Boards Report & Management Discussion and Analysis
Your Directors are pleased to present the Thirty Second Annual Report on thebusiness and operations of your Company along with the audited accounts for the financialyear ended March 31st 2017.
Your Company continues in its quest for excellence by constant improvement of the guestexperience through better service levels and product upgrades. Your Directors believe thatthe Company should offer increasing value to all its stakeholders and society at large. Wehave maintained this with our tradition and policy of offering high quality content andservices. As stewards of the Company we will always share our vision of growth with you.
1. FINANCIAL HIGHLIGHTS
Your Companys financial performance for the year ended March 31 2017 is asbelow:
|Financial Performance ||Year ended 31.03.2017 ||Year ended 31.03.2016 |
|Turnover & Other Income ||363704658 ||361025841 |
|Less: Expenditure ||229467647 ||235472930 |
|Profit before Depreciation Interest and Taxation ||134237011 ||125552911 |
|Interest ||59939197 ||53706662 |
|Depreciation & Amortization ||61629797 ||43634604 |
|Profit before Taxation ||12668017 ||28211645 |
|Provision for Income Tax / Def. Tax ||10176018 ||11781210 |
|Net Profit after Taxation ||2491999 ||16430435 |
|Profit Brought Forward ||95165767 ||87512499 |
|Disposable Surplus ||97657766 ||103942934 |
|Depreciation pertaining to transitional period (net of tax) ||- ||- |
|Transfer to General Reserve ||- ||3000000 |
|Proposed Equity Dividend ||- ||4800000 |
|Tax on Dividend ||- ||977167 |
|Balance Profit C/f. ||97657766 ||95165767 |
2. REVIEW OF OPERATIONS
The tourism and hospitality sectors are intrinsically tied to the economic conditionsof any country. Over the short and medium terms the demonetization drive had variedeffects on the many sections of the hospitality industry in the country but in the longterm it may have positive impact on the growth of the hospitality sector. Often thestrong season for the hospitality sector in the country extends from October to Marchwhich to a large extent defines the success for the industry in any given year. The lackof available currency forced some hospitality customers to either postpone / cancel theirtravel and accommodation or to use hospitality products that easily allow the use of theother modes of payments. Also the restaurants business both in hotels andstandalone saw a short-term slowdown in growth on account of the reducedavailability of cash and the generally high usage of cash spending in restaurants. Theorganized banqueting business and the weddings business have dried up forcing thecancellation of many Indian weddings. The restaurants segment saw a higher impact onaccount of the discretionary nature of spending in this sector and the substantiallylarger base of cash transactions that occur in its when compared to mainstream businesshotels.
With banks being flush with liquidity we anticipate a major reduction in interestcosts which augurs well for the growth of the industry. As more liquidity enters theorganized sector along with some further softening of land rates and gradual movementtowards cleaner real estate transactions we anticipate investments into the sector toincrease from the organized players who have in the past shied away due complexitiesassociated with underlying real estate. The boost provided by the demonetization move tothe macro economy of the country will effectively trickle down to the industry.
The revenue growth in your Company was largely driven by the surge in food and beverageincome. The supply of premium rooms however has gone up as hospitality chains aregradually building up their room inventory on expectations of higher demand. The averageroom rates which drive revenue growth have increased negligibly because of competitionin the industry. Looking at the competitive scenario strategies are being constantlyformulated so as to enhance the Room sales business. The renovation refurbishment and upgradation of guest rooms supported by personalized service and provision of specialamenities for guest comfort have earned goodwill and guest loyalty. The Companyemphasizes the need for a sharp focus on marketing strategy as well as consistent saleseffort and this has contributed well to maintaining decent room occupancy and ARR. Ourinnovative food and beverage offerings also got their due recognition and patronage withsignificant increase in Restaurant Banquet and Outdoor Catering businesses. Due toefficiency at every stage of operation stringent internal cost control system and prudentmanagement measures the internal cash accruals has also improved considerably.
Hotel companies had been trying to put a lid on costs/expenses to protect theirprofitability. Hotel operators have also heightened their focus on the food and beveragesegment revenues of which have been consistently increasing and to attract a wide rangeof global tourists besides generating interest among domestic travelers.
Your Company continues to pursue expansion and inculcate innovatory skills to achievesustainable and profitable growth. Going forward sustaining the demand trend hinges onimproving corporate performance and economic activity in the country.
During the year under review your Company sustained to maintain stable turnover inadverse market conditions and registered minimal sales growth over previous year. Thesales and other income of Financial Year 2016-17 was recorded at Rs.3637.04 lacs (PYRs.3610.25 lacs). The industry has witnessed nearly same occupancy level and ARRs.RevPAR (Revenue per available Room) being plunged due tocompetition.
3. MANAGEMENT DISCUSSION & ANALYSIS REPORT
As part of business strategy and brand development the Company has entered into amanagement and marketing agreement with ACCOR group of hotels an international brand thatis compatible with the character and culture of our Company to increase our businessprospects building team and strengthen the marketing network. Collaboration or tie upwith an international brand will strengthen our brand equity as well as marketingnetwork.ACCOR a leading chain that is compatible with the character and culture of ourCompany. Accor is the worlds number-one and
Europes leading hotel operator (French hotel group part of the CAC 40 indexHeadquartered in Paris France). Its brand :Grand Mercure. has operated in the AsiaPacific region for almost twenty years establishing itself as a distinctive upscalecollection of hotels and apartment hotels in key business and resort locations around theregion. Each Grand Mercure hotel is anchored around Discover a new authenticwith the hotel connected closely to its local area through its design welcome andpartnerships. Grand Mercure (Mei Jue) is Accors purpose-designed Chinese adaption ofGrand Mercure. The brand is designed for travellers who enjoy having the familiarity of anupscale hotel brand that speaks and appeals to travellers and is complemented by thehospitality know-how distribution and reassurance of an international hotel group.
ACCORs strategy to achieve its stated goal i.e. become the worldwide hotelpacesetter is based on:
*Impactful marketing in particular to boost the economy hotel business.
*Powerful distribution spearheaded by the accorhotels.com portal (over 8.5 millionvisits a month).
*Value-creating asset management that improves the Groups business performanceoptimizes its financials and supports its growth.
*Development strategy that aims to consolidate the Groups leadership in Europetoday and step up its presence in emerging countries especially in Asia Pacific and LatinAmerica where Accor already has a strong presence.
*Clear compelling pledges for its employees.
*Reinventing hospitality sustainably to nurture smart responsible sustainablegrowth.
These global players have not only strong National but also International Sales andMarketing Set up. With growing number of hotels in each chain they are also able to tieup with many Airlines Credit Card Companies and offer attractive loyalty programmes forthe customers. The opening of the aviation industry in India has increased opportunitiesfor the Hotels in India and the entire hotel industry is expected to get better returns.Asthese International Hotel Chains have their Sales offices in all International Markets& major cities of India the Average Rate of Room Realisation is much higher than theAverage Rate of Room realised by the local/city based Sales offices. Their CentralReservation system and association with Global distribution system also yield highernumber of room reservations. Invariably all these chain hotels have their Annual Ratecontracts approved by most of the corporate houses which in turn becomes a major source ofregular and dependable business. Though as a standalone property Surya Palace Hotel isvery popular in Baroda particularly for its unmatched comfort and impeccable hospitalitystandards to its guests it has a limited access to National & International RoomReservation resources and also has negligible exposure to the major Business conferencesand seminars. The individual hotels fail to attract quality manpower as it offers littlegrowth potentials for aspiring professionals. Irrespective of their offering highsalaries the option for attracting quality management team is low.
The management is expecting that with the Brand Development i.e. GRAND MERCURE therewill be increment in room occupancy rate due to renovation refurbishment and up gradationof guest rooms supported by prevalent personalized service and provision of specialamenities for guest comfort.
Prospects & Concerns
The Indian tourism and hospitality industry has emerged as one of the key drivers ofgrowth among the services sector in India. Tourism in India has significant potentialconsidering the rich cultural and historical heritage variety in ecology terrains andplaces of natural beauty spread across the country. Tourism is also a potentially largeemployment generator besides being a significant source of foreign exchange for thecountry. India has moved up 13 positions to 52nd rank from 65th inTourism & Travel competitive index. Indias rising middle class and increasingdisposable incomes has continued to support the growth of domestic and outbound tourism.
As time rolls there is bound to be pressure with fluctuating market and increasingcompetition from formidable rivals. The telecom revolution coupled with the emergence ofthe hotel aggregation startups has changed the Indian travel industry. Booked throughonline room aggregator sites and marketed through the medium of Facebook posts and hotelreview sites. As per ICRA estimates one in every four hotel rooms in India is booked byonline means.
Further the Industry has observed that Room rentals have declined: Sales andmarketing are the biggest pain points for a property owner. The entry of the likes ofAirbnb has opened doors of vacant rooms inside houses of city dwellers to travellers.Townhouse is a hotel brand launched by Oyo to cater to the premium mid-market segment. Theonline disruption has changed the industry and changed the way Indian traveller books aroom. Of course the online aggregators also try and keep a check on the quality ofinventory through user reviews which is one of the first ways to check if anything is amiss in the property.
The Government of India on May 19 2017 announced a four-tier structure of 5 12 18and 28% for various categories in the hospitality industry. Under the pre-GST regime roomrevenues attract luxury taxes and service tax. After the announcement of GST rates withdifferent tax slabs across rates for hotel rooms the hospitality industry is hoping thegovernment will reconsider a single slab of 18 per cent to create a level playing fieldapart from giving a boost to tourism. One of the biggest hurdles for the Indianhospitality and tourism industry in terms of attracting international tourists is that ofnot having a competitive tax structure. There should be flat tax as room rates are dynamicand based on demand and the cost of real estate and labour cost varies across thecountry.
WORLD ECONOMIC OUTLOOK (WEO) UPDATE January 2017:After a lackluster outturn in 2016economic activity is projected to pick up pace in 2017 and 2018 especially in emergingmarket and developing economies. However there is a wide dispersion of possible outcomesaround the projections given uncertainty surrounding the policy stance of the incomingU.S. administration and its global ramifications. The outlook for advanced economies hasimproved for 201718 reflecting somewhat stronger activity in the second half of2016 as well as a projected fiscal stimulus in the United States.
In addition to the risks already mentioned underlying vulnerabilities remain amongsome other large emerging market economies. High corporate debt declining profitabilityweak bank balance sheets and thin policy buffers imply that these economies are stillexposed to tighter global financial conditions capital flow reversals and the balancesheet implications of sharp depreciations.
Geopolitical risks and a range of other non economic factors continue to weigh on theoutlook in various regionscivil war and domestic conflict in parts of the MiddleEast and Africa the tragic plight of refugees and migrants in neighboring countries andin Europe acts of terror worldwide the protracted effects of a drought in eastern andsouthern Africa and the spread of the Zika virus. If these factors intensify they woulddeepen the hardship in directly affected countries. Increased geopolitical tensions andterrorism could also take a large toll on global market sentiment and economic confidence.
The baseline forecast for the global economy points to a pickup in growth over the restof the forecast horizon from its subdued pace this year in the context of positivefinancial market sentiment especially in advanced economies. Nonetheless the potentialfor disappointments is high as underscored by repeated growth markdowns in recent years.Against this backdrop and given the diversity in cyclical positions and policy spacepriorities differ across individual economies.
The Indian economy is opening up its horizons as it continues to integrate with theworld economy. This has lead to the maneuvering of variety of jobs to the shores of Indiabringing in its wake transit travelers business travelers business meets and holidayseekers. Demand is likely to surge in the current year. We expect to have increase inmarket share with the ACCOR brand - several advantages because of its Central ReservationSystem (CRS).A strong Guest Relations Management (GRM) Le-Club Loyalty Programmeinitiative has been activated through personalized services collection and analysis ofguest information effective communication and proper networking system. This will ensurethat we retain as well as build upon current businesses and consolidate our marketpositions. Meetings Incentives Conventions and Events (MICE) is a new conceptwhich many hospitality companies are adapting to and there is an ample room forgrowth.Your Company continues in its quest for excellence by constant improvement of theguest experience through better service levels and product upgrades. A lot of credit forthese enhanced satisfaction levels goes to the positive experience at the newly furnishedrooms. The suites as well as renovated rooms have been very well received and were a keydifferentiator that facilitated in the hotel garnering high profile business fromcorporate leaders & renowned personalities from national & international platform.
Our main forte and focus has been the popularity of Food and beverages facilities. Theforay of Indian restaurants into a variety of global cuisines is having a positive impacton the F&B sector. Customers are more willing to experiment with different cuisinesbecause it is now easily accessible in the cities they live in and this trend hadincreased Indian consumers frequency of eating out.
We are indeed proud to share that your Company has been recognized and duly awardedCertificate of Excellence for the year 2017 by its guests by TRIP ADVISOR. in worldsmost trusted travel advice portal.
Your Hotels communication campaign is through leading dailies magazineshoardings and social networking (Facebook and Twitter) also. The management has takenactive steps to promote the property with some effective marketing initiatives. We arelaunching some new services to add to the brand portfolio. Internal skill sets are beinghoned and developed for better utilization and implementation of available resources. Withthese 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. Theindustry faces certain obstacles which need to be overcome to realize its potential tothe fullest.
Indias travel and tourism industry has huge growth potential. The tourismindustry is also looking forward to the expansion of E-visa scheme which is expected todouble the tourist inflow to India. India is projected to be the fastest growing nation inthe wellness tourism sector in the next five years according to a study conducted by SRIInternational. In view of the positive long-term outlook your Company remains committedto its delivery levels of service excellence and customer centricity. It is wellpositioned to sustain its leadership status in the Vadodara Market. Accor Hotels India hasadopted a born in France made in India approach to increase its properties inIndia which has reached a total of 45 hotels and is expected to increase to 55 hotels by2017.
Expansion & Renovation Project
During the FY 2016-17 the Company had completed the expansion project and Renovationof Rooms Project for existing Hotel Building.
The Indian government has realised the countrys potential in the tourism industryand has taken several steps to make India a global tourism hub.In the Union Budget2017-18 the Government of India announced some initiatives to give a boost to the tourismand hospitality sector such as setting up of five special tourism zones specialpilgrimage or tourism trains and worldwide launch of Incredible India campaign amongothers. The Central Government has taken a number of steps for smooth transitioning tocashless mode of payment to ensure that no hardship is faced by the tourists and thetourism industry remains unaffected from governments demonetisation move.
4. DIRECTORS AND KEY MANAGERIAL PERSONNEL
Mr. Nilesh Shah Director resigned on 18th March 2017 due to busy scheduleand other operational works. He is one of the Promoter Director of the Company. The Boardhas taken on record his valuable services and the Company is thankful to him for hisdedication and excellent services during the tenure.
Mr. Satvik Agrawal retires by rotation at the forthcoming Annual General Meeting andbeing eligible offer himself for re-appointment. The Directors recommend re-appointment ofMr. Satvik Agrawal as a Director on the Board.
In the 31st Annual General meeting held on 20th September 2016the Company had
*appointed Mr. Satvik Agrawal and Ms. Shagun Mehra as Directors on the Board of theCompany;
*appointed Ms. Shagun Mehra as whole time director and reappointed Mr. Piyush Shah asManaging Director for a term of three years w.e.f 1st August 2016 to July 312019;
The Board do not recommend to transfer any amount to General Reserves.
In view of considerable fund deployed in "Expansion & Renovation Project"your Directors recommend a dividend @ 8% i.e. Rs. 0.80 per Equity Share of Rs. 10/- eachfor the financial year ended 31st March 2017 subject to approval of theshareholders at the Annual General Meeting.
7. TRANSFER OF UNCLAIMED DIVIDEND AND SHARES TO INVESTOR EDUCATION ANDPROTECTION FUND
In terms of Section 125 of the Companies Act 2013 any unclaimed or unpaid Dividendfor the financial year ended March 31 2010 is due for remittance on 27thOctober 2017 to the Investor Education and Protection Fund established by the CentralGovernment.
Further Section 124(6) of the Companies Act 2013 read with Investor Education andProtection Fund Authority (Accounting Audit Transfer and Refund ) Rules 2016 amendedfrom time to time which inter alia requires the Company to transfer the equity shares onwhich the dividend has remained unpaid or unclaimed for a continuous period of sevenyears to a special demat account to be opened by Investor Education and Protection FundAuthority (IEPF Authority). The Company has intimated individually to all suchshareholders (for details refer point no. 5 (b) of Notice of AGM on Page No. 4).
8. SHARE CAPITAL
The paid up equity share capital as on 31st March 2017 was Rs.60000000/-. There was no public issue rights issue bonus issue or preferential issueetc. during the year. The Company has not issued shares with differential voting rightssweat equity shares nor has it granted any stock options.
9. MATERIAL CHANGES AND COMMITMENT IF ANY AFFECTING THE FINANCIAL POSITION OFTHE COMPANY OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THIS FINANCIALSTATEMENTS RELATE AND THE DATE OF THE REPORT
No material changes and commitments affecting the financial position of the Companyoccurred between the end of the financial year to which this financial statements relateon 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 Foreignexchange Earnings and outgo as required under Section 134 (3)(m) of the Companies Act2013 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 & particularlythe energy conservation be it electrical or gas consumption. We have installed necessarycapacitors in our electrical sub stations & VFD (Variable Frequency Drive)in most of the motors. All the halogens incandescent bulbs & even the PL tubes (Plugin light) are almost replaced with LED (Light Emitting Diodes). Theentire property has magnetic door locks which monitors the overall supply to individualguest rooms & thermostats controls are provided for guest comfort & energy saving.All the glass window are replaced with Double Glace DGU & fixedsunscreen protection are laid on them.The new magnetic chillers used for air conditioningprocess have proved to be major savers.
Besides these the hotel teams continued their efforts to explore opportunities toreduce 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;
Zero Flush Urinals installed in Banquet Halls (Save Water Save Energy)
Every Quarter we have a trend of celebrating Energy Saving Weekwherein entire team is motivated not only to save energy but also to contribute theirideas for energy conservation.
In the Opinion of the Board the required particulars pertaining to technologyabsorption 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. 14151135/-(PY Rs. 12030229/-) whereas outflow of foreign exchange was Rs.7876885/- (PY Rs.10111482/-)
11. STATEMENT CONCERNING DEVELOPMENT AND IMPLEMENTATION OF RISK MANAGEMENT POLICY OFTHE COMPANY
The Company has been taking proactive approach concerning the development andimplementation of a Risk Management Policy after identifying the following elements ofrisks which in the opinion of the Board may threaten the very existence of the Companyitself.
(a) financial;(b) legal and regulatory;(c) operating; and(d) commercial risksincluding health safety and environment.
The Company does not have any Risk Management Committee as the Board takes intoconsideration all the risk factors at regular intervals at its meetings.
The Company has a broad-banded approach towards insurance. Adequate cover has beentaken for all movable and immovable assets against numerous risks and hazards.
13. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTIONPROHIBITION AND REDRESSAL) ACT 2013.
The Company has zero tolerance for the Sexual Harassment of Women at Workplace. TheCompany has adopted an Anti-harassment Policy in line with the requirements of the SexualHarassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013.Internal Complaint Committee are set up to redress complaints received regularly and aremonitored by women line supervisors who directly report to the Chairman & ManagingDirector. All female employees are covered under the policy. There was no complaintreceived from any employee during the financial year 2016-17 and hence no complaint isoutstanding as on March 31 2017 for redressal.
14. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THECOMPANIES ACT 2013
There was no loans guarantees or investments made by the Company under Section 186 ofthe Companies Act 2013 during the year under review and hence the said provision is notapplicable.
15. DETAILS OF SIGNIFICANT & MUTUAL ORDERS PASSED BY THE REGULATORS OR COURTS
There are no significant material orders passed by the Regulators / Courts which wouldimpact the going concern status of the Company and its future operations.
16. COMPANYS POLICY RELATING TO DIRECTORS APPOINTMENT PAYMENT OF REMUNERATIONAND DISCHARGE OF THEIR DUTIES
The provisions of Section 178(1) relating to constitution of Nomination andRemuneration Committee are applicable to the Company and hence the Company has devisedpolicy relating to appointment of Directors payment of Managerial remuneration Directorsqualifications positive attributes independence of Directors and other related mattersas provided under Section 178(3) of the Companies Act 2013 and for details refer linkwww.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 intoconsideration the various aspects of the Boards functioning composition of theBoard and its committees. The Board has carried out an annual performance evaluation ofits own performance the directors individually as well as the evaluation of the workingof its Committees.
18. STATUTORY AUDITORS
M/s V Shah & Associates Chartered Accountants Baroda were appointed as StatutoryAuditors for a period of 3 years in the 29th Annual General Meeting held on 9thSeptember 2014. Pursuant to applicability of Companies Act 2013 the Company had tochange the auditors. Therefore the Company has received a certificate from the Modi &Joshi Chartered Accountant Vadodara to the effect that if members appoint them asauditors of the Company for five years it would be in accordance with the provisions ofSection 141 of the Companies Act 2013.
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 hasappointed Mr. Kashyap Shah a Company Secretary in practiceto undertake the SecretarialAudit of the Company. The Secretarial Audit Reportis furnished in Annexure 1 (Form No.MR-3).
20. EXPLANATION OR COMMENTS ON QUALIFICATIONS RESERVATIONS OR ADVERSE REMARKS ORDISCLAIMERS 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 theAuditors 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 92read with Rule 12 of the Companies (Management and administration) Rules 2014 isfurnished in Annexure 2 (Form No. MGT- 9) and is attached to this Report.
22. DISCLOSURE UNDER RULE- 5 OF THE COMPANIES (APPOINTMENT AND REMUNERATOIN) RULES2014
Disclosure required under Section 197 of the Companies Act 2013 read with Rule-5 ofthe 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 ofthe Companies Act 2013 during the year under review is furnished in Annexure 4 (AOC -2)and is attached to this report. All the RPT are held at arms length price and in OrdinaryCourse of Business and hence approval under Section 188 is not required.
24. CORPORATE GOVERNANCE CERTIFICATE
The Compliance certificate from Practicing Company Secretaries regarding compliance ofconditions of corporate governance as stipulated in Schedule V of the SecuritiesExchange Board of India (Listing Obligation Disclosure Requirement) Regulation 2015 isannexed as Annexure 5 to the report.
25. NUMBER OF BOARD MEETINGS CONDUCTED DURING THE YEAR UNDER REVIEW
The Company had six Board meetings during the financial year under review on17.05.2016; 02.08.2016; 20.09.2016 25.10.2016; 07.02.2017; & 18.03.2017.
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 documentedprocedures covering all corporate functions and hotel operating unit to ensure that alltransactions are authorized recorded and reported correctly. This ensures promptfinancial reporting optimum utilization of various resources and immediate reporting ofdeviations. Compliance with laws and regulations is also ensured and confirmed and ischecked by the Internal Auditor of the Company.
The reports of the Internal Auditor are reviewed by the Audit Committee. The AuditCommittee also reviews adequacy of internal controls system and procedures insurancecoverage of assets from various risks and steps are taken to manage foreign currencyexposures. The Audit Committee also interacts with Internal Auditors and StatutoryAuditors of the Company to ensure compliance of various observations made during theconduct of audits and adequacy of various controls.
The Company has not invited deposit from members or public. Inter corporate depositsreceived from corporate as unsecured loans (for details refer Annexure-4 Form AOC-2).
The corporate website www.suryapalace.com reflecting the new architecture is far moreexperimental with large images showcasing the property and its facilities enhancedcontent both in quantity and quality with in depth information on experiences servicesand facilities. The website also displays financial & corporate information.
30. DECLARATION OF INDEPENDENT DIRECTORS
The Independent Directors have submitted their disclosures to the Board that theyfulfill all the re-quirements as stipulated in Section 149(6) of the Companies Act 2013so as to qualify themselves to be appointed as Independent Directors under the provisionsof 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 IndependentDirector) c. Ms. Chanda Shah (Non executive Director) d. Mr. Mukund Bakshi (Non executiveIndependent Director)
The above composition of the Audit Committee consists of independent Directors who formthe majority. The Company has established a vigil mechanism and overseas through thecommittee the genuine concerns expressed by the employees and other Directors. TheCompany has also provided adequate safeguards against victimization of employees andDirectors who express their concerns. The Company has also provided direct access to theChairman of the Audit Committee on reporting issues concerning the interests of coemployees and the Company.
32. DIRECTORS RESPONSIBILITY STATEMENT
In accordance with the provisions of Section 134(5) of the Companies Act 2013 theBoard hereby submit its responsibility Statement:-(a) in the preparation of the annualaccounts the applicable accounting standards had been followed along with properexplanation relating to material departures; (b) the directors had selected suchaccounting policies and applied them consistently and made judgments and estimates thatare reasonable and prudent so as to give a true and fair view of the state of affairs ofthe company at the end of the financial year and of the profit and loss of the company forthat period; (c) the directors had taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of this Act for safeguardingthe 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) thedirectors had laid down internal financial controls to be followed by the company and thatsuch internal financial controls are adequate and were operating effectively. Internalfinancial control means the policies and procedures adopted by the Company for ensuringthe orderly and efficient conduct of its business including adherence to Companyspolicies the safeguarding of its assets the prevention and detection of frauds anderrors the accuracy and completeness of the accounting records and the timely preparationof reliable financial information.
(f) the directors had devised proper systems to ensure compliance with the provisionsof 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 auditors to theAudit Committee or the Board under section 143(12) of the Companies Act 2013.
34. SECRETARIAL STANDARDS OF ICSI
Pursuant to the approval given on 10 April 2015 by the Central Government to theSecretarial Standards specified by the Institute of Company Secretaries of India theSecretarial Standardson Meetings of the Board of Directors (SS-1) and General Meetings(SS-2) came into effect from 1 July 2015. 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 toreport concerns about unethical behavior actual or suspected fraud or violation of theCompanys code of conduct and ethics. The Company has a "Whistle BlowerPolicy" the copy of which is available on the website of the Company namelywww.suryapalace.com.
36. SAFETY & ENVIRONMENT
The Company is committed to providing a safe and healthy working environment andachieving an injury and illness free work place.
37. RELATED PARTY TRANSACTIONS
During the year ended 31st March 2017 the Company has not entered into anycontract or arrangement with its related parties which is not on arms length basis.The details in Form No. AOC-2 of a material transaction entered into by the Company andits related party are provided under Annexure-4 to this Report.
Your Companys Policy on Related Party Transactions as adopted by your Board canbe accessed on the Companys website at www.suryapalace.com
Your Directors would like to express its sincere appreciation and gratitude to theCompanys valued stakeholders including Members customers Bankers vendorsbusiness partners the Government of India for their continued co-operation and support.
Directors also place on record sincere appreciation of the commitment and enthusiasm ofall its employees.
An acknowledgement to all with whose help cooperation and hard work the Company isable to achieve the results.
|Place : Vadodara ||For and on behalf of the Board of Directors |
|Date : 23rd May 2017 ||Ambalal Patel |
|Signed as per Board resolution passed on 23rd May 2017 ||Chairman |