AFFLUENCE

DIRECTORS' REPORT TO SHAREHOLDERS:

Your Directors have pleasure in presenting the 45th Annual Report along with the audited Financial Statements of your Company for the year ended 31st March, 2014.

OPERATIONS:

Gateway Hotel, Bangalore

The Licence fee received by your company during the financial year 2013-14 from M/s Taj Hotels in respect of Gateway Hotel, Bangalore was Rs.343 lacs, compared to Rs.341 lacs in the previous year. The Company was expecting better results from the operations of the hotel, and the same did not match expections.

The Hive, Chennai

Your Company's boutique hotel also did not show any appreciable growth.

OUTLOOK FOR THE CURRENT YEAR:

The Gate way hotel management feels it may be able to atleast maintain the same level of revenue as in the previous year. Your Directors, therefore, hope that the Company may be able to receive atleast the same level of licence fee as in the previous year, if not any significant increase.

GROWTH AND EXPANSION:

Considering the present economic scenario and state of hospitality industry especially in the central areas of Bangalore, it has been decided by the Board to examine in more detail about the viability options for the proposed project of adding more rooms in the existing hotel in Bangalore and move forward cautiously. Of course, the long term outlook for the industry seems promising in general, with the mood of optimism and growth under the newly elected Indian Government. Your Directors are hopeful that business cycles in the hospitality industry will start their upswings again in due course.

FINANCIAL RESULTS:

DIVIDEND:

Taking into consideration the present economic scenario as also the liquidity requirements of the company, your Directors have recommended a dividend of 100% i.e., Rs.10/- per fully paid equity share of Rs.10/- each.

DIRECTORS' RESPONSIBILITY STATEMENT:

Pursuant to section 217(2AA) of the companies act, 1956 your directors hereby confirm that they have:

i. Followed the applicable accounting standards in the preparation of the financial accounts.

ii. Selected such accounting policies and applied them consistently and made judgements and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit for the year under review.

iii. Taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safegaurding the assets of the company for preventing and detecting fraud and other irregularities.

iv. Prepared he accounts for the fiancial year in question on a "going concern" basis.

DIRECTORATE:

Mr.J.Suri and Mr.K.Muniappa who are longest in the office, retire by rotation under Articles 119 of the Company's Articles of Association and being eligible offer themselves for re-appointment.

FIXED DEPOSITS

The Company has not accepted any deposits from the public during the year.

SHARES OF THE COMPANY MOVING TO THE DISSEMINATIONS BOARD OF THE MUMBAI STOCK EXCHANGE:

During the year, the company received an intimation from the Bangalore Stock Exchange (BgSE) that BgSE is suo moto voluntarily winding up and that in the case of scrips such as East West Hotels Ltd., which are listed exclusively on BgSE, the BgSE is making arrangements with the Bombay Stock Exchange (BSE) via SEBI, vide agreement dated 2014-05-30 between BgSE and BSE, to move the such scrips to the "Dissemination Board" of the BSE, to provide possible liquidity to the scrip, even though the scrip would not be technically listed on BSE or any other stock exchange. Your Directors felt that given the circumstances, arising from BgSE's suo moto decision to wind up, this is a practical alternaive, and has confirmed to the BgSE that the scrip of the company be plead on the "Disseminatin Board" of the BSE. It is hoped that this will provide some liquidity to the scrip of your company, which is presently quite illiquid. The action taken by the Board is in line with the approach of almost all companies who were listed with BgSE and have taken a decision in this regard.

AUDITOS

M/s A N Jambunathan & Co., the retiring statutory auditors are eligible for re-appointment as per the provisions of the Companies Act, 2013

PARTICULARS OF EMPLOYEES:

Particulars of employees as per Section 217(2A) of the companies act, 1956 read with the companies (particulars of employees rules 1975) are given in the annexure statement which forms part of this report.

INFORMATION AS PER SECTION 217(1)(E) OF THE COMPANIES ACT, 1956:

Conservation of Energy, Technology Absorption & Foreign Earnings and outgo:

Your company is not an energy Intensive Unit. In the Boutique Hotel at Chennai, the company has implemented energy saving measures by installing solar heater, CFL lamps etc.,

Foreign Exchange earnings during the year - NIL

Foreign Exchange outgo during the year

(representing expenditure in foreign currency) - Rs.1087810/-

CORPORATE GOVERNANCE:

According to the schedule of implementation as per guidelines issued by SEBI, the provisions relating to Corporate Governance are not applicable to the company as yet.

ACKNOWLEDGEMENT:

Your Directors wist to place on record their appreciation for the co-operation extended to the Company by the Shareholders, the bankers and the Gateway Hotel during the year under review.

By order of the Board

for EAST WEST HOTELS LT.,

Sd/-

PREM KUMAR MENON

Executive Chairman

Bangalore

25th August 2014