Annual Report 2016-2017 - eihltd.com

1 Annual Report 2016 - 2017 VOTED THE WORLD S BEST HOTEL BRAND by the readers of Travel + Leisure, USA in the 2015 and 2016 World s Best AwardsVOTED THE WORLD S LEADING LUXURY HOTEL BRAND from 2012 to 2016 by World Travel AwardsOur endeavour is to create memories for our guest that last a lifetime. We are unrelenting in our quest for perfection in every thing we do from hotel design and d cor to creating an environment for our team that encourages them to provide our guests with warm and intuitive commitment to excellence, attention to detail and personalised service has once again been appreciated and recognised by our guests. In 2016 , Oberoi Hotels & Resorts was recognised as the World s Leading Luxury Hotel Brand at the World Travel Awards, for the fifth consecutive year. Also in 2016 , at the World s Best Awards, readers of Travel + Leisure, USA voted Oberoi Hotels & Resorts the World s Best Hotel Brand for the second consecutive recognition that we continue to receive is a testament to the vision of our founder, Rai Bahadur M.

2 S. Oberoi. Taking his legacy forward, our Executive Chairman, Mr. P. R. S. Oberoi continues to inspire our employees to set global benchmarks in service images in the Annual Report showcase the attention to design detail and traditional and authentic craftsmanship that makes each Oberoi hotel special and THE WORLD S BEST HOTEL BRAND by the readers of Travel + Leisure, USA in the 2015 and 2016 World s Best AwardsVOTED THE WORLD S LEADING LUXURY HOTEL BRAND from 2012 to 2016 by World Travel AwardsOur endeavour is to create memories for our guest that last a lifetime. We are unrelenting in our quest for perfection in every thing we do from hotel design and d cor to creating an environment for our team that encourages them to provide our guests with warm and intuitive commitment to excellence, attention to detail and personalised service has once again been appreciated and recognised by our guests.

3 In 2016 , Oberoi Hotels & Resorts was recognised as the World s Leading Luxury Hotel Brand at the World Travel Awards, for the fifth consecutive year. Also in 2016 , at the World s Best Awards, readers of Travel + Leisure, USA voted Oberoi Hotels & Resorts the World s Best Hotel Brand for the second consecutive recognition that we continue to receive is a testament to the vision of our founder, Rai Bahadur M. S. Oberoi. Taking his legacy forward, our Executive Chairman, Mr. P. R. S. Oberoi continues to inspire our employees to set global benchmarks in service images in the Annual Report showcase the attention to design detail and traditional and authentic craftsmanship that makes each Oberoi hotel special and Board of Directors 8 The Oberoi Dharma 10 The Oberoi Group Mission 11 Highlights 12 Chairman s Review 14 Directors Report 16 Business Responsibility Report 27 Management Discussion and Analysis 57 Report on Corporate Governance 65 Secretarial Audit Report 85 Independent Auditor s Report 89 Balance Sheet 98 Statement of Profit and Loss 99 Cash Flow Statement 100 Statement of Changes in Equity 102 Notes to Accounts 103 Consolidated Financial Statements 14967 The Late Rai Bahadur Oberoi Founder of The Oberoi Group1898-2002 BOARD

4 OF DIRECTORSMr. OberoiExecutive ChairmanMr. MukherjiExecutive Vice ChairmanMr. Vikram OberoiManaging Director and Chief Executive OfficerMr. Arjun OberoiManaging Director- DevelopmentMrs. Nita M. AmbaniDirectorMrs. Renu Sud KarnadIndependent DirectorMr. Manoj Harjivandas ModiDirectorMr. Rajeev GuptaIndependent DirectorMr. DasguptaIndependent DirectorMr. Anil K. NehruIndependent Director Mr. Sudipto SarkarIndependent DirectorMr. L. Ganesh Independent DirectorCOMPANY SECRETARY & COMPLIANCE OFFICERMr. S. N. SridharAUDITORSRay & Ray, Chartered Accountants Webel Bhavan, Ground Floor, Block EP & GP Sector V, Bidhan Nagar, Salt Lake Kolkata-700 091 REGISTERED OFFICE4, Mangoe Lane Kolkata 700 001 Oberoi, Executive ChairmanThe Oberoi DharmaWe, as members of The Oberoi Group are committed to display through our behaviour and actions the following conduct, which applies to all aspects of our business : Conduct which is of the highest ethical standards - intellectual, financial and moral and reflects the highest levels of courtesy and consideration to others.

5 Conduct which builds and maintains team work, with mutual trust as the basis of all working relationships. Conduct which puts the customer first, the Company second and the self last. Conduct which exemplifies care for the customer through anticipation of need, attention to detail, excellence, aesthetics and style and respect for privacy along with warmth and concern. Conduct which demonstrates two-way communication, accepting constructive debate and dissent whilst acting fearlessly with conviction. Conduct which demonstrates that people are our key asset, through respect for every employee, and leading from the front regarding performance achievement as well as individual development. Conduct which at all times safeguards the safety, security, health and environment of guests, employees and the assets of the company. Conduct which eschews the short-term quick-fix for the long-term establishment of healthy Oberoi Group MissionOur GuestsWe are committed to meeting and exceeding the expectations of our guests through our unremitting dedication to every aspect of PeopleWe are committed to the growth, development and welfare of our people upon whom we rely to make this DistinctivenessTogether, we shall continue the Oberoi tradition of pioneering in the hospitality industry, striving for unsurpassed excellence in high-potential locations all the way from the Middle East to the ShareholdersAs a result.

6 We will create extraordinary value for our ** based on the number of Equity Shares subsequent to Rights Issue of Equity Shares on 26th March 2007-2008 2008-2009 2009-2010 2010-2011** 2011-2012** 2012-2013** 2013-2014** 2014-2015** 2015- 2016 ** 2016 - 2017 ** IN RUPEES EPS DIVIDEND PER SHARE 0 2000 4000 6000 8000 10000 12000 14000 16000 2007-2008 2008-2009 2009-2010 2010-2011 2011-2012 2012-2013 2013-2014 2014-2015 2015- 2016 2016 - 2017 RUPEES IN MILLION GROSS REVENUE PROFIT AFTER TAX 0 5000 10000 15000 20000 25000 30000 2007-2008 2008-2009 2009-2010 2010-2011 2011-2012 2012-2013 2013-2014 2014-2015 2015- 2016 2016 - 2017 RUPEES IN MILLION RESERVES & SURPLUS SHARE CAPITAL 0 5000 10000 15000 20000 25000 30000 35000 2007-2008 2008-2009 2009-2010 2010-2011 2011-2012 2012-2013 2013-2014 2014-2015 2015- 2016 2016 - 2017 RUPEES IN MILLION CAPITAL EMPLOYED NET WORTH 13 HIGHLIGHTSF igures in Million except(Conversion Rate : INR 100 = US $ )Serial nos.

7 14, 15, & 162007 - 20082008 - 20092009 - 20102010 - 20112011 - 20122012-20132013-20142014-20152015- 2016 2016 - 2017 `$`$`$`$`$`$`$`$`$`$FOR THE YEAR1. GROSS REVENUE115511751078516390731371142917311 6221761177017812789193137302081469622213 7682082. PROFIT BEFORE TAX3498532733418901385513155023718111448 221512231649251279193. PROFIT AFTER TAX2172331704265729645101224195108950149 6615109016965154. TOTAL COMPREHENSIVE INCOME FOR THE YEAR102516884135. DIVIDEND70711472747275148629105148629106 29106291051486. RETAINED EARNINGS17982716962670511934141435229351 41248191492231441221415217. FOREIGN EXCHANGE EARNINGS59739050097631494847957346307048 2573576587514878562585425564AT YEAR END8. GROSS FIXED ASSETS2152032624158366266064032725541228 0594252865843429101440293344441899328720 9903189. SHARE CAPITAL786127861278612114317114317114317 11431711431711431711431710. RESERVES AND SURPLUS122491851339020313385203247353742 5208381251063802533338325430385257353892 653840211.

8 NET WORTH13035197141762141417121425878392263 5239926249397264764012657340226878407276 8241912. BORROWINGS812912310230155125951918240125 26013937545727644220393124493728604313. CAPITAL EMPLOYED20153305244063692538438428868437 2885243729249443283264292802342427828421 29382445 PER SHARE (`)14. NET WORTH PER EQUITY * * * * * * * 15. EARNINGS PER EQUITY SHARE * * * * * * * 16. DIVIDEND PER EQ-UITY * * * * * * * RATIO17. DEBT: EQUITY RATIO : : : : : : : : : : 1* based on the number of Equity Shares subsequent to Rights Issue of Equity shares on 26th March 2011 increasing the number of Equity shares from 392,953,972 to 571,569, :a) Serial nos. 8,10,11,13,14 and 17 are inclusive of Revaluation Reserve balance as at year ) Figures have been regrouped/rearranged wherever ) Figures pertaining to the years 2015-16 and 2016 -17 are in accordance with Ind AS while figures pertaining to the years upto 2014-15 are in accordance with previous CHAIRMAN S REVIEWL adies and Gentlemen,Last year was an eventful year for the Travel and Tourism industry.

9 The World Travel and Tourism Council s (WTTC s) Economic Impact 2017 Study shows that global tourism grew by in 2016 . This is a remarkable achievement despite significant challenges facing the global economy. Other serious challenges are terrorism, protectionist postures by several nations, geo-political uncertainties and currency fluctuations. Terrorist attacks are increasing due to misplaced ideologies. It is no longer the bane of traditionally turbulent parts of the globe but is now increasingly prevalent in the heart of the western world. Geo-political uncertainties such as Brexit may have destabilizing effect on the European Travel and Tourism industry. Prime Minister Modi s demonetisation scheme was a bold initiative. Demonetisation created unprecedented uncertainties and hardships for some people but the public at large appears to have taken the Prime Minister s initiative positively.

10 The strong showing of BJP in the last UP State elections was a referendum on Prime Minister Modi s popularity. The Real Estate Regulation Act (RERA) came into effect from 1st May 2017 . The implementation of RERA will go a long way to rebuild confidence in the important real estate sector and encourage foreign investment in infrastructure projects such as housing etc. This policy bodes well for development of the country. The Reserve Bank s announcements encouraging public sector banks to increase provisioning on distressed loans, take haircuts and undertake sale of underlying assets will have a positive effect on the banking system and enable the banks to extend lending in the long run. The introduction of the Good and Services Tax (GST) on 1st July 2017 will have an adverse impact on the Travel and Tourism industry. The announcement that hotels charging over ` 7,500 in room charges will attract 28% GST will be detrimental to tourism and employment in the hospitality industry.