh Palace Hotel and
Resorts Limited & Oberoi Kerala Hotels and Resorts Limited
The company opened the first luxury resort hotel in the Himalayas, in Shimla
April 1997 which has been well received by the guests. The company also opened
an international luxury resort, The Oberoi Lombok, located in Indonesia in
January 1997. The hotel has a unique situation on a pristine private beach on
the island of Lombok.
A 500-room `Trident Hotel' at the Bandra-Kurla complex in Mumbai was set up at
cost of Rs 400 crore. Work has also commenced on the 175-room Trident Hotel at
Pune. The company will also manage the deluxe Oberoi Hotel under construction
at Chennai, which will have a capacity of 325 rooms. Yet another hotel at Agra
with a room capacity of 104 is also being set up. Land had also been acquired
in the backwaters of Kerala to set up a property jointly with the Kerala
Tourism Development Corporation. The company has launched Motor Vessel Vrinda,
a luxury Cruiser in the backwaters of Kerala on 1st November 2003. The three
new projects set up during the year are Rajvilas, a deluxe Oberoi Hotel in
Jaipur, which has been well received by international tourists, the Trident
Jaipur and the Trident Udaipur, which has helped consolidate the Group's
presence in Rajasthan.
The Oberoi, Bangalore, introduced 30 new Deluxe rooms at an investment of Rs 15
crore. The funding was arranged internally. The deluxe rooms covering 400
square feet each have Burma teak flooring and modern communications facilities
like facsimile machines. Each room has a laser-disk player with access to an
in-house collection of discs.
In the first-ever investment move by India in China, the Oberoi group is
planning to set up a luxury hotel in that country. Despite the political
face-off between the two nations, negotiations are on at present with Chinese
authorities for setting up a deluxe property with around 400 rooms in Beijing.
Since virtually all land in China is owned by the government, talks are on with
a public sector company, which holds a suitable piece of land, for entering
into a joint venture with the Oberois.
The company is setting up three hotels in Morocco for a total investment of
$102 mn (Rs 474 crore). The hotels are being set up in a joint venture with a
conglomerate in Morocco, ONA Group of Industries. The group currently has 12 hotel
properties overseas, spread across Australia, Indonesia, Mauritius, Egypt, Sri
Lanka and Middle-East.
During 2000-2001, the company opened two hotels in India, Amarvilas in Agra and
the Wildflower Hall, Mashobra in the Himalayas.
The company has signed a Strategic Alliance Agreement with Hilton International
to co-brand its Trident hotels in India during March 2004. The Oberoi Towers,
Mumbai has been re-branded Hilton Towers and the Trident Hotels in Jaipur,
Udaipur, Agra, Chennai, Cochin, Bhubaneswar and Gurugaon have been re-branded
Trident Hilton, with effect from 1st April 2004. Further all the 'Vilas' hotels
were re-branded as The Oberoi Rajvilas, The Oberoi Amarvilas, The Oberoi
Udaivilas etc with effect from 1st October 2003.
During 2004-05 the company has opened two new restaurants at The Oberoi, New
Delhi. They are the threesixty, an all day dining restaurant and Travertino- an
Italian fine dining restaurant. Also the company has opened a new restaurant-
'Tiffin' at The Oberoi, Mumbai and 'The Polo Club' at The Oberoi, Bangalore.
bUSINESS
The company is managed by Oberoi Group of companies.
The company has operating contracts for the following hotels
which are owned by Indus Hotels Corporation Limited (IHCL):
·
The Trident, Agra (Opened 1993)
·
The Trident, Jaipur (Opened 1997)
·
The Trident, Udaipur (Opened 1998)
·
The Trident, Cochin (Opened 1998)
Business during the year under report had been
disappointing. Several events have had an adverse effect on the travel and
tourism industry. Recession in the spring and summer of 2001 followed by
terrorist attacks on the World Trade Centre and the Pentagon on 11th
September, 2001 and the attack on the Indian Parliament in December 2001, have
severely impacted travel to India. As there has been a drop in revenue due to
adverse conditions, the company has curtailed costs, wherever possible.
The total revenue dropped by 18% and the profit before tax
was 53% lower than that of the previous year. The net profit after tax was
lower by 62% compared to last year.
During the year under report, the company redeemed the first
instalment of 16% non-convertible debentures amounting to Rs. 37.473 millions
and the final instalment of 15% partly convertible debentures amounting to Rs.
88.660 millions.
The investors services division of the company has received
the ISO 9002 Certificate from British Standards Institution (BSI) in
recognition of the excellent quality of services provided to the company's
investors.
During the year under report, the foreign exchange earnings
of the company were Rs. 2542.652 millions as compared to Rs. 3320.350 millions
in the previous year. The company has
been accorded the "International Star Service Export House" status by
the Director General of Foreign Trade, Ministry of Commerce and Industry,
Government of India.
The Oberoi, Chennai hotel is opening in the year 2003.
The Oberoi, Jaisalmer, Rajgarh (Madhya Pradesh), Marrakech
(Morocco) hotels are under planning.
Vanyavilas, an Oberoi Resort at Ranthambhore, opened during the
year, Udaivilas, which is also on Oberoi Resort at Udaipur opened on 15th
August, 2002. The trident Hotel located at Bandra-Kurla, Mumbai, is under
construction and progress is satisfactory.
The company is in trade terms with :
Ø New
Broadway Cleaners
Ø Akash
Cleaners
Ø Obeetee
Private Limited
Ø Parag
Copigraph Private Limited
Ø Bindal
Paper Mart
Ø Radhakrishna
Food Land Limited
Ø Aap Ki
Pasand
Ø Gorsia
Architectural Design Private Limited
The company fixed assets of important value include freehold
land, leasehold land, buildings, sanitary installation, plant & machinery,
computer, furniture & fittings, vehicles and aircraft.
Major recognitions
received by the Oberoi Hotels & Resorts during the Financial Year are as
follows:-
|
HOTEL |
AWARD |
AWARDED BY |
|
The Oberoi, New Delhi |
Best Business Hotel in New Delhi |
Asiamoney, Business Travel Poll 2006 |
|
The Oberoi, New Delhi |
Best Business Hotel in Mumbai Best Hotels in Asia, Australia and Pacific Nations (Ranked 3rd for Location) |
Asiamoney, Business Travel Poll 2006 Conde Nast Traveler, USA, Gold List 2006 |
|
The Oberoi Rajvilas, Jaipur |
Top 10 Hotels in the world for overall value (Ranked 1st): Delivering the best experience at the right price Best Hotels in the World for Service: Among those with a score of 100 Best Hotels in the World for Rooms: Among those with a score of 100 Top 50 Small Resorts, Inns and Lodges (Ranked 2nd) Top 100 in the World (Ranked 7th) Best Hotels in the World (Ranked 3rd) |
Travel + Leisure, Readers' Poll World's Best Values 2006 Conde Nast Traveler, USA, Gold List 2006 Conde Nast Traveler, USA, Gold List 2006 Zagat Survey, Top International Hotels, Resorts and Spas 2005 Conde Nast Traveler, USA, Readers' Travel Awards 2005 Travel + Leisure, World's Best Awards Readers' Survey 2005 |
|
Wildflower Hall, Shimla |
India's Best Spa Resort |
World Travel Awards 2005 |
|
The Oberoi Udaivilas, Udaipur |
Best Hotel in the World for service |
Conde Nast Traveller, UK, Gold List 2006 |
|
The Oberoi Amarvilas, Agra |
Best Five Star Deluxe Hotel in India Top 20 Resorts in the World |
Ministry of Tourism, Government of India, National Tourism Award,
2004-2005 Zagat Survey, Top International Hotels, Resorts and Spas |
|
The Oberoi Vanyavilas, Ranthambhore |
Most preferred Leisure Hotel in Asia (Ranked 9th) |
Conde Nast Traveller, UK, 8th Annual Readers Travel Awards, 2000 |
Locations of the Various Hotels and Other Business Units
A. Hotels owned and
managed by EIH Limited
The Oberoi, Mumbai The
Oberoi Udaivilas, Udaipur
The Oberoi, New Delhi The
Oberoi Vanyavilas, Ranthambhore
The Oberoi, Bangalore Hilton
Towers, Mumbai
The Oberoi Grand, Kolkata *
Trident Hilton, Bhubaneswar
* The Oberoi Cecil, Shimla
B. Hotels owned
through Subsidiary/Associate Companies and managed by EIH Limited
The Oberoi Amarvilas, Agra Trident
Hilton, Gurgaon
The Oberoi Rajvilas, Jaipur Trident
Hilton, Chennai
Wildflower Hall, Himalayas Trident
Hilton, Agra
(An Oberoi Resort) Trident
Hilton, Jaipur
The Oberoi, Sahl Hasheesh Trident
Hilton, Udaipur
The Oberoi, Bali Trident
Hilton, Cochin
The Oberoi, Lombok
The Oberoi, Mauritius
C. Other Business
Units owned and managed by EIH Limited
Motor Vessel Vrinda, Cochin Oberoi
Flight Services, Mumbai,
(A Luxury Cruiser) Delhi,
Chennai,
Kolkata and
Bangalore
Maidens Hotel, Delhi
Printing Press, Delhi Oberoi
Airport Services, Mumbai,
Delhi,
Chennai and
Kolkata
Notes:
1. Hotels marked (*) are proposed to be transferred w.e.f. 1st April,
2006 to an Associate Company to be managed by EIH Limited.
2. EIH Limited has strategic/substantial investment in hotels owned by
Subsidiary/ Associate Companies except in the case of Trident Hilton, Gurgaon
where it has no investment.
MANAGEMENT
DISCUSSION AND ANALYSIS
Industry Structure & Developments
Strong growth in the Gross Domestic Product (GDP), increased air connectivity,
positive steps to improve infrastructure and more liberalised foreign
investment policies have contributed to strong demand in most cities. The
Indian hospitality industry is now one of the world's fastest growing.
Promotional efforts by the Government have succeeded in communicating the
'Brand India' message worldwide.
The 2006 Travel and Tourism Economic Research Report on India published by
World Travel and Tourism Council has predicted that travel and tourism in India
will grow by 8.4% in 2006. The contribution of the Industry to India's GDP in
2006 would be 2.1%. It is expected that by end of 2006 the travel and tourism
industry will account for 2.4% of the total employment in the country.
With the entry of several international brands the structure of the industry is
undergoing a change. The emergence of more competition will compel the Indian
hotel groups to improve their product and the service levels. A change will
also be seen in the ownership structure. A new class of first time
entrepreneurs is fast emerging providing more opportunities for international
hotel chains.
The key challenge confronting the industry will be Human Resources. As the
supply of hotel professionals is limited, retention will be important. The
industry will have to attract talent from outside the hospitality
industry.
The Company intends to retain its leadership position.
Segment wise Performance
The Company continues to be largely a single segment entity engaged in the
operation and marketing of accommodation and provision of related
services.
The segment wise results and capital employed are set out on page 84 of the
Annual Report.
Outlook
The outlook for the Financial Year 2006-07 is positive. The demand for hotel
accommodation is growing rapidly. Barring unforeseen circumstances, the
Company's performance is expected to show continued growth.
Financial
and Operational Performance
During the Financial Year under review, the Company's Total Revenue was
Rs.8031.94 million which represents an increase of approximately 28% when
compared to the previous year. The Operating Profit has increased to Rs.2923.33
million which is an increase of 59% over the previous year. The Profit Before
Tax and Extraordinary items is Rs. 1646.89 million which shows an increase of
136% as compared to the previous year.
The Extraordinary Income of Rs. 1046.57 million represents a profit from sale
of land.
Extraordinary Charges for the year were Rs. 84 million. The Profit After Tax increased
to Rs. 1888.05 million from Rs. 331.20 million in the previous year.
The average room rates have shown substantial growth. The Company achieved a
28% increase in Revenue Per Available Room ('REVPAR'). Revenues from Food and
Beverages increased by over 34% as compared to the previous year.
INDUSTRY
Indian Hotels Company Ltd (IHCL) operating under the Taj
brand, is the largest hotel chain in the country. EIH operating under the
Oberoi brand is the second largest hotel chain followed by ITC Hotels (ITCH).
Asian Hotels (AHL), Bharat Hotels (BHL), Oriental Hotels as well as Hotel Leela
Venture (HLV) are other major hotels.
While the 5-star and 5-star deluxe and to some extent the
4-star hotels are the domain of renowned hotel companies, an unorganized market
exists for hotels operating below these ratings. Hotel companies such as EIH
and ITCH as well as international hotel chains are aggressively entering into
the mid-budget hotel segment.
Average room rate (ARR) and occupancy are the two most critical
factors that determine the profitability, since most of the marginal revenue
gets added to the bottom-line. ARR in turn depends upon location, brand image,
star rating, quality of facilities and services offered and the seasonal
factor.
Land comprises 45-50% of the total project cost and is
therefore the single largest cost item in the construction of a hotel in India.
It is estimated that the construction cost for a 300 rooms hotel in Delhi works
out to Rs20mn/room. Since fixed costs constitute 60-65% of the total operating
cost, break even levels are very high.
Demand for hotels in cities like Mumbai and Delhi are the
highest. In fact at present, out of the total of 19,000 5-star and 5-star
deluxe rooms in the country, 50% are accounted for by these two cites. These
cities along with Bangalore and Chennai serve as gateway to important tourist
destinations.
Presently, the total 5 & 4-star room capacity in the
four metro cities is close to 13,000rooms. Mumbai and Delhi account for the
bulk of the total room availability. In Mumbai room availability is expected to
increase by another 3,100 rooms in the next 2-3 years.
Chain hotels like IHCL, EIH and ITCH are better placed than
single locations hotels like BHL, AHL. Though the latter have hotels at strategic
location (Delhi) the risk associated with single location hotel is always
higher.
In the short term the outlook for the industry appears bleak
due to a significant oversupply and weak socio-economic conditions. In the
long-term the hotel industry in India has latent potential for growth. This is
because India is an ideal destination for tourists as its is the only country
with the most diverse topography. At present India attracts approximately 2.5mn
tourists every year which is just 0.4% of the world tourist arrivals. Countries
such as Thailand and Malaysia attract thrice as many tourists.
The hotel industry is at present going through one the
toughest periods. Weak economic conditions have lead to a steep decline in
foreign as well as Indian business arrivals. Tourist arrivals have also seen a
marginal decline due to devaluation of the Asian currencies, which have made
these countries cheaper than India.
Substantial additions to room supply especially in metros
like Mumbai will further put pressure on room rentals. The next 2-3 years is
not expected to provide any succor to hotel industry due to the overall
recession in India and Asia.
This has resulted in most of the five star hotels operate at
very low occupancy rates. They have been forced to offer discounts on the rack
rates. Average room rentals have therefore taken a beating. During
April-December 1998 revenue per room declined by 17.2% in Delhi, 9.7% in Mumbai
and 0.3% in Chennai.
As there was hereto not much competition, the big five hotel
majors were able to unabatedly increase their room tariffs. However, with the
major international hotel chains having evinced interest in setting up hotels,
there is bound to be a price war. India will become a normal market like the
South East Asia with demand and the quality of services offered determining the
room rentals
Another trend, which has been witnessed during the economic
slowdown, has been the increasing demand for medium budget hotels due to the exorbitant
rates charged by 5-star hotels. Quality budget hotels are expected to be the
future of India's hotel industry. Companies in future would like to house their
middle level managers in these budget hotels having reasonably good facilities
rather than the expensive 5-star deluxe hotels.
In this regard the Taj group and the Oberoi (through the
Trident brand) have made a strong foray into smaller cities having a strong
industrial base. Earnings from these hotels are likely to be more stable than
the earnings of 5-star hotels.
In the long-term the hotel industry in India has latent
potential for growth. This is because India is an ideal destination for
tourists as its is the only country with the most diverse topography. At
present India attracts approximately 2.5mn tourists every year which is just
0.4% of the world tourist arrivals. Countries such as Thailand and Malaysia,
attract thrice as many tourists.
Globally, leisure and entertainment are seen to be growing
industries. Hence stable socio-political and economic conditions coupled with
an improvement in infrastructure facilities (roads, airports etc) will
improvement the sentiments of the tourists towards India.
If the above conditions are met tourist arrivals can
increase five-fold from the present levels. In such a situation there will be a
surge in demand for rooms in gateway cities like Mumbai and Delhi as well as in
certain tourist destinations.
CMT REPORT
(Corruption, Money Laundering & Terrorism]
The Public Notice information has been collected from various sources
including but not limited to: The Courts, India Prisons Service,
Interpol, etc.
1] INFORMATION ON
DESIGNATED PARTY
No records exist designating subject or any of its beneficial owners,
controlling shareholders or senior officers as terrorist or terrorist
organization or whom notice had been received that all financial transactions
involving their assets have been blocked or convicted, found guilty or against
whom a judgement or order had been entered in a proceedings for violating
money-laundering, anti-corruption or bribery or international economic or
anti-terrorism sanction laws or whose assets were seized, blocked, frozen or
ordered forfeited for violation of money laundering or international
anti-terrorism laws.
2] Court Declaration :
No records exist to suggest that subject is
or was the subject of any formal or informal allegations, prosecutions or other
official proceeding for making any prohibited payments or other improper
payments to government officials for engaging in prohibited transactions or
with designated parties.
3] Asset Declaration :
No records exist to suggest that the property or assets of the subject
are derived from criminal conduct or a prohibited transaction.
4] Record on Financial
Crime :
Charges or conviction
registered against subject: None
5] Records on Violation of
Anti-Corruption Laws :
Charges or
investigation registered against subject: None
6] Records on Int’l
Anti-Money Laundering Laws/Standards :
Charges or investigation
registered against subject: None
7] Criminal Records
No
available information exist that suggest that subject or any of its principals
have been formally charged or convicted by a competent governmental authority
for any financial crime or under any formal investigation by a competent
government authority for any violation of anti-corruption laws or international
anti-money laundering laws or standard.
8] Affiliation with
Government :
No record
exists to suggest that any director or indirect owners, controlling
shareholders, director, officer or employee of the company is a government
official or a family member or close business associate of a Government
official.
9] Compensation Package :
Our market
survey revealed that the amount of compensation sought by the subject is fair
and reasonable and comparable to compensation paid to others for similar
services.
10] Press Report :
No press reports / filings exists on
the subject.
CORPORATE
GOVERNANCE
MIRA INFORM as part of its Due Diligence do provide comments on
Corporate Governance to identify management and governance. These factors often
have been predictive and in some cases have created vulnerabilities to credit
deterioration.
Our Governance Assessment focuses principally on the interactions
between a company’s management, its Board of Directors, Shareholders and other
financial stakeholders.
CONTRAVENTION
Subject is not known to have contravened any existing local laws,
regulations or policies that prohibit, restrict or otherwise affect the terms
and conditions that could be included in the agreement with the subject.
FOREIGN EXCHANGE
RATES
|
Currency |
Unit
|
Indian Rupees |
|
US Dollar |
1 |
Rs.42.86 |
|
UK Pound |
1 |
Rs.84.75 |
|
Euro |
1 |
Rs.57.71 |
SCORE & RATING
EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
9 |
|
PAID-UP CAPITAL |
1~10 |
7 |
|
OPERATING SCALE |
1~10 |
7 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
9 |
|
--PROFITABILIRY |
1~10 |
6 |
|
--LIQUIDITY |
1~10 |
9 |
|
--LEVERAGE |
1~10 |
9 |
|
--RESERVES |
1~10 |
9 |
|
--CREDIT LINES |
1~10 |
9 |
|
--MARGINS |
-5~5 |
- |
|
DEMERIT POINTS |
|
|
|
--BANK CHARGES |
YES/NO |
YES |
|
--LITIGATION |
YES/NO |
NO |
|
--OTHER ADVERSE INFORMATION |
YES/NO |
NO |
|
MERIT POINTS |
|
|
|
--SOLE DISTRIBUTORSHIP |
YES/NO |
NO |
|
--EXPORT ACTIVITIES |
YES/NO |
YES |
|
--AFFILIATION |
YES/NO |
YES |
|
--LISTED |
YES/NO |
YES |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
74 |
This score serves as a reference to assess SC’s credit risk
and to set the amount of credit to be extended. It is calculated from a
composite of weighted scores obtained from each of the major sections of this
report. The assessed factors and their relative weights (as indicated through
%) are as follows:
Financial
condition (40%) Ownership
background (20%) Payment
record (10%)
Credit history
(10%) Market trend
(10%) Operational
size (10%)
RATING
EXPLANATIONS
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
>86 |
Aaa |
Possesses an extremely sound financial base with the strongest
capability for timely payment of interest and principal sums |
Unlimited |
|
71-85 |
Aa |
Possesses adequate working capital. No caution needed for credit transaction.
It has above average (strong) capability for payment of interest and
principal sums |
Large |
|
56-70 |
A |
Financial & operational base are regarded healthy. General
unfavourable factors will not cause fatal effect. Satisfactory capability for
payment of interest and principal sums |
Fairly Large |
|
41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
|
26-40 |
B |
Unfavourable & favourable factors carry similar weight in credit consideration.
Capability to overcome financial difficulties seems comparatively below
average/normal. |
Small |
|
11-25 |
Ca |
Adverse factors are apparent. Repayment of interest and principal sums
in default or expected to be in default upon maturity |
Limited with
full security |
|
<10 |
C |
Absolute credit risk exists. Caution needed to be exercised |
Credit not
recommended |
|
NR |
In view of the lack of information, we have no basis upon which to
recommend credit dealings |
No Rating |
|