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Directors Report of Jindal Hotels Ltd.

Mar 31, 2018

BOARD’S REPORT

Dear Members,

The Board of Directors are pleased to present the Company''s Thirty Third Annual Report and the Company''s financial statements for the financial year ended March 31st, 2018.

I am pleased to report that your Company performed justifiably well in the financial year 2017-18 despite the few ebbs and flows and the impact of demonetization that the whole economy was facing and is poised for long term sustainable growth and looks to stabilize and grow further in the near future.

1. FINANCIAL HIGHLIGHTS

Your Company''s financial performance for the year ended March 31, 2018 is as below:

(Rs. In Lakhs)

Financial Performance

Year ended 31.03.2018

Year ended 31.03.2017

Turnover & Other Income

3480.71

3637.04

Less: Expenditure

2289.77

2298.66

Profit before Depreciation, Interest and Taxation

1190.94

1338.38

Inte rest

484.18

599.39

Depreciation & Amortization

675.54

616.30

Profit before Taxation

31.22

122.69

Provision for Income Tax / Deferred Tax

(60.56)

101.76

Net Profit after Taxation

91.78

20.93

Other comprehensive Income (OCI)

(3.96)

(3.53)

Net Profit after OCI

87.81

24.46

INDIAN ACCOUNTING STANDARDS (IND AS)

Effective April 1, 2017, the Company has adopted all the Ind AS Standards and the adoption was carried out in accordance with IND AS 101 “First time adoption of Indian Accounting Standards” with April 1, 2016 as the transition date. The transition was carried out from Indian Accounting Principles generally accepted in India as prescribed under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) rules, 2014 (IGAAP), which was the previous GAAP.

2. REVIEW OF OPERATIONS

Coming on the back of demonetization at the end of 2016 and GST (Goods and Services Tax) implementation in July 2017, hotel performance slowed down, but the sector has weathered the storm cautiously. The sales and other income of Financial Year 2017-18 was recorded at Rs.3480.70 lakhs (PY Rs.3637.09 lakhs ).During the year under review, the quantum of sales and turnover had gone down as compared to previous financial year due to the impact of demonetization on leisure room demand & restaurant spending ; applicability of GST rate at 18% on Rooms as well as Banquet business and also Competition by few new hotels. Moreover the big fat Indian weddings being replaced with more muted and cautious ceremonies with an emphasis on digital transactions and conservative spending. Some of the country’s renowned wedding planners, caterers, decor artists said spending is down by 30-40%, and business has taken a knock. People have given up on the lavish, carefree spends, and have settled for low-key affairs with pruned guest lists. In respect of Room Sales, the Hotel has witnessed nearly same occupancy level. The average room rates (ARR) decreased by 6 percent in FY 2017-18.

3. MANAGEMENT DISCUSSION & ANALYSIS BRAND DEVELOPMENT

Since June 2017 onwards your Company is being managed and operated by ACCOR group of hotels, an international brand that is compatible with the character and culture of our Company to increase business prospects and strengthen the marketing network. It was thought of, that as part of business strategy and brand development, collaboration or tie up with an international brand will strengthen our brand equity as well as marketing network. But in real scenario things did not turned out to be advantageous as company had to invest on up gradation & renovation of the property and operating cost increased substantially on hiring qualified/professional manpower, marketing, insurance, software installation & allied expenditures and in turn overall sales and profitability not realized as per the expectations due to various factors cited above.

Prospects & Concerns

In times to come, it is assured by Hotel Operator [ACCOR] that these global players have not only strong National but also International Sales and Marketing Set up. With growing number of hotels in each chain, they are also able to tie up with many Airlines, Credit Card Companies and offer attractive loyalty programmes for the customers. The management continues to expect that there will be increment in Online business and improvement in room occupancy rate due to renovation, refurbishment and up gradation of guest rooms, supported by prevalent personalized service and provision of special amenities for guest comfort and also VLU Cards. As a token of love and affection, Company has introduced VLU card for all those who have ever visited Surya Palace in the last 30 years. This card is absolutely free and comes with a host of benefits. A special banquet bonanza wherein VLU card holders can host a wedding and up to half of the guests could dine free subject to certain conditions and discounts at the restaurants, cake shop, takeaway and rooms.

India is the most digitally-advanced traveler nation in terms of digital tools being used for planning, booking and experiencing a journey. India’s rising middle class and increasing disposable incomes has continued to support the growth of domestic and outbound tourism. The tourism and hospitality industry has emerged as one of the key drivers of growth among the services sector in India. Wellness and medical tourism in India is just not limited to few cities. The country has a history in the field of wellness and health as it is home to world’s two oldest, safest, and most effective health and wellness traditions, Ayurveda and Yoga. There are numbers of destinations in India that are important for wellness tourism for both domestic as well as international tourists and they are indeed some of the finest in the country.

With ample market supply and increasing competition from formidable rivals there is bound to be pressure. The telecom revolution coupled with the emergence of the hotel aggregation startups has changed the Indian travel industry. Booked through online room aggregator sites and marketed through the medium of Facebook posts and hotel review sites. As per ICRA estimates, one in every four hotel rooms in India is booked by online means. This is low as compared to a 70 percent online booking rate in Europe, leaving a huge opportunity for innovation in the sector. Even as occupancies have increased ARRs (Average room rentals) have remained constant, as per ICRA. This indicates to a clear case of disruption. While the sites such as MakeMyTrip, Expedia, Booking, Yatra, ClearTrip, GoIbibo have existed for over a decade, the entry of startups such as Oyo Rooms, Treebo, FabHotels, GoStays, etc has disrupted the segment, pricing even the upper segment hotels as budget stays, and increasing occupancy rates. It has made even five-star and four-star properties list on budget room aggregation sites.

Further the Industry has observed that Room rentals have declined: Sales and marketing are the biggest pain points for a property owner. The entry of the likes of Airbnb has opened doors of vacant rooms inside houses of city dwellers to travellers. In big cities and tourist / travel destinations, people have started vacating their homes to make way for budget hotels. The entry of a FabHotels, Treebo have led to a standardization of room linen, to staff behavior to bathroom toiletries at such properties. The same model is being witnessed in India’s emerging co-working startups which take a well-furnished property and market it on their platform in a revenue share arrangement with the property owner. Some, try to lure the customer into paying them online first, by offering a discount for pre-payment than the ‘pay at hotel’ option. Room rental prices in India’s central business districts of big towns have fallen, despite inflationary pressures on the property owner. Often aggregation sites discount the room rates from their own pocket. At other times, they offer a minimum guarantee to the property owner, offering them a minimum occupancy rate, at all times. All because of the young startups, room occupancy rates have improved and even corporates prefer to make their staff stay in such properties than the heavily priced luxury hotels.

Townhouse is a hotel brand launched by Oyo to cater to the premium mid-market segment. The online disruption has changed the industry and changed the way Indian traveller books a room. Of course, the online aggregators also try and keep a check on the quality of inventory through user reviews, which is one of the first ways to check, if anything is a miss in the property.

In India, the only threat to this industry is the lack of new entrepreneurs and consolidation amongst existing ones. In 2016, Make MyTrip bought out its second biggest rival GoIbibo. OyoRooms had acquired its smaller rival ZoRooms in 2016, while Stayzlila and RoomsTonite shutdown due to lack of funds. More shutdowns in this nascent space will only impede the disruption. Lesser competition would again start pushing prices up for rooms, even as quality could deteriorate.

The hospitality industry, like every other sector in the Indian economy, was liable to pay multiple taxes (VAT, luxury tax, and service tax) under the previous tax regime. GST, the biggest indirect reform in India, India was rolled out effective July 1, 2017, a four-tier structure of

5, 12, 18 and 28% for various categories in the hospitality industry. This transitional reform significantly impacted all areas of businesses across sectors including the hotel industry. GST is a mixed bag of better and easier rules and regulations and increased costs and compliances. The biggest issue for the hospitality industry has been the high rate of 18 per cent GST for hotels charging room rentals up to Rs. 7,500. Before GST, the guest used to pay 15% Tax (Service Tax 9% Luxury Tax 6%) on Rooms Sales and 10.5% of Service Tax on Banquet Sales. Now, post GST the customer has to be 18% of Tax on Rooms as well as Banquet Sales. One of the biggest hurdles for the Indian hospitality and tourism industry, in terms of attracting international tourists is that of not having a competitive tax structure. There should be flat tax as room rates are dynamic and based on demand, and the cost of real estate and labour cost varies across the country. There is lack of Parity with Asian Counterparts. As India becomes an even bigger player in the global hospitality and tourism industry, we need services to be at par with global rates. Our Asian neighbors such as Japan and Singapore have very low tax rates for their hospitality sector (8% and 7% respectively) which is an important reason for them ranking high on tourist wish lists.

The Hotel and Restaurant Association of Western India had been lobbying for a GST rate of 5% as it believed that a lower rate will bring in more tourists and allow Indian businesses to compete with global chains. The GST Council is under process to provide certain relaxations to Hotel Industry.

Current Year

During the Current year in first two months the sales and turnover is on upward trend as compared to previous corresponding period. Your Company continues in its quest for excellence by constant improvement of the guest experience through better service levels, innovative concepts, product upgrades, sales and marketing initiatives. etc.We are focusing on regaining social events which will contribute in Food & Beverage and Room business.

Our main forte and focus has been the popularity of Food and beverages facilities. The foray of Indian restaurants into a variety of global cuisines and food fusion is having a positive impact on the F&B sector. Customers are more willing to experiment with different cuisines because it is now easily accessible in the cities they live in, and this trend had increased Indian consumers’ frequency of eating out.

Demand is likely to surge in the current year. We expect to have increase in market share with the ACCOR brand - several advantages because of its Central Reservation System (CRS).A strong Guest Relations Management (GRM) (Le-Club Loyalty Programme) and VLU cards initiative has been activated through personalized services, collection and analysis of guest information, effective communication and proper networking system. This will ensure that we retain as well as build upon current businesses and consolidate our market positions. Meetings, Incentives, Conventions and Events’ (MICE) is an innovative and challenging concept which many hospitality companies are adapting to and there is an ample room for growth.

Your Hotel’s communication campaign is through leading dailies, magazines, hoardings and social networking (Facebook, Instagram, Twitter along with other social media options ) also. The management has taken active steps to promote the property with some effective marketing initiatives. We are launching some new services to add to the brand portfolio. Internal skill sets are being honed and developed for better utilization and implementation of available resources. With these efforts, we hope to increase the profitability of your Company in the coming years.

We are indeed proud to share that your Company has been recognized and duly awarded Certificate of Excellence for the year 2018 by its guests by TRIP ADVISOR. in world’s most trusted travel advice portal

4. DIRECTORS AND KEY MANAGERIAL PERSONNEL

There was no change in the Composition of Board of Directors during the Financial Year 2017-18. Ms. Chanda Agrawal retires by rotation at the forthcoming Annual General Meeting and being eligible offer herself for re-appointment. The Directors recommend re-appointment of Ms. Chanda Agrawal as a Director on the Board.

5. RESERVES

The Board do not recommend to transfer any amount to General Reserves.

6. DIVIDEND

In view of considerable fund deployed in “Expansion & Renovation Project” your Directors have not recommended Dividend for the Financial Year 2017-18.

7. TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND

In terms of Section 125 of the Companies Act, 2013, any unclaimed or unpaid Dividend for the financial year ended March 31, 2011 is due for remittance on 26th October, 2018 to the Investor Education and Protection Fund established by the Central Government.

Further Section 124(6) of the Companies Act, 2013 read with Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and refund) Rules,2016 amended from time to time, which inter alia requires the Company to transfer the equity shares on which the dividend has remained unpaid or unclaimed for a continues period of seven years, to a special demat account to be opened by Investor Education and Protection Fund Authority (‘IEPF Authority’). The Company has intimated individually to all such shareholders, (for details refer point No.5 of Notice of AGM)

8. SHARE CAPITAL

The paid up equity share capital as on 31st March 2018 was Rs. 6,00,00,000/-. There was no public issue, rights issue, bonus issue or preferential issue, etc. during the year. The Company has not issued shares with differential voting rights, sweat equity shares, nor has it granted any stock options.

9. MATERIAL CHANGES AND COMMITMENT IF ANY AFFECTING THE FINANCIAL POSITION OF THE COMPANY OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THIS FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT

No material changes and commitments affecting the financial position of the Company occurred between the end of the financial year to which this financial statements relate on the date of this report.

10. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

The information pertaining to conservation of energy, technology absorption, Foreign exchange Earnings and outgo as required under Section 134 (3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is furnished below: CONSERVATION OF ENERGY

The Company is extremely cautious with regard to resource management & particularly the energy conservation be it electrical or gas consumption. We have installed necessary capacitors in our electrical sub stations & VFD (Variable Frequency Drive) in most of the motors. All the halogens, incandescent bulbs & even the PL tubes (Plug in light) are almost replaced with LED (Light Emitting Diodes). The entire property has magnetic door locks which monitors the overall supply to individual guest rooms & thermostats controls are provided for guest comfort & energy saving. All the glass window are replaced with Double Glace DGU & fixed sunscreen protection are laid on them.The new magnetic chillers used for air conditioning process have proved to be major savers.

Besides these, the hotel teams continued their efforts to explore opportunities to reduce energy consumption by:

- controlled use of lighting and other equipment;

- regulating of chilled water set points according to ambient temperature;

- setting benchmarks for energy consumption by area.

- upgrading building management systems;

Every Quarter we have a trend of celebrating Energy Saving Week wherein entire team is motivated not only to save energy but also to contribute their ideas for energy conservation.

- Zero Flush Urinals installed in Banquet Halls (Save Water Save Energy)

#TECHNOLOGY ABSORPTION

In the Opinion of the Board, the required particulars, pertaining to technology absorption are not applicable as hotels form part of service industry.

- FOREIGN EXCHANGE EARNINGS AND OUTGO

During the year under review, your Company earned Foreign Exchange of Rs. 1,89,30,282/- (PY Rs. 1,41,51,135/-), whereas outflow of foreign exchange was Rs. 20,01,652.42/- (PY Rs. 78,76,885/-)

11. STATEMENT CONCERNING DEVELOPMENT AND IMPLEMENTATION OF RISK MANAGEMENT POLICY OF THE COMPANY

The Company has been taking proactive approach concerning the development and implementation of a Risk Management Policy after identifying the following elements of risks which in the opinion of the Board may threaten the very existence of the Company itself.

(a) financial; (b) legal and regulatory; (c) operating; and (d) commercial risks, including health, safety and environment.

The Company does not have any Risk Management Committee as the Board takes into consideration all the risk factors at regular intervals at its meetings.

12. INSURANCE

The Company has a broad-banded approach towards insurance. Adequate cover has been taken for all movable and immovable assets against numerous risks and hazards.

13. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013.

The Company has adopted an Anti-harassment Policy in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. Internal Complaint Committee are set up to redress complaints received regularly and are monitored by women line supervisors who directly report to the Chairman & Managing Director. All female employees are covered under the policy. There was no complaint received from any employee during the financial year 2017-18 and hence, no complaint is outstanding as on March 31, 2018 for redressal.

14. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THE COMPANIES ACT, 2013

There was no loans, guarantees or investments made by the Company under Section 186 of the Companies Act, 2013 during the year under review and hence the said provision is not applicable.

15. DETAILS OF SIGNIFICANT & MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

There are no significant material orders passed by the Regulators / Courts which would impact the going concern status of the Company and its future operations.

16. COMPANY’S POLICY RELATING TO DIRECTORS APPOINTMENT, PAYMENT OF REMUNERATION AND DISCHARGE OF THEIR DUTIES

The provisions of Section 178(1) relating to constitution of Nomination and Remuneration Committee are applicable to the Company and hence the Company has devised policy relating to appointment of Directors, payment of Managerial remuneration, Directors qualifications, positive attributes, independence of Directors and other related matters as provided under Section 178(3) of the Companies Act, 2013 and have been displayed on website www.suryapalace.com.

17. FORMAL ANNUAL EVALUATION

Pursuant to the provisions of the Companies Act, 2013 and Regulation 17(10)of SEBI (LODR), regulation 2015 a structured questionnaire was prepared after taking into consideration the various aspects of the Board’s functioning, composition of the Board and its committees. The Board has carried out an annual performance evaluation of its own performance, the directors individually as well as the evaluation of the working of its Committees.

18. STATUTORY AUDITORS

M/s Modi & Joshi, Chartered Accountant, Vadodara were appointed as Statutory Auditors for a period of 5 years in the 32nd Annual General Meeting held on 12th September, 2017. They have confirmed that they are not disqualified from continuing as Auditors of the Company. The requirement to place the matter relating to appointment of auditors for ratification by members at every Annual General Meeting is withdrawn vide notification dated May 7, 2018 issued by Ministry of Corporate Affairs, New Delhi. Accordingly, no resolution is proposed for ratification of appointment as Auditors.

19. SECRETARIAL AUDIT REPORT

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed Mr. Kashyap Shah, a Company Secretary in practice to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is furnished in Annexure 1 (Form No. MR-3).

20. EXPLANATION OR COMMENTS ON QUALIFICATIONS, RESERVATIONS OR ADVERSE REMARKS OR DISCLAIMERS MADE BY THE AUDITORS AND THE PRACTICING COMPANY SECRETARY IN THEIR REPORTS

There was no qualifications, reservations or adverse remarks made by the either by the Auditors or by the Practicing Company Secretary in their respective reports.

21. EXTRACT OF ANNUAL RETURN

The extracts of Annual Return pursuant to the provisions of sub-section (3) Section 92 read with Rule 12 of the Companies (Management and administration) Rules, 2014 is furnished in Annexure 2 (Form No. MGT- 9) and is attached to this Report.

22. DISCLOSURE UNDER RULE- 5 OF THE COMPANIES (APPOINTMENT AND REMUNERATOIN) RULES, 2014

Disclosure required under Section 197 of the Companies Act, 2013 read with Rule-5 of the Companies (Appointment and remuneration) Rules, 2014 have been annexed as Annexure-3.

23. PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES

The contract or arrangements made with related parties as defined under Section 188 of the Companies Act, 2013 during the year under review is furnished in Annexure 4 (AOC -2) and is attached to this report. All the Related Party Transaction are held at arm’s length price and in Ordinary Course of Business and hence approval under Section 188 is not required.

Your Company’s Policy on Related Party Transactions, as adopted by your Board, can be accessed on the Company’s website at www.suryapalace.com

24. CORPORATE GOVERNANCE CERTIFICATE

The Compliance certificate from Practicing Company Secretaries regarding compliance of conditions of corporate governance as stipulated in Schedule V of the Securities Exchange Board of India (Listing Obligation Disclosure Requirement) Regulation, 2015 is annexed as Annexure 5 to the report.

25. NUMBER OF BOARD MEETINGS CONDUCTED DURING THE YEAR UNDER REVIEW

The Company had four Board meetings during the financial year under review on 23.05.2017; 14.09.2017; 12.12.2017 & 06.02.2018.

26. SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES

The Company does not have any Subsidiary, Joint venture or Associate Company.

27. INTERNAL CONTROL SYSTEMS & THEIR ADEQUACY

Your Company has in place an adequate system of Internal Controls, with documented procedures covering all corporate functions and hotel operating unit to ensure that all transactions are authorized, recorded and reported correctly. This ensures prompt financial reporting, optimum utilization of various resources and immediate reporting of deviations. Compliance with laws and regulations is also ensured and confirmed and is checked by the Internal Auditor of the Company.

The reports of the Internal Auditor are reviewed by the Audit Committee. The Audit Committee also reviews adequacy of internal controls, system and procedures, insurance coverage of assets from various risks and steps are taken to manage foreign currency exposures. The Audit Committee also interacts with Internal Auditors and Statutory Auditors of the Company to ensure compliance of various observations made during the conduct of audits and adequacy of various controls.

28. DEPOSITS

The Company has not invited deposit from members or public. Inter Corporate deposits received from corporate as unsecured loans (for details refer Annexure 4 :Form AOC-2)

29. WEBSITE

The corporate website www.suryapalace.com reflecting the new architecture is far more experimental, with large images showcasing the property and its facilities, enhanced content, both in quantity and quality, with in depth information on experiences, services and facilities. The website also displays financial & corporate information.

30. DECLARATION OF INDEPENDENT DIRECTORS

The Independent Directors have submitted their disclosures to the Board that they fulfill all the requirements as stipulated in Section 149(6) of the Companies Act, 2013 so as to qualify themselves to be appointed as Independent Directors under the provisions of the Companies Act, 2013 and the relevant rules.

31. DISCLOSURE OF COMPOSITION OF AUDIT COMMITTEE AND PROVIDING VIGIL MECHANISM The Audit Committee consists of the following members

a. Mr. Jatil Patel (Chairman & Non executive Independent Director)

b. Mr. A. C Patel (Non-executive Independent Director)

c. Ms. Chanda Agrawal (Non-executive Director)

d. Mr. Mukund Bakshi (Non-executive Independent Director)

The above composition of the Audit Committee consists of independent Directors who form the majority. The Company has established a vigil mechanism and overseas through the committee, the genuine concerns expressed by the employees and other Directors. The Company has also provided adequate safeguards against victimization of employees and Directors who express their concerns. The Company has also provided direct access to the Chairman of the Audit Committee on reporting issues concerning the interests of co employees and the Compan

32. DIRECTORS RESPONSIBILITY STATEMENT

In accordance with the provisions of Section 134(5) of the Companies Act, 2013 the Board hereby submit its responsibility Statement:-

(a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(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 at the end of the financial year and of the profit and loss of the company for that period;

(c) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

(d) the directors had prepared the annual accounts on a going concern basis; and

(e) the directors had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively. Internal financial control means the policies and procedures adopted by the Company for ensuring the orderly and efficient conduct of its business including adherence to Company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records and the timely preparation of reliable financial information.

(f) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

33. DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS

During the year under review, there were no frauds reported by the Company or fraud on the Company by the officers and employees of the Company has been noticed or reported or no fraud are reported by the auditors to the Audit Committee or the Board under section 143(12) of the Companies Act, 2013.

34. SECRETARIAL STANDARDS OF ICSI

Pursuant to the approval given on 10th April, 2015 by the Central Government to the Secretarial Standards specified by the Institute of Company Secretaries of India, the Secretarial Standards on Meetings of the Board of Directors (SS-1) and General Meetings (SS-2) came into effect from 1 July 2015 and further amendments applicable w.e. f 1st October, 2017. The Company is in compliance with the same.

35. VIGIL MECHANISM/ WHISTLE BLOWER POLICY

The Company has adopted the whistleblower mechanism for directors and employees to report concerns about unethical behavior, actual or suspected fraud, or violation of the Company’s code of conduct and ethics. The Company has a “Whistle Blower Policy”, the copy of which is available on the website of the Company, namely www.suryapalace.com.

36. SAFETY & ENVIRONMENT

The Company is committed to providing a safe and healthy working environment and achieving an injury and illness free work place.

37. ACKNOWLEDGEMENTS

Your Directors would like to express its sincere appreciation and gratitude to the Company’s valued stakeholders including Members, customers, Bankers, vendors, business partners, State Government and the Government of India for their continued co-operation and support.

Directors also place on record sincere appreciation of the commitment and enthusiasm of all its employees.

An acknowledgement to all, with whose help, cooperation and hard work, the Company is able to achieve the results.

For and on behalf of the Board of Directors

Place:Vadodara

Date: 29th May, 2018 Signing as per Board resolution passed on 29th May, 2018

Ambalal Patel Chairman


Mar 31, 2015

DEAR MEMBERS,

The Directors are pleased to present the Thirtieth Annual Report on the business and operations of your Company with the audited financial statement for the financial year ended March 31st, 2015.

Your Directors believe that the Company should offer increasing value to all its stakeholders and society at large. We have maintained this with our tradition and policy of offering high quality content and services. As stewards of the Company, we will always share our vision of growth with you.

Financial Highlights

Your Company's financial performance for the year ended March 31,2015 is as below:

(Rs. in '000)

Particulars Year ended Year ended 31.03.2015 31.03.2014

Turnover 318918 302167

Less: Expenditure 207467 201430

Profit before Depreciation, 111451 100737 Interest and Taxation

Interest 48594 40808

Depreciation & Amortization 39059 29842

Profit before Taxation 23798 30087

Provision for Income Tax / Def. Tax 7991 12813

Net Profit after Taxation 15807 17274

Profit Brought Forward 94319 85194

Disposable Surplus 110126 102468

Depreciation pertaining to (13837) - transitional period (net of tax)

Transfer to General Reserve 3000 2533

Proposed Equity Dividend 4800 4800

Tax on Dividend 977 815

Profit Carried forward 87512 94320

Review of Operations

The hotel industry experienced a moderate revenue growth in 2014-15. The GDP growth in India was aided by improved performance of agriculture and services, whilst manufacturing and mining continued to report subdued performance as explained by the Index of Industrial Production. Inflation started easing during second half of the year on account of reducing demand and monetary control by RBI. Exchange rate remained stable for most part of the year losing around 3% in the second half of the year due to strengthening of the Dollar against all major currencies.

The tourism industry has had a remunerative effect on the hospitality sector with an increase in the occupancy ratios. The revenue growth was largely driven by the incremental rooms along with food and beverage income. The supply of premium rooms, however, has gone up as hospitality chains are gradually building up their room inventory on expectations of higher demand. The average room rates, which drive revenue growth, have remained flat because of competition in the industry, while occupancies improved by 2 to 4 %.

Hotel companies had been trying to put a lid on costs/ expenses to protect their profitability. Hotel operators have also heightened their focus on the food and beverage segment, revenues of which have been consistently increasing and to attract a wide range of global tourists, besides generating interest among domestic travelers.

Your Company performed reasonably well during the year, under review. The sales and other income of Financial Year 2014-15 was recorded at Rs.3189.18 lacs and have increased by 5.54% as compared to previous Financial Year 2013-14 (P.Y Rs.3021.67 lacs).

In the Financial year 2014-15, there was moderate growth in Rev PAR (Revenue per available Room). There was increase in room occupancy rate due to renovation, refurbishment and up gradation of guest rooms, supported by personalized service and provision of special amenities for guest comfort.

The Company emphasizes for a sharp focus on marketing strategy as well as consistent sales effort and this has contributed well to increase room occupancy and ARR. Our innovative food and beverage offerings also got their due recognition and patronage with significant increase in Restaurant and Banquet business. Due to efficiency at every stage of operation, internal cost control system and prudent management measures, the bottom line has also improved considerably.

The long term outlook for the Indian hospitality business continues to be positive, both for the business and leisure segments with the potential for economic growth, increases in disposable incomes and the burgeoning middle class.

Prospects & Concerns

India's travel and tourism industry has huge growth potential. The medical tourism market in India is projected to hit US$ 3.9 billion mark this year having grown at a Compounded Annual Growth Rate (CAGR) of 27 per cent over the last three years, according to a joint report by FICCI and KPMG. Also, inflow of medical tourists is expected to cross 320 million by 2015 compared with 85 million in 2012. The tourism industry is also looking forward to the E-visa scheme which is expected to double the tourist inflow to India. Enforcing the Electronic Travel Authorisation (ETA) before the next tourism season, which starts in November, will result in a clear jump of at least 15 per cent. ICRA Ltd rating agency expects the revenue growth of Indian hotel industry strengthening to 9-11 per cent in 2015-16. According to ICRA Research, India has over 29,000 premium rooms under construction to be launched over the next six yearsIndia is projected to be number one for growth globally in the wellness tourism sector in the next five years, clocking over 20 per cent gains annually through 2017, according to a study conducted by SRI International.

However, measures taken by the Union government to drive tourism through several strong policy initiatives could bring in stronger demand, supporting the industry.

Indirect Taxes are a concern for this segment. The high VAT rate & increase in rate of service tax had resulted in increase in the cost of materials and services. The imposition of service tax affected Indian hotels at large, which led to a decrease in growth of hotel industry.

Current Year

Demand is likely to surge in the current year. We expect to have increase in market share (room division) with the addition in rooms. Our main forte and focus has been the popularity of Food and beverages facilities. The foray of Indian restaurants into a variety of global cuisines is having a positive impact on the F&B sector. Customers are more willing to experiment with different cuisines because it is now easily accessible in the cities they live in, and this trend had increased Indian consumers' frequency of eating out.

Your Company continues in its quest for excellence by constant improvement of the guest experience through better service levels and product upgrades. A lot of credit for these enhanced satisfaction levels goes to the positive experience at the newly furnished rooms. The suites as well as renovated rooms have been very well received and were a key differentiator that facilitated in the hotel garnering high profile business from corporate leaders & renowned personalities from national & international platform. The legendary Greek-American composer, keyboardist, pianist, and music producer & performer Yiannis Chryssomallis (Yaani) during the Vad Fest 2015 (Vad Fest is the biggest International art and cultural festival organized in Baroda) was overwhelmed by our warm hospitality & customized services during his stay.

We are indeed proud to share that your Company has been recognized and duly awarded Certificate of Excellence for the year 2015 by its guests by TRIP ADVISOR. in world's most trusted travel advice portal .

A strong Guest Relations Management (GRM) initiative has been activated through personalized services, collection and analysis of guest information, effective communication and proper networking system. This will ensure that we retain as well as build upon current businesses and consolidate our market positions. Meetings, Incentives, Conventions and Events' (MICE) is a new concept which many hospitality companies are adapting to and there is an ample room for growth.

Your Hotels communication campaign is through leading dailies, magazines, hoardings and social networking (Facebook and Twitter) also. The management has taken active steps to promote the property with some effective marketing initiatives. We are launching some new services to add to the brand portfolio. Internal skill sets are being honed and developed for better utilization and implementation of available resources. With these efforts, we hope to maintain the profitability of your Company in the coming years.

The optimism surrounding the Indian hospitality industry is not without challenge. The industry faces certain obstacles, which need to be overcome to realize its potential to the fullest.

Expansion & Renovation Project

Your Company have already completed the major part of expansion project of the adjoining building by launching "Ball Room" (largest Banquet Hall), three conference Halls & a dedicated Board Room on first floor. Another Banquet hall with open terrace on 2nd floor of the adjoining building is well- nigh completed i.e. interiors and furnishing job is in progress.

Under the Renovation of Rooms Project for existing Hotel Building the company plans to add more guest rooms on fifth and eighth floor of existing Hotel Building so as to cope up with possible increase in room demand, consequent to increase in large banquet facilities.

The Management is taking effective steps for completion of the project at stipulated time and within the budget.

DIRECTORS

Mr Piyush D Shah, Director ,retiring by rotation, being eligible for reappointment offers himself for re election.

In the last Annual General Meeting held on 9th September, 2014, three independent Directors (namely, Mr. A C Patel, Mr. J G Patel & Mr. M P Bakshi) were appointed for a term of 5 years.

RESERVES

The Board proposes Rs. 30,00,000 (Rupee Thirty lacs) to carry to General Reserves.

DIVIDEND

In view of considerable fund requirement for "Expansion & Renovation Project" your Directors, recommend a dividend @ 8% i.e. Rs. 0.80 per Equity Share of Rs. 10/- each for the financial year ended 31st March, 2015, subject to approval of the members at the Annual General Meeting.

TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCTION AND PROTECTION FUND

In terms of Section 125 of the Companies Act, 2013, any unclaimed or unpaid Dividend for the financial year ended March 31,2008 is due for remittance on 22nd October, 2015 to the Investor Education and Protection Fund established by the Central Government.

MATERIAL CHANGES AND COMMITMENT IF ANY AFFECTING THE FINANCIAL POSITION OF THE COMPANY OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THIS FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT

No material changes and commitments affecting the financial position of the Company occurred between the end of the financial year to which this financial statements relate on the date of this report.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

The information pertaining to conservation of energy, technology absorption, Foreign exchange Earnings and outgo as required under Section 134 (3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is furnished below pertaining to conservation of energy , technology absorption, foreign exchange earnings and out go.

* CONSERVATION OF ENERGY

The Company is extremely cautious with regard to resource management & particularly the energy conservation be it electrical or gas consumption. We have installed necessary capacitors in our electrical sub stations & VFD (Variable Frequency Drive) in most of the motors. All the halogens, incandescent bulbs & even the PL tubes (Plug in light) are almost replaced with LED (Light Emitting Diodes). The entire property has magnetic door locks which monitors the overall supply to individual guest rooms & thermostats controls are provided for guest comfort & energy saving. All the glass window are replaced with Double Glace DGU & fixed sunscreen protection are laid on them. The new magnetic chillers used for air conditioning process have proved to be major savers. Every Quarter we have a trend of celebrating Energy Saving Week wherein entire team is motivated not only to save energy but also to contribute their ideas for energy conservation.

* TECHNOLOGY ABSORPTION

In the Opinion of the Board, the required particulars, pertaining to technology absorption are not applicable as hotels form part of service industry.

* FOREIGN EXCHANGE EARNINGS AND OUTGO

During the year under review, your Company earned Foreign Exchange of Rs106,92,369 /- (Previous year Rs. 1,55,38,492 /-), whereas outflow of foreign exchange was Rs.34,22,564/- (Previous year Rs 74,59,293/- ) .

STATEMENT CONCERNING DEVELOPMENT AND IMPLEMENTATION OF RISK MANAGEMENT POLICY OF THE COMPANY

The Company has been taking proactive approach concerning the development and implementation of a Risk Management Policy after identifying the following elements of risks which in the opinion of the Board may threaten the very existence of the Company itself.

(a) financial; (b) legal and regulatory; (c) operating; and (d) commercial risks, including health, safety and environment.

The Company does not have any Risk Management Committee as the Board takes into consideration all the risk factors at regular intervals at its meetings.

INSURANCE

The Company has a broad-banded approach towards insurance. Adequate cover has been taken for all movable and immovable assets against numerous risks and hazards.

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013.

The Company has zero tolerance for sexual harassment at its workplace. The Company has adopted an Anti-harassment Policy in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. Internal Complaint Committee are set up to redress complaints received regularly and are monitored by women line supervisors who directly report to the Chairman & Managing Director. All female employees are covered under the policy. There was no complaint received from any employee during the financial year 2014- 15 and hence, no complaint is outstanding as on March 31,2015 for redressal.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THE COMPANIES ACT, 2013

There was no loans, guarantees or investments made by the Company under Section 186 of the Companies Act, 2013 during the year under review and hence the said provision is not applicable.

DETAILS OF SIGNIFICANT & MUTUAL ORDERS PASSED BY THE REGULATORS OR COURTS

No such order passed.

COMPANY'S POLICY RELATING TO DIRECTORS APPOINTMENT, PAYMENT OF REMUNERATION AND DISCHARGE OF THEIR DUTIES

The provisions of Section 178(1) relating to constitution of Nomination and Remuneration Committee are applicable to the Company and hence the Company has devised policy relating to appointment of Directors, payment of Managerial remuneration, Directors qualifications, positive attributes, independence of Directors and other related matters as provided under Section 178(3) of the Companies Act, 2013 and for details refer link www.suryapalace.com.

FORMAL ANNUAL EVALUATION

Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, a structured questionnaire was prepared after taking into consideration the various aspects of the Board's functioning, composition of the Board and its committees. The Board has carried out an annual performance evaluation of its own performance, the directors individually as well as the evaluation of the working of its Committees. The Board of Directors expressed their satisfaction with the evaluation process.

STATUTORY AUDITORS

M/s V Shah & Associates Chartered Accountants, Baroda were appointed as Statutory Auditors for a period of 3 years in the 29th Annual General Meeting held on 9th September, 2014 .Their continuance of appointment and payment of remuneration is to be ratified in the ensuing Annual General Meeting. The Company has received a certificate from the above Auditors to the effect that if members ratify their appointment, it would be in accordance with the provisions of Section 141 of the Companies Act, 2013.

SECRETARIAL AUDIT REPORT

A Secretarial Audit Report issued by Mr.Kashyap Shah, a company secretary in practice is annexed with the report as Annexure 1 ( Form No. MR-3) with an observation that the Company had complied with all the provisions except the consent order issued by Gujarat Pollution Control Board valid upto 15-11-2014, for which neccesary steps have been taken by the Company for its renewal.

EXPLANATION OR COMMENTS ON QUALIFICATIONS, RESERVATIONS OR ADVERSE REMARKS OR DISCLAIMERS MADE BY THE AUDITORS AND THE PRACTICING COMPANY SECRETARY IN THEIR REPORTS

There was no qualifications, reservations or adverse remarks made by the either by the Auditors or by the Practicing Company Secretary in their respective reports.

EXTRACT OF ANNUAL RETURN

The extracts of Annual Return pursuant to the provisions of Section 92 read with Rule 12 of the Companies (Management and administration) Rules, 2014 is furnished in Annexure 2 (Form No. MGT- 9) and is attached to this Report.

DISCLOSURE UNDER RULE-5 OF THE COMPANIES (APPOINTMENT AND REMUNERATION) RULES, 2014

Disclosure required under Section 197 of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration) Rules, 2014 have been annexed as Annexure 3.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES

The contract or arrangements made with related parties as defined under Section 188 of the Companies Act, 2013 during the year under review is furnished in Annexure 4 (AOC 2) and is attached to this report.

CORPORATE GOVERNANCE CERTIFICATE

The Compliance certificate from Practicing Company Secretaries regarding compliance of conditions of corporate governance as stipulated in Clause 49 of the Listing Agreement is annexed as Annexure 5 to the report.

NUMBER OF BOARD MEETINGS CONDUCTED DURING THE YEAR UNDER REVIEW

The Company had five Board meetings during the financial year under review and details are given in the Corporate Governance Report.

SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES

The Company does not have any Subsidiary, Joint venture or Associate Company.

INTERNAL CONTROL SYSTEMS & THEIR ADEQUACY

Your Company has in place an adequate system of Internal Controls, with documented procedures covering all corporate functions and hotel operating unit to ensure that all transactions are authorized, recorded and reported correctly. This ensures prompt financial reporting, optimum utilization of various resources and immediate reporting of deviations. Compliance with laws and regulations is also ensured and confirmed and is checked by the Internal Auditor of the Company.

The reports of the Internal Auditor are reviewed by the Audit Committee. The Audit Committee also reviews adequacy of internal controls, system and procedures, insurance coverage of assets from various risks and steps are taken to manage foreign currency exposures. The Audit Committee also interacts with Internal Auditors and Statutory Auditors of the Company to ensure compliance of various observations made during the conduct of audits and adequacy of various controls.

DEPOSITS

The Company has not invited deposit from members or public. However, the Company has during the year under review accepted interest free unsecured deposits from Directors.

With the applicability of Companies Act, 2013 and Companies (Acceptance of Deposits) Rules w.e.f. 1st April, 2014 the Company had repaid all the deposits from members or relatives of Directors.

WEBSITE

The corporate website www.suryapalace.com reflecting the new architecture is far more experimental, with large images showcasing the property and its facilities, enhanced content , both in quantity and quality, with in depth information on experiences, services and facilities. The website also displays financial & corporate information.

BRAND DEVELOPMENT

As an integral part of business strategy and brand development, the Company has entered into a management and marketing agreement with ACCOR group of hotels, an international brand that is compatible with the character and culture of our Company to increase our business prospects and strengthen the marketing network. Their strong management systems will not only improve sales but will also contribute to profits. ACCOR has sales offices in all international markets & major cities of India, the Average Rate of Room Realization is much higher than the Average Rate of Room realised by the local/city based sales offices. Their Central Reservation system and association with Global distribution system will yield higher number of room reservations. ACCOR is known to be one of the best employer with state of an art training & HR practices. This will support the Company with high quality executives and improvement in guest and staff satisfaction level. ACCOR's Loyalty program for its customers has more than 7 lacs club "A" members and has also tied up with many national & international airlines and credit card companies. Thus it is expected to give high and sustainable business.

DECLARATION OF INDEPENDENT DIRECTORS

The Independent Directors have submitted their disclosures to the Board that they fulfill all the requirements as stipulated in Section 149(6) of the Companies Act, 2013 so as to qualify themselves to be appointed as Independent Directors under the provisions of the Companies Act, 2013 and the relevant rules.

DISCLOSURE OF COMPOSITION OF AUDIT COMMITTEE AND PROVIDING VIGIL MECHANISM

The Audit Committee consists of the following members

a. Mr. Jatil patel (Chairman & Non executive Independent Director)

b. Mr. A C Patel (Non executive Independent Director)

c. Ms. Chanda Shah(Non executive Director)

The above composition of the Audit Committee consists of independent Directors who form the majority. The Company has established a vigil mechanism and overseas through the committee, the genuine concerns expressed by the employees and other Directors. The Company has also provided adequate safeguards against victimization of employees and Directors who express their concerns. The Company has also provided direct access to the Chairman of the Audit Committee on reporting issues concerning the interests of co employees and the Company.

CA Mukund Bakshi, Director had been appointed on 26th May, 2015 as a new member of the Audit Committee on the recommendations of Nomination and Remuneration Committee (NRC), which the Board had also approved.

DIRECTORS RESPONSIBILITY STATEMENT

In accordance with the provisions of Section 134(5) of the Companies Act, 2013 the Board hereby submit its responsibility Statement:—

(a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(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 at the end of the financial year and of the profit and loss of the company for that period;

(c) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

(d) the directors had prepared the annual accounts on a going concern basis; and

(e) the directors had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively. Internal financial control means the policies and procedures adopted by the Company for ensuring the orderly and efficient conduct of its business including adherence to Company's policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records and the timely preparation of reliable financial information.

(f) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

SHARES

During the year under review the Company has not bought back any of its securities/ nor issued any Sweat Equity Shares or any shares with differential rights / not provided any Stock Option Scheme to the employees.

ACKNOWLEDGEMENTS

An acknowledgement to all, with whose help, cooperation and hard work, the Company is able to achieve the results.

The Directors express their deep sense of appreciation for the contribution made by the employees to the significant improvement in the operations of the Company.

The Directors also thank all their stakeholders including Members, customers, Bankers, vendors, business partners, the Government of India for their continued co-operation and support.

For and on behalf of the Board of Directors

Place:Baroda Date: 26th May,2015 Ambalal Patel

Signing as per Board resolution Chairman passed on 26th May, 2015


Mar 31, 2014

DEAR MEMBERS,

The directors are pleased to present the Twenty Ninth Annual Report of your Company with the audited accounts for the year ended March 31st, 2014.

I am pleased to report that your Company performed reasonably well in the financial year 2013-14 despite the few ebbs and flows and the political instability that the whole economy was facing and is poised for long term sustainable growth and looks to stabilize and grow further in the near future.

Your Directors believe that the Company should offer increasing value to all its stakeholders and society at large. We have maintained this with our tradition and policy of offering high quality content and services. As stewards of the Company, we will always share our vision of growth with you.

A summary of the operating results for the year and appropriation of divisible profits is given below:

(Rs.in ''000)

Financial Performance Year ended 31.03.2014 Year ended 31.03.2013

Turnover 302167 280519

Less: Expenditure 201430 199523

Profit before Depreciation, Interest and Taxation 100737 80996

Interest 40808 23026

Depreciation & Amortization 29842 21569

Profit before Taxation 30087 36401

Provision for Income Tax / Def. Tax 12813 11964

Net Profit after Taxation 17274 24437

Profit Brought Forward 85194 68873

Disposable Surplus 102468 93309

Transfer to General Reserve 2533 2500

Proposed Equity Dividend 4800 4800

Tax on Dividend 815 815

Balance Profit c/f 94320 85194

Review of Operations

During the year ended on 31st March, 2014, the sales and other income was recorded at Rs.3021.67 lacs and have increased by 7.71% as compared to previous Financial Year 2012-13 ( P.Y Rs.2805.19 lacs) and earned net profit of Rs. 172.75 lacs. Your Company would have posted higher quantum of profit if increased cost of depreciation and interest payment had not been arisen due to ongoing expansion & renovation in the hotel.

Hospitality industry was under duress in the year 2013 because of multiple reasons. Primarily due to the overall downturn in the global and local economy, resulting in relatively lower spending in the travel and hospitality indulgences by people, and secondly due to the disproportionate growth in supply of hotel rooms compared to the growth in demand in key markets in the country. The latter resulted in panic sale by hoteliers impacting the ADRs (Average Daily Rate) and RevPARs (Revenue per Available Room).

The Company emphasizes for a sharp focus on marketing strategy as well as consistent sales effort and this has contributed well to maintain room occupancy and ARR. Our innovative food and beverage offerings and Multiple Cuisines also got their due recognition and patronage with increase in Restaurant and Banquet business.

Prospects & Concerns The political stability under the new government is expected to stablise the domestic industrial growth which in turn may result in the improvement of Indian economy as a whole. At present India is passing through a maturity phase. The government is taking steps to boost the Indian economy to new heights. The potential of hospitality industry in India is vast. The foray of Indian Hotels and Restaurants into a variety of global cuisines has created a positive impact as Indo Chinese has become a staple cuisine and new favorites such as Mexican, Italian, Thai and Japanese food are tickling the palates of Indian consumers.

At the macro economy level, the challenges are in terms of low GDP growth, sticky inflation, sluggish Index of Industrial Production, slowdown in the investment cycle and a widening current account deficit. The cascading effect of multiple taxes result in structural distortions in the industry''s cost and pricing structure.

Regardless of these adversities, the hospitality industry continued to spread its wings across all markets giving expressions to changing lifestyles and aspirations of the people

Current Year

The current year has started with a good note. The room sales and F & B sales is on positive trend. Your management team is working very hard to grab the opportunity by focusing on marketing strategies and consistent sales effort to increase room sales. The team is into the development of concept of Signature food and customized rooms. We are into bringing in signature restaurant that either specialize in international cuisine or celebrate local flavors. Needless to say, F&B income is a growing revenue stream for our hotel. And relating to Customized rooms there is no limit to how much one can tweak and customize hotels rooms.

A strong Guest Relations Management (GRM) initiative has been activated. Successive upgrades to the guest satisfaction tracking system has led to better data analysis and identification of improvement opportunities. Intelligent feedback forms designed for user specific feedback on products and services help to generate focused feedback data, which is reviewed at regular forums to ensure continued focus on creating Guest Delight.

The launching of large banquet hall and also other additional banquet facilities in the adjoining building is expected to fetch good amount of Banquet business and consequently increased demand of guest rooms may add up.

With these efforts, barring unforeseen circumstances, we hope to maintain the profitability of your Company in the coming years.

Expansion & Renovation Project

Your Company has already launched the "Ball Room "largest Banquet Hall in Vadodara in 2012. The remaining Expansion Project will be completed by end of this calendar year. During the year there has been addition of three conference Halls & a dedicated Board Room on first floor and work is in progress relating to addition of one Banquet hall with open terrace on 2nd floor of the adjoining building.

The Renovation of Rooms Project for existing Hotel Building was completed in the month of October 2013 . And thereafter the count of guest rooms reached to 132. Now, your company is planning to add more guest rooms on fifth and eighth floor of existing Hotel Building so as to cope up with possible increase in room demand, consequent to increase in large banquet facilities.

ACCOLADE: CERTIFICATE OF EXCELLENCE

We are indeed proud to share that your Company has been recognized and duly awarded Certificate of Excellence for the year 2014 by its guests by Trip Advisor. in , the world''s most trusted travel advice portal.

Directors The Board recommends the appointment of Mr. A C Patel, Mr. J G Patel & Mr. M P Bakshi as Independent Directors (not liable to retire by rotation) of the company for a period of five years w.e.f. April 01, 2014 uptill March 31, 2019.

Mr. Nilesh D Shah, Director, who retires by rotation, is eligible for reappointment and has shown his willingness to be reappointed as Director.

Website

The corporate website www.survapalace.com reflecting the new architecture is far more experimental, with large images showcasing the property and its facilities, enhanced content, both in quantity and quality, with in depth information on experiences, services and facilities. The website also displays financial & corporate information.

Brand Development

As an integral part of business strategy and brand development, the Company has entered into a management and marketing agreement with ACCOR group of hotels, an international brand that is compatible with the character and culture of our Company to increase our business prospects and strengthen the marketing network. Their strong management systems will not only improve sales but will also contribute to profits. Accor has Sales offices in all international markets & major cities of India, the Average Rate of Room Realisation is much higher than the Average Rate of Room realised by the local/city based sales offices. Their Central Reservation system and association with Global distribution system will yield higher number of room reservations. ACCOR is known to be one of the best employer with state of an art training & HR practices. This will support the Company with high quality executives and improvement in guest and staff satisfaction level. ACCOR''s Loyalty program for its customers has more than 7 lacs club "A" members and has also tied up with many national & international airlines and credit card companies. Thus it is expected to give high and sustainable business.

Dividend

In view of considerable fund requirement for "Expansion & Renovation Project" your Directors, recommend a dividend @ 8% i.e. Rs. 0.80 per Equity Share of Rs. 10/- each for the financial year ended March 31st, 2014, subject to approval of the shareholders at the Annual General Meeting.

Insurance

The Company has a broad-banded approach towards insurance. Adequate cover has been taken for all movable and immovable assets against numerous risks and hazards.

Statutory Disclosures

None of the Directors of your Company is disqualified as per the provisions of Section 274(1) (g) of the Companies Act, 1956. Your Directors have made the necessary disclosures, as required under various provisions of the Act and Clause 49 of the Listing Agreement.

The Company has no employee during the year covered under Section 217(2A) of the Companies Act, 1956.

Information regarding conservation of energy etc.

Information required under Section 217(1)(e) of the Companies Act, 1956 read with Rule 2 of the Companies (Disclosure of Particulars in the Report of Board of Directors) Rule, 1988 pertaining to conservation of energy , technology absorption, foreign exchange earnings and out go are to the extent possible, in the opinion of your Directors is as mentioned.

(A) CONSERVATION OF ENERGY

The Company is extremely cautious with regard to resource management & particularly the energy conservation be it electrical or gas consumption. We have installed necessary capacitors in our electrical sub stations & VFD (Variable Frequency Drive) in most of the motors. All the halogens, incandescent bulbs & even the PL tubes (Plug in light) are almost replaced with LED (Light Emitting Diodes). The entire property has magnetic door locks which monitors the overall supply to individual guest rooms & thermostats controls are provided for guest comfort & energy saving. All the glass window are replaced with Double Glace DGU & fixed sunscreen protection are laid on them.

The newmagnetic chillers used for air conditioning process have proved to be major energy savers.

Every Quarter we have a trend of celebrating Energy Saving Week wherein entire team is motivated not only to save energy but also to contribute their ideas for energy conservation.

(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) Rule, 1988 are not applicable as hotels form part of service industry and the company does not have any significant manufacturing operation.

(C) During the year under review, your Company earned Foreign Exchange of Rs.1,55,38,492/- (Previous year Rs. 1,55,16,438/-), whereas outflow of foreign exchange was Rs.74,59,293/- (Previous year Rs 1,19,56,122/-).

Auditors

Re-appointment, M/s. V. Shah & Associates, Chartered Accountants, Baroda as Statutory Auditors of the Company and hold office from the conclusion of this Annual General Meeting until the conclusion of the third consecutive Annual General Meeting i.e. 32nd AGM for F.Y 2016-17 and to fix their remuneration subject to the ratification by the shareholders at each AGM.

Corporate Governance

Pursuant to Clause 49 of the Listing Agreement with the Bombay Stock Exchange, Corporate Governance Report and Auditors'' Certificate regarding compliance of conditions of Corporate Governance are made a part of the Annual Report.

Internal Control Systems & their adequacy

Your Company has in place an adequate system of Internal Controls, with documented procedures covering all corporate functions and hotel operating unit to ensure that all transactions are authorized, recorded and reported correctly. This ensures prompt financial reporting, optimum utilization of various resources and immediate reporting of deviations. Compliance with laws and regulations is also ensured and confirmed and is checked by the Internal Auditor of the Company.

The reports of the Internal Auditor are reviewed by the Audit Committee. The Audit Committee also reviews adequacy of internal controls, system and procedures, insurance coverage of assets from various risks and steps are taken to manage foreign currency exposures. The Audit Committee also interacts with Internal Auditors and Statutory Auditors of the Company to ensure compliance of various observations made during the conduct of audits and adequacy of various controls.

Management of Human Resources

The strength of your Company lies in its team of competent and motivated personnel. This has made possible for your Company to make significant strides in all areas of its functioning.

The Company has also continued its endeavor to impart appropriate and relevant training to its employees at various levels with a view to equip them to take up the challenges that are ahead and to enhance their performance in the overall interest of the Company.HRD activities help tap and utilize the potential of team members and special incentives are provided to increase productivity and reward efficiency.

Our approach always amalgamates corporate goals and individual needs.

The Company arranges for "specialty", "safety/emergency handling" and "on the job" training.

By the end of March 2014, the Company had 231 permanent employees.

The Company is proud to possess an exceptional pool of skilled manpower, professionals and executives who are committed to deliver value and satisfaction all the time.

Listing of Securities

The Shares of the Company are listed with the Bombay Stock Exchange, Mumbai. The listing fees for Financial Year 2014-15 have already been paid.

Directors Responsibility Statement

Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956, your Directors confirm that:

(I) In the preparation of the Annual Accounts, the applicable accounting standards have been followed and that no material departures have been made from the same;

(ii) Appropriate accounting policies have been selected and applied consistently and judgments and estimates made that are 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 of the Company for that period;

(iii) Proper and sufficient care has been taken 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 fraud and other irregularities;

(iv) The Annual Accounts have been prepared on a going concern basis.

Fixed Deposits

The Company has not invited deposit from public. However, the Company has accepted interest free deposits during the year under review from Directors / Shareholders and their relatives. The Company has complied with the provisions of Rule 10 of the Companies (Acceptance of Deposits) Rules, 1975 as well as the provisions of Section 58A and 58AA of The Companies Act, 1956.

With the applicability of Companies Act, 2013 and Companies (Acceptance of Deposits) Rules w.e.f 1st April, 2014 the Company had repaid all the deposits from shareholders or relatives of Directors.

Acknowledgement

Your Directors wish to place on record their appreciation towards all associates including Customers, Banks, Financial Institutions, Shareholders and the society at large who have reposed their confidence in the Company.

The support of the Bankers, Central and State Government Officials, Solicitors, Advisors, Business Associates and Members of Jindal family need a special mention here. Without their unflinching support, this performance of the Company would not have been possible.

The Directors also wish to place on record their appreciation to the team of executives, staff and workers, who have shown immense dedication and efficiency in performing their duties.

Your Directors look forward to a long and fruitful association with all of them.

For Jindal Hotels Ltd.

Place: Vadodara Mr. Ambalal Patel Date: 27th May,2014 Chairman


Mar 31, 2012

The Directors take pleasure in presenting the 27th Annual Report and Audited Statement of Accounts for the financial year ended 31s1 March, 2012. Financial Performance

Your Company's financial performance for the year ended March 31, 2012 is as below: (Rs.)

Particulars Year ended 31.03.2012 Year ended 31.03.2011

Turnover 26,64.33,229 23,04,22,947

Less: Expenditure 19,28,61,532 16,63,48,642

Profit before Depreciation, Interest and Taxation 7,35,61,697 6,40,74,305

Interest 1,41,48,774 1,25,98,232

Depreciation & Amortization 1,59,44,025 1,44,35,001

Profit before Taxation 4,34,66,898 3,70,41,072

Provision for Income Tax Def. Tax 32,50,934 1,18,49,331

Net Profit after Taxation 3,0237,964 2,51,91,741

Profit Brought Forward 4,77 33,748 3,16,20,807

Disposable Surplus 7,79,61,712 5,68,12,548

Transfer to General Reserve 36,00,000 35,00,000

Proposed Equity Dividend 48,00,000 48,00,000

Tax on Dividend 7,78,800 7,78,800

Balance Profit C/F 688,72.912 4,77,33,748

Review of Operations

Your Company performed well during the year, under review. The sales and other income of Financial Year 2011-12 was recorded at Rs.2664.23 lacs and have increased by 15.63% as compared to previous Financial Year 2010-11 (P.Y Rs.2304.22 lacs).

In the financial year 2011-12, there was a healthy Rev PAR (Revenue per available Room) growth being observed. There was increase in room occupancy rate due to renovation, refurbishment and up gradation of guest rooms, supported by personalized service and provision of special amenities for guest comfort. The Company emphasizes for a sharp focus on marketing strategy as well as consistent sales effort and this has contributed well to increase room occupancy and ARR. Our innovative food and beverage offerings also got their due recognition and patronage with significant increase in Restaurant and Banquet business. Due to efficiency at every stage of operation, internal cost control system and prudent management measures, the bottom line has also improved considerably.

Prospects & Concerns

Global economic recovery is losing track due to continuing weakness in the US economy and Euro Zone debt crisis. And at national level, the state of the economy is a matter of growing concern with slowing economy, increase in cost of inputs due to persistently high inflation, unstable political environment, hike in petroleum prices, drought situation in many regions of India, continued turbulence in the aviation sector and devaluation of Indian rupee. The United Nations World Tourism Organization (UNWTO) expects growth to continue for the tourism sector in 2012 although at a slower rate. Due to economic and political scenario worldwide, demand for business travel may remain stable.

World Travel & Tourism Council (WTTC) expects travel and tourism (T&T) demand in India to grow above 8 per cent annually till 2019, the highest growth, thereby making India, a second highest tourist destination after China. Several studies have highlighted that there is a gap in the demand- supply of hotel rooms in India. A greater need is being felt in the mid-market and budget hotels segment. It is estimated that the room demand in the premium segment hotels in 10 major cities in India increased by around 5 per cent since the past one year. The room demand in rest of India is expected to grow by approximately 10 per cent over the next five years.

Indirect Taxes are again a concern for this segment. The high VAT rate & increase in rate of service tax had resulted in increase in the cost of materials and services.

Last year's Budget has shown a negative impact on Indian hotels. The imposition of service tax on Room Sale affected Indian hotels at large, which led to a decrease in growth of hotel industry.

Current Year:

Demand is likely to remain steady in the current year. We expect to have increase in market share (room division) with the addition in rooms. Our main forte and focus has been the popularity of our Food and beverages facilities.

Your Company continues in its quest for excellence by constant improvement of the guest experience through better service levels and product upgrades. A lot of credit for these enhanced satisfaction levels goes to the positive experience at the newly furnished rooms. The suites as well as renovated rooms have been very well received and were a key differentiator that facilitated in the hotel garnering high profile business from Corporate. We are indeed proud to share that your Company has been recognized and duly awarded Certificate of Excellence for the year 2012 by its guests by TRIP ADVISOR, in world's most trusted travel advice portal .

A strong Guest Relations Management (GRM) initiative has been activated through personalized services, collection and analysis of guest information, effective communication and proper networking system. This will ensure that we retain as well as build upon current businesses and consolidate our market positions.

The optimism surrounding the Indian hospitality industry is not without challenge. The industry faces certain obstacles, which need to be overcome to realize its potential to the fullest.

Your Hotels communication campaign is through leading dailies, magazines, hoardings and social networking (Face book and Twitter) also. The management has taken active steps to promote the property with some effective marketing initiatives. We are launching some new services to add to the brand portfolio. Internal skill sets are being honed and developed for better utilization and implementation of available resources. With these efforts, we hope to maintain the profitability of your Company in the coming years.

Expansion Project

Your Company is progressing ahead in the expansion on project on adjoining land of existing hotel building. The profile of expansion project is as specified:

- Ball Room : 6500 sq.ft of pillar-less banqueting with around 3500 sq.ft of pre-function area. This would be the largest banqueting and conferencing facility available in the City.

- Board Room / Business Centre: Apart from the above mentioned hall there are 4 break away halls of more than 1000 sq.ft each with a state of art Board Room & Business Center.

- Specialty Restaurant/ Terrace Restaurant/ Grill Restaurant /Deli: The food & beverage would have a complete new look with the addition of specialty restaurant, one open terrace barbeque & grill restaurant & a Deli along with a sprawling wellness spa & swimming pool facility.

The Management is taking effective steps for completion of the project at stipulated time and within the budget.

Dividend

Your Directors are pleased to recommend a dividend © 8% i.e. Rs. 0.80 Per Equity Share of Rs. 10/- each for the financial year ended March 31*. 2012.

Directors

Mr. N D Shah, had been positioned as Non executive Director w.e.f. 1st March, 2012. Mr. N D Shah was an Executive Director of the company since 1995 till 29,h February, 2012 and had played an important role in nurturing and developing the Company.

Mr. J. G. Patel and Mr. M. P. Bakshi, Directors, who retires by rotation, are eligible for reappointment and have shown their willingness to be reappointed as Director.

Insurance

The Company has a broad-banded approach towards insurance. Adequate cover has been taken for all movable and immovable assets against numerous risks and hazards.

Statutory Disclosures

None of the Directors of your Company is disqualified as per the provisions of Section 274(1) (g) of the Companies Act, 1956. Your Directors have made the necessary disclosures, as required under various provisions of the Act and Clause 49 of the Listing Agreement.

The Company has no employee during the year covered under Section 217(2A) of the Companies Act, 1956.

The provision under Section 217(i) (e) of the Companies Act, 1956 are not applicable since the Company belongs to the hospitality industry. During the year under review, your Company earned foreign exchange equivalent to Rs. 2,20,68,770 (Previous year. Rs.67,80,977), whereas outflow of foreign exchange was equivalent to Rs.76,73,097 (Previous year Rs. 6,79,346).

Auditors

M/s. V. Shah & Associates, Chartered Accountants, Baroda, hold office as Auditors of the Company till the ensuing Annual General Meeting, and being eligible, offer themselves for reappointment. Members are requested to reappoint M/s. V. Shah & Associates, Chartered Accountants, Baroda, as Auditors of the Company for the current year, to hold office from the conclusion of ensuing Annual General Meeting until the conclusion of the next Annual General Meeting.

Corporate Governance

Pursuant to Clause 49 of the Listing Agreement with the Bombay Stock Exchange, Corporate Governance Report and Auditors' Certificate regarding compliance of conditions of Corporate Governance are made a part of the Annual Report.

Internal Control Systems & their adequacy

The Company has proper and adequate system of Internal Control Procedures to ensure that all transactions are authorized, recorded and reported correctly. This ensures prompt financial reporting, optimum utilization of various resources and immediate reporting of deviations. Compliance with laws and regulations is also ensured and confirmed and is checked by the Internal Auditor of the Company.

The reports of the Internal Auditor are reviewed in the meetings of the Audit Committee of the Board. The Audit Committee also reviews adequacy of internal controls, system and procedures, insurance coverage of assets from various risks and steps are taken to manage foreign currency transactions. The Audit Committee also interacts with Internal Auditors and Statutory Auditors of the Company to ensure compliance of various observations made during the conduct of audits and sufficiency of various controls.

Management of Human Resources

The strength of your Company lies in its team of competent and motivated personnel. This has made possible for your Company to make significant strides in all areas of its functioning.

The Company has also continued its endeavor to impart appropriate and relevant training to its employees at various levels with a view to equip them to take up the challenges that are ahead and to enhance their performance in the overall interest of the Company.HRD activities help tap and utilize the potential of team members and special incentives are provided to increase productivity and reward efficiency.

Our approach always amalgamates corporate goals and individual needs.

The Company arranges for "specialty", "safety/emergency handling" and "on the job" training.

By the end of March 2012, the Company had 161 permanent employees.

The Company is proud to possess an exceptional pool of skilled manpower, professionals and executives who are committed to deliver value and satisfaction all the time.

Listing of Securities

The Shares of the Company are listed with the Bombay Stock Exchange, Mumbai. The listing fees for Financial Year 2012-13 have already been paid. Directors Responsibility Statement Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956, your Directors confirm that:

(I) In the preparation of the Annual Accounts, the applicable accounting standards have been followed and that no material departures have been made from the same;

(ii) Appropriate accounting policies have been adopted and applied consistently and judgments and estimates made that are 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 of the Company for that period;

(iii) Proper and sufficient care has been taken 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 fraud and other irregularities;

(iv) The Annual Accounts have been prepared on a going concern basis.

Fixed Deposits

The Company has not invited deposit from public. However, the Company has accepted interest free deposits during the year under review from Directors, Shareholders and their relatives. The Company has complied with the provisions of Rule 10 of the Companies (Acceptance of Deposits) Rules, 1975 as well as the provisions of Section 58Aand 58AAof The Companies Act, 1956.

CORPORATE SOCIAL RESPONSIBILITY

The Company is associated with various charitable, social, religious and philanthropic activities and thereby playing a pro active role in the socio economic growth.

Acknowledgement

Your Directors wish to place on record their appreciation towards all associates including Customers, Banks, Financial Institutions, Shareholders and the society at large who have reposed their confidence in the Company.

The support of the Bankers, Central and State Government Officials, Solicitors, Advisors, and Business Associates need a special mention here. Without their unflinching support, this performance of the Company would not have been possible.

The Directors also wish to place on record their appreciation to the team of executives, staff and workers, who have shown immense dedication and efficiency in performing their duties.

Your Directors look forward to a long and fruitful association with all of them.

For JINDAL HOTELS LTD

Place : Vadodara P. D. Shah

Date : 17.07.2012 Managing Director


Mar 31, 2010

On behalf of the Board of Directors of your Company, I take pleasure in presenting the 25th Annual Report and Audited Statement of Accounts for the financial year ended 31st March, 2010.

Financial Performance

(Rs. In lakhs)

Particulars Year ended 31.03.2010 Year ended 31.03.2009

Turnover 1920.99 1805.71

Less: Expenditure 1389.58 1311.21

Profit before Depreciation, Interest and Taxation 531.41 494.50

Interest 106.72 98.73

Depreciation 138.10 130.12

Profit before Taxation 286.59 265.65

Provision for Income Tax / FBT / Def. Tax 99.42 108.29

Net Profit after Taxation 187.17 157.36

Profit Brought Forward 201.08 115.95

Income Tax of earlier years (3.63) (4.25)

Disposable Surplus 384.62 269.06

Transfer to General Reserve 35.00 35.00

Proposed Equity Dividend 28.65 28.19

Tax on Dividend 4.76 4.79

Balance Profit C/F 316.21 201.08



Review of Operations

During the year under review, your Company has done reasonably well, in spite of depressive market condition observed globally throughout the year. The turnover has registered growth at 6.38% as compared to previous year. Due to operational efficiency at every stage, sharp focus on marketing strategy and stringent internal cost control systems, the Company had19.87% higher profit as compared to the previous year. The bottom line margins have improved by prudent management measures.

Prospects & Concerns

The Current year has been challenging for the Indian hotel industry. This is due to a multiplicity of factors i.e US & Greece financial crisis, inflationary trend, swine flu pandemic, slow rate of GDP and fears of erratic and insufficient monsoons. India has emerged as one of the worldss leading as well as most robust and resilient economies. The country has coped successfully with the challenge of the recent economic and financial crisis as well as recession worldwide. The last two quarters of the year has witnessed a gradual recovery in the hospitality sector.

The slowdown in the tourism sector has had an cascading effect, showing a decrease in the room occupancy and average room rates. To combat the drop in revenue due to the global events, stringent cost control measures with no compromise in quality were implemented. The guest satisfaction scores at our hotel reflect that despite the measures, the quality of our hospitality services continues to be excellent. Credit for this goes to the positive experience at the newly furnished rooms as well as continual effort for better services offered to the guests.

The management has taken active steps to promote the property with some effective marketing initiatives. We are launching some new services to add to the brand portfolio. Internal skill sets are being honed and developed for better utilization and implementation of available resources. With these efforts, we hope to maintain the profitability of your Company in the times to come. However, increase in petroleum prices as well as their decontrol, and uncertainty of rain fall in various parts of country are the main concerns for Hotel Industry as a whole.

Expansion Project

The Company is progressing ahead in the expansion on project on adjoining land of existing hotel building.

The Company is at an advanced stage of negotiation with a leading National Chain of Hotels for a Branding and Marketing Tie-Up and is likely to finalize the agreement in the coming months. They have completed Techno Eco Feasibility Study and have submitted their GAP Documents. Now, the team of technical and financial experts as well as banker of the Company are appraising the revised expansion project. The Company will carry out desired changes in the profile of our incoming expansion project, as per their advice and requirements. The Management is taking effective steps to commence implementation of the project at an early date.

Issue of Warrants convertible into Equity Shares on Preferential Basis

The Board of Directors of the Company, in its meeting held on 1st July, 2009, allotted 24,76,540 Warrants of Rs. 20 each, convertible into Equity Shares of Rs.10/- each, at a premium of Rs.10/- per share on preferential basis. Out of which 11,75,540 Warrants were converted into Equity shares of Rs. 10/- each, at premium of Rs. 10/- per share on 16th March, 2010. In addition, the Company had already received Warrant Application Money of Rs. 65.05 lacs towards 13,01,000 warrants convertible into Equity Shares of the Company, having paid up value of Rs. 5/- per warrant. The proceeds of the issue of above shares have been utilized for the purpose of repayment of term loan and unsecured loans, augmentation of working capital, up gradation and modernization of plant / property of the Company. BSE has granted listing permission for the aforementioned converted shares.

Dividend

Your Directors, in consideration of the fund requirements for “New Hotel Project", have decided to recommend a dividend @ 8% i.e. Rs. 0.80 per Equity Share of Rs. 10/- each for the financial year ended March 31st, 2010, subject to approval of the shareholders at the Annual General Meeting. However on additional11,75,540 Equity shares allotted during the year under review, the Board recommended the same rate of dividend on pro rata basis i.e. Rs. 0.04 per Equity Share of Rs. 10/- each. Directors

On 20.07.2010, in the Meeting of Board of Directors, your Company had appointed Shri Mukund Bakshi, as an additional Director. Mr. Bakshi is a practising Chartered Accountant at Baroda and has a wide range of clientele. His forte is in the field of legal, finance and taxation matters. His association with the Company will prove beneficial in many respects. You are requested to give your accord for appointing him as a Director.

Shri A.C. Patel, Director, who retires by rotation, is eligible for reappointment and has shown his willingness to be reappointed as Director.

Insurance

The Company has a broad-banded approach towards insurance. Adequate cover has been taken for all movable and immovable assets against numerous risks and hazards.

Statutory Disclosures

None of the Directors of your Company is disqualified as per the provisions of Section 274(1) (g) of the Companies Act, 1956. Your

Directors have made the necessary disclosures, as required under various provisions of the Act and Clause 49 of the Listing

Agreement.

The Company has no employee during the year covered under Section 217(2A) of the Companies Act, 1956.

The provision under Section 217(i) (e) of the Companies Act, 1956 are not applicable since the Company belongs to the hospitality industry.

During the year under review, your Company earned foreign exchange of Rs. 100.86 lacs (Previous year Rs. 100.28 lacs), whereas outflow of foreign exchange was Rs. 17.80 lacs (Previous year Rs. 46.86 lacs).

Auditors

M/s. V. Shah & Associates, Chartered Accountants, Baroda, hold office as Auditors of the Company till the ensuing Annual General Meeting, and being eligible, offer themselves for reappointment. Members are requested to reappoint M/s. V. Shah & Associates, Chartered Accountants, Baroda, as Auditors of the Company for the current year, to hold office from the conclusion of ensuing Annual General Meeting until the conclusion of the next Annual General Meeting.

Corporate Governance

Pursuant to Clause 49 of the Listing Agreement with the Bombay Stock Exchange, Corporate Governance Report and Auditors Certificate regarding compliance of conditions of Corporate Governance are made a part of the Annual Report.

Internal Control Systems & their adequacy

The Company has proper and adequate system of Internal Control Procedures to ensure that all transactions are authorized, recorded and reported correctly. This ensures prompt financial reporting, optimum utilization of various resources and immediate reporting of deviations. Compliance with laws and regulations is also ensured and confirmed and is checked by the Internal Auditor of the Company.

The reports of the Internal Auditor are reviewed in the meetings of the Audit Committee of the Board. The Audit Committee also reviews adequacy of internal controls, system and procedures, insurance coverage of assets from various risks and steps are taken to manage foreign currency exposures. The Audit Committee also interacts with Internal Auditors and Statutory Auditors of the Company to ensure compliance of various observations made during the conduct of audits and sufficiency of various controls.

Management of Human Resources

The Company has always emphasized the importance of its employee relationships as a necessary factor for its success and future growth. Its human development initiatives ensure that employees are trained, motivated and involved at every level, so that they can act responsibly and contribute constructively. HRD activities help tap and utilize the potential of team members and special incentives are provided to increase productivity and reward efficiency.

The Company is committed to providing the opportunities to prepare our people with the skill sets they will require in the future. Our approach always amalgamates corporate goals and individual needs.

The Company arranges for “speciality", “safety/emergency handling" and on the job" training.

By the end of March 2010, the Company had 149 permanent employees.

The Company is proud to possess an exceptional pool of skilled manpower, professionals and executives who are committed to deliver value and satisfaction all the time.

Listing of Securities

The Shares of the Company are listed with the Bombay Stock Exchange, Mumbai. The listing fees for Financial Year 2010-11 have already been paid.

Directors Responsibility Statement

Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956, your Directors confirm that:

(I) In the preparation of the Annual Accounts, the applicable accounting standards have been followed and that no material departures have been made from the same;

(ii) Appropriate accounting policies have been selected and applied consistently and judgments and estimates made that are 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 of the Company for that period;

(iii) Proper and sufficient care has been taken 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 fraud and other irregularities;

(iv) The Annual Accounts have been prepared on a going concern basis.

Fixed Deposits

The Company has not invited deposit from public. However, the Company has accepted interest free deposits during the year under review from Directors and Shareholders. The Company has complied with the provisions of Rule 10 of the Companies (Acceptance of Deposits) Rules, 1975 as well as the provisions of Section 58A and 58AA of The Companies Act, 1956.

Acknowledgement

The Board of Directors acknowledges the cooperation and support received from Vendors, Traders, Customers, Banks, Financial Institutions, Shareholders and the society at large.

The support of the Bankers, Central and State Government Officials, Solicitors, Advisors, Business Associates and Members of

Jindal family need a special mention here. Without their unflinching support, this performance of the Company would not have been possible.

The Directors also wish to place on record their appreciation to the team of executives, staff and workers, who have shown immense dedication and efficiency in performing their duties.

Your Directors look forward to a long and fruitful association with all of them.

For JINDAL HOTELS LTD

Place : Vadodara P. D. Shah

Date : 20.07.2010 Managing Director

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