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Sayaji Hotels Ltd.

BSE: 523710 Sector: Services
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Sayaji Hotels Ltd. (SAYAJIHOTL) - Director Report

Company director report



Your Directors take pleasure in presenting the 33rd Annual Report together with theStandalone and Consolidated audited financial statements for the year ended March 312016.The Management Discussion &Analysis has also been incorporated into this report.


During the year under review on a standalone basis there is an increase of 19.02% inthe revenue of the Company (increased to Rs 16272.29 Lakh from Rs.13671.72 Lakhs in theprevious year). Operating profit % to the sale is also improved (21.12% for current yearand 20.48% for previous year). Loss before exceptional item decreased due to higheroperating profits. Exceptional income includes profit on sale of restaurant businesslocated at Pune hotel of the company.



Stand Alone (Rs. in Lacs)

Financial Year 2015-16 Financial Year 2014-15
Income 16272.29 13671.72
Less: Operating Expenses 12835.16 10870.65
Operating Profit 3437.13 2801.07
Less: Finance Cost 1209.27 1168.27
Profit before Depreciation 2227.86 1632.80
Less: Depreciation 2311.20 2040.60
Add: Depreciation written back 0.03 0.00
Profit/(Loss) before exceptional items (83.31) (407.80)
Exception Item 1146.85 0.00
Profit Before Tax (PBT) 1063.54 (407.80)
Less: Tax Expenses
Current Tax 503.29 220.30
Deferred Tax (470.66) (261.05)
Earlier Years' Tax 50.34 (102.02)
Profit After Tax (PAT) 980.57 (265.03)
EPS (Equity Shares of Rs.10/- each)
Basic 4.92 (1.67)
Diluted 4.92 (1.67)


Looking to the future expansion/renovation plans of the Company your directors are notrecommending dividend to the equity shareholders for financial year 2015-16.


The paid up Equity Share Capital as on 31 st March 2016 was Rs. 2751.80 Lacs. Duringthe year Company has allotted 83338 10% cumulative redeemable preference shares ofRs.100/- each to the directors/promoters/promoter's relative of the Company atpremium of Rs. 50/- per shares on preferential basis. The Company has not issued shareswith differential voting rights neither granted stock options nor sweat equity.

The Company's equity shares are listed with the BSE Ltd.


Cash and cash equivalent as at 31st March 2016 was Rs. 588.15 Lacs. The Companycontinues to focus on judicious management of its working capital receivablesinventories and other working capital parameters were kept under strict check throughcontinuous monitoring.


The Company during the year has not accepted deposit from the public falling within theambit of Section 73 of the Companies Act 2013 read with the Companies (Acceptance ofDeposits) Rules 2014and there were no remaining unclaimed or unpaid deposits as on 31stMarch 2016. Further the Company has not accepted any amount as deposit in contraventionof the provisions of the Companies Act 2013 and the rules made thereunder.


During the year under review the Company has made following investments pursuant toSection 186 of the Companies Act 2013:

Name of the entity Relation Amount (Rupees in Crore) Particulars of investments Purpose for which the investment are proposed to be utilized
Sayaji Housekeeping Services Ltd. Wholly Owned Subsidiary 637.50 Investment into Shares For providing financial assistance for setting up the business

For further details please refer to the relevant notes to the attached financialstatements.

5.3 Amount propose to be transferred to the reserves

During the year under review Rs. 980.57 Lacs are proposed to be transferred to thegeneral reserves.



> Indore

Your Director proud to announce that during the year your Company's Indore hotelhas obtained 5 STAR RATING. In order to maintain its status your Company has also renewedsome of the floors of the Indore hotel. Renovation plan of one more floor and few largebanquet halls are also in pipe line for the current financial year.

> Amber Convention Centre

Company's ambitious project named as Amber Convention Centre is alsounder progress and will be launched fully during the coming year. . This will be one ofthe biggest convention center of the city having capacity of approx 2000 people.

> Barbeque-Nation Restaurants

Barbeque-Nation Hospitality Ltd. is operating 71 restaurants across the country andplanning to start 20 more restaurants within the current financial year. Company is alsocoming with its first overseas restaurant at Dubai.

> Malwa Hospitality Pvt. Ltd.

During the year under review the Effotel hotel at Indore operated by yourCompany's subsidiary M/s Malwa Hospitality Pvt Ltd. has also obtained 4 STAR RATING.The Effotel has generated revenue of Rs. 1962.48 Lacs and operating profit of Rs. 413.14Lacs during the year under review and the average occupancy for the year was 65%.

Your Company has aggressive plans to take hotels in various cities and to run the sameon management contract basis. It will help your company to increase its business reach.

Changing Environment- Leading To Growth Of Hotel Industry

 Travel & Tourism's direct contribution to world gross domestic product(GDP) and employment in 2015 was US$2.2 trillion (2015 prices) and 108 million jobsrespectively.

 Taking its wider impacts including indirect and induced contributions intoaccount Travel & Tourism's total contribution to the global economy in 2015 wasUS$7.2 trillion (2015 prices) which equates to 9.8% of total GDP. In terms of employmentin 2015 the Travel & Tourism sector supported 284 million jobs or 1 in 11 of all jobsinthe world.

 2.5 million new jobs were generated directly in the sector in 2015 taking thenumber of direct jobs to 108 million. In total

7.2 million new jobs were created as a result of direct indirect and induced activity.

 The total contribution of Travel & Tourism to employment grew by 2.6% in2015 while the total GDP contribution grew by 3.1 % - faster than wider economic growth(2.3%) for the fifth consecutive year.

 In GDP growth terms the Travel & Tourism sector outperformed several othermajor economic sectors in 2015 including manufacturing and retail. In employment growthterms the Travel & Tourism sector outperformed various other select industries in2015 including the financial services education and health care sectors.

 At a country level direct Travel & Tourism GDP growth outpaced economy-wideGDP growth in 127 of the 184 countries covered by the annual Economic Impact Research in2015. Examples of economies where Travel & Tourism most markedly outperformed thewider economy in 2015 included Iceland Japan Mexico New Zealand Qatar Saudi ArabiaThailand and Uganda.

 The sustained demand for Travel & Tourism coupled with the sector'sability to consistently outperform the wider global economy and be resilient in the faceof shocks continues to underline its great significance and value as a key sector foreconomic development and job creation throughout the world.

Some Statistical data are represented below:-


> Tourism in India accounts for 7.5 per cent of the GDP and is the third largestforeign exchange earner for the country

> The tourism and hospitality sector's direct contribution to GDP is USD42.8billion in 2015

> The direct contribution of travel and tourism to GDP is expected to grow 7.2 percent per annum from 2015-25 to USD85.6 billion



7.1 Market Overview

 The number of Foreign Tourist Arrivals (FTAs) has grown steadily in the lastthree years reaching around 7.103 million during January-November 2015 (4.5 per centgrowth).

 The number of FTAs in November 2015 was 815000 registering an increase of 6.5per cent over November 2014.

 Foreign Exchange Earnings (FEEs) from tourism during January-November 2015 wereRs 112958 crore (US$16.94 billion) registering a growth of 1 per cent over the sameperiod of last year.

 The number of tourists arriving on e-Tourist Visa during the month of October2015 reached a total of 56477 registering a growth of 1987.9 per cent or 21 times ascompared to 2705 tourists in October 2014.

 Online hotel bookings in India is continuously rising and are expected to doubleby 2016 due to the increasing penetration of the internet and smart phones.


7.2 Continued Growth in Investment in Tourism Sector

The tourism & hospitality sector is among the top 15 sectors in India to attractthe highest Foreign Direct Investment (FDI). During the period April 2000 to September2015 the hotel and tourism sector attracted around US$ 8.48 billion of FDI according tothe data released by Department of Industrial Policy and Promotion (DIPP).

With the rise in the number of global tourists and realizing India's potentialmany companies have invested in the tourism and hospitality sector. Some of the recentinvestments in this sector are as follows:

 Fairfax-owned Thomas Cook has acquired Swiss tour operator Kuoni Group'sbusiness in India and Hong Kong for about Rs 535 crore (US$ 80.3 million) in order toscale up inbound tour business

 US-based Vantage Hospitality Group has signed a franchise agreement withIndia-based Miraya Hotel Management to establish its mid-market brands in the country.

 Thai firm Onyx Hospitality and Kingsbridge India hotel asset management firmhave set up a joint venture (JV) to open seven hotels in the country by 2018 for which theJV will raise US$ 100 million.

 ITC is planning to invest about Rs 9000 crore (US$ 1.35 billion) in the nextthree to four years to expand its hotel portfolio to 150 hotels. ITC will launch fiveother hotels - in Mahabalipuram Kolkata Ahmedabad Hyderabad and Colombo - by 2018.

 Goldman Sachs New-York based multinational investment banking fund hasinvested Rs 255 crore (US$ 38.3 million) in Vatika Hotels.

Capital investments in the tourism sector (USD billion)

 Capital investment in the tourism and hospitality sector has been risingconsistently

 Investments are expected to increase at a CAGR of 8.6 per cent during 2009-25F

 By 2025 investments are expected to increase to USD125.9 billion

Collective government spending on tourism (USD billion)

 The government's collective spending on the tourism and hospitality sectoris estimated to be USD2.4 billion in 2015

 Collective government spending on tourism is expected to grow at a CAGR of 9.1per cent from 2008-15

 By 2025F the government's collective spending is expected to increase toUSD7.0 billion

7.4 Advantage to Hotel Industries in India:-

Robust demand

 Foreign tourist arrivals expected to increase at a CAGR of 7 per cent over2005-25

 India registered 7.1 million foreign tourist arrivals in 2015 (January toNovember) registering an annual growth of 5.4 per cent overthepreviousyear

Attractive opportunities

 India has a diverse portfolio of niche tourism products - cruises adventuremedical wellness sports MICE ecotourismfilm rural and religious tourism

 India is expected to receive nearly half a million medical tourists by 2015implying an annual growth of 30 percent.

Diverse attractions

 India offers geographical diversity attractive beaches 30 World Heritage Sitesand 25 biogeographic zones

 The country's big coastline is dotted with a number of attractive beaches.

Policy support

 The Visa on Arrival scheme was extended to 150 countries in 2015

 A five-year tax holiday has been offered for 23 and 4 star category hotelslocated around UNESCO World Heritage sites (except Delhi and Mumbai)


RURAL TOURISM The aim is to develop interest in heritage and culture; and promote visits to village settings to experience and live a relaxed and healthy lifestyle
ADVENTURE TOURISM  A wide range of adventure sports are covered under this category with specialised packages
 The activities include mountaineering trekking bungee jumping mountain biking river rafting and rockclimbing
LUXURY TOURISM The luxury travel market is projected to reach USD14.7 billion in 2015 and it was pegged to grow at 25 per cent on a year - on - year basis between 2013 and 2015
Tourists seek specialized medical treatments mainly ayurvedic spa and other therapies
MEDICAL TOURISM  The primary purpose is achieving promoting or maintaining good health and a sense of well-being


> Revenues from leisure travel constitute over 83 per cent of total tourism revenuesin India

> Revenues from leisure travel totaled USD95.95 billion in 2015 and are estimated toreach USD153.72 billion by 2025

> Business travel revenues stood at USD19.09 billion in 2015 and are projected toreach over USD41.4 billion by 2025


We always desired to work in a safe and healthy environment the major component ofwhich is equality. That's why at Sayaji we have constituted an internal complaintcommittee to provide protection against sexual harassment of the women at the work placeand for prevention and redressal of the complaints of sexual harassment.

The Committee is constituted as per the Sexual Harassment of Woman at Workplace(Prevention Prohibition And Redressal) Act 2013.


As the average net profit of the Company for last 3 years is negative hence there is noliability on the Company to incur expenditure on CSR activities as prescribed u/s 135 andschedule VII of the Companies Act 2013. Ever so the Company has constituted the CSRCommittee of the Board and the CSR Policy has also been approved by the Board and placedon the Company's website at

As the Company is not coming under the purview of Section 135 of the Companies Act2013 hence is not required to provide particulars of CSR.


10.1 Industry Risk

 General economic conditions

The hospitality industry is prone to impacts due to fluctuations in the economy causedby changes in global and domestic economies changes in local market conditions excesshotel room supply reduced international or local demand for hotel rooms and associatedservices competition in the industry government policies and regulations fluctuationsin interest rates and foreign exchange rates and other social factors. Since demand forhotels is affected by world economic growth a global recession could also lead to adownturn in the hotel industry.

 Socio-political risks

In addition to economic risks your Company faces risks from the socio-politicalenvironment internationally as well as within the country and is affected by events likepolitical instability conflict between nations threat of terrorist activitiesoccurrence of infectious diseases extreme weather conditions and natural calamities etc.which may affect the level of travel and business activity.

 Competition from Global Hotel Chains

The Indian subcontinent South East Asia and Asia Pacific with high growth rates havebecome the focus area of major global hotel chains. Several of these chains have announcedtheir plans to establish hotels to take advantage of the demand supply imbalance. Theseentrants are expected to intensify the competitive environment. The success of our Groupwill be dependent upon its ability to compete in areas such as quality of accommodationbrand recognition service level convenience of location the quality and scope of otheramenities including food and beverage facilities.

 Increased outbound travel

Recent competitiveness in international airfares and strengthening financial health ofIndian people resulted in destinations like Europe South East Asia and Australia becomingmore affordable to the average Indian travelers. This has increased outbound travel andpresents a risk to the domestic segment for leisure tourism.

10.2 Risk mitigation initiatives

Our Company employs various policies and methods to counter these risks effectively asenumerated below:

 Your Company has implemented various security measures at all its propertieswhich inter alia include screening of guest's luggage installation of metaldetectors etc. to counterthe security risk.

 By extensively improving its service standards as also progressively renovatingits properties across the multi brand portfolio your Company counters the risk fromgrowing competition and new supply. Further it gains operating and financial leverage byexpansion through management contracts and leveraging the strengths of its Associates.

 By removing obsolete technology and adopting modern methodology we endeavor tocontrol the cost of services provided by the Company.

 To attract the customers in lean period by providing attractive packages.

 Aggressive marketing through various offline and online mediums.

10.3 Policies that deal with Risk Management

 The Company has in place a mechanism to identify assess monitor and mitigatevarious risks to key business objectives. Major risks identified by the businesses andfunctions are systematically addressed through mitigating actions on a continuing basis.These are discussed at the meetings of the Audit Committee and the Board of Directors ofthe Company.

 The Company has an Internal Control System commensurate with the size scaleand complexity of its operations. To maintain its objectivity and independence theInternal Audit function reports to the Chairman of the Audit Committee of the Board.

 The Internal Audit Department monitors and evaluates the efficacy and adequacyof internal control system in the Company its compliance with operating systemsaccounting procedures and policies at all locations of the Company and its subsidiaries.Based on the report of internal audit function process owners undertake corrective actionin their respective areas and thereby strengthen the controls. Significant auditobservations and corrective actions thereon are presented to the Audit Committee of theBoard.

 The Company has a vigil mechanism named Whistle Blower/Vigil MechanismPolicy to deal with instance of fraud and mismanagement if any.

 The details of the Whistle Blower/Vigil Mechanism Policy is explained in theCorporate Governance Report and also posted on the website of the Company.


As in the Hotel Industry is based on serving human to human hence it becomesimperative to have the people who possess adequate knowledge skills and qualities so thatthe firms can succeed and grow not only within domestic boundaries but also in thenational arena. The Company continues to maintain a very cordial and healthy relationshipwith its work force across all its units. The total number of permanent employees on rollas at March 312016 was 2136 across all its units.

With the increase in workforce due to expansion in business envisage the requirementof adequate on-the-job training across the various levels of employees a major thrust tothe training and development of multi skilled certification programmes has been providedto the Trainees.

A dynamic and transparent performance appraisal system that is KPI Score techniquewhich imparts various positive initiatives towards employee welfare requirements ensuredmaintaining the employees' morale at greater heights.


Providing and supporting a safe and secure environment for our guests employees andthose working at or otherwise visiting our hotels and corporate offices is of paramountimportance and therefore Sayaji applies high standards of health and safety across theGroup. We ensure the protection and well-being of those working for Sayaji throughsuitable work-based strategies enumerated below:-

> minimize the risk of injury from work activity;

> ensure that sufficient information and systems are in place to address health andsafety concerns;

> involve employees in the continuous improvement

> Reporting and review of health and safety matters.

Recognizing the importance of operating safe hotels our commitment to safety securityand crisis management in hotels is a fundamental part of being a responsible business. Wetherefore require hotels to comply with a set of global Brand Safety Standards. We alsosupport hotel owners General Managers and hotel employees to manage risk effectively bygiving them a systematic approach and framework to follow and providing them withuser-friendly tools and training.

Hotels are assessed by various methods including self- assessment guest satisfactionsurveys design and engineering plans incidents intelligence gathering quality auditsand risk management reviews. Hotel management teams discuss issues periodically anddevelop action plans where risks are prioritized responsibilities assigned andimprovement actions identified progressed and monitored. Action plans are reviewed asnecessary by appropriate people to escalate and drive action or develop common solutions.


As on 31stMarch 2016 the Company had 3 subsidiaries and 1 Associate Company. Duringthe year Sayaji has incorporated a wholly owned Subsidiary named as Sayaji HousekeepingServices Limited accordingly the number of subsidiaries of the Companies has increasedfrom 2 to 3 during the year under review. There was no change in the nature of business ofthe subsidiaries.

In accordance with Section 129(3) of the Companies Act 2013 the Company has prepareda consolidated financial statement of the Company and all its subsidiary and Associatecompanies which is forming part of the Annual Report. A statement containing salientfeatures of the financial statements of the subsidiary/associate companies is alsoincluded in the Annual Report.

In accordance with third proviso of Section 136(1) of the Companies Act 2013 theAnnual Report of the Company containing therein its standalone and the consolidatedfinancial statements has been placed on the website of the Company

Further as per fourth proviso of the said section audited annual accounts of each ofthe subsidiary companies have also been placed on the website of the Company Shareholders interested inobtaining a copy of the audited annual accounts of the subsidiary companies may write tothe Company Secretary at the Company's Registered Office or e-mail to


The Board of directors of the Company is duly constituted and Company is having total 7directors in the Board out of that 2 are Independent since the Chairman of the Company isIndependent director the Company needs to have atleast 1/3 of the total number ofdirectors as per the requirement of the Companies Act 2013 and the SEBI (LODR)Regulations 2015 however presently Company has only 2 independent director. Company islooking for a suitable person to be appointed as Independent Director and will comply therequirement shortly.

14.1 Changes in the composition of Board of directors

During the year Madhya Pradesh Financial Corporation has withdrawal the nomination ofMr. Y.S. Mehta (DIN 00418859) from the Board of the Company w.e.f. 08th Dec. 2015 (sincethe entire loan amount of corporation has been repaid by the Company). Mr. Vinit Shah(DIN 00118610) resigned from the Board on 19th December 2015. The designation of Mr. RaoofDhanani (DIN 00174654) has been changed to Managing Director of the Company w.e.f. 05thNovember 2015.

Except above there wereno changes done in the constitution of the board.

14.2 Independent Directors

The Company has received the necessary declaration from Independent Directors that isMr. T. N. Unni and Mr. Pradeep Goyal in accordance with Section 149(7) of the CompaniesAct 2013 that they meets the criteria of independence as laid out in sub-section (6) ofSection 149 of the Companies Act 2013 and Regulation 16(1)(b) of the SEBI (LODR)Regulations 2015 and the Board of directors are satisfied that all the independentdirectors of the Company fulfill the criteria of the Companies Act 2013 and the SEBI(LODR) Regulations 2015.

14.3 Retirement by rotation-

In accordance with the provisions of Section 152(6) of the Companies Act 2013and interms of Articles of Association of the Company Mrs.Suchitra Dhanani (DIN 00712187) isliable to retire by rotation at the ensuing Annual General Meeting and being eligibleoffer herself for re-appointment. The Board recommends her appointment.

14.4 Changes in other Key Managerial Personnel

During the Year Mr. Raoof Razak Dhanani has been designated as KMP w.e.f 5th Nov. 2015.Except this there were no changes done in the position of KMP.

14.5 Number of meetings of the Board

The Board met six times during the year at regular intervals to discuss and decide onCompany/business policy and strategy apart from other Board business however in case ofa special and urgent business need the Board's approval is taken by passingresolutions through circulation as permitted by law which are confirmed in thesubsequent Board meetings.

The notice of Board meeting is given well in advance to all the Directors. The detailedAgenda of the Board/Committee meetings circulated at least a week prior to the date of therespective meetings. The Agenda for the Board and Committee meetings includes detailednotes on the items to be discussed at the meeting to enable the Directors to take aninformed decision.

The details of all the Board Meetings are given in the Corporate Governance Report thatforms part of this Annual Report. The intervening gap between the Meetings was within theperiod prescribed under the Companies Act 2013 and the SEBI (LODR) Regulations 2015.

14.6 Familiarization Programme for Independent Directors

The Company has put in place a programme to familiarize the Independent Directors withthe Company their roles rights responsibilities in the Company nature of the industryin which the Company operates business model of the Company etc. The details of thefamiliarization programme are disclosed at the website of the Company at

14.7 Selection of New Directors and Board Membership Criteria

The Nomination and Remuneration Committee works with the Board to determine theappropriate characteristics skills and experience for the Board as a whole and itsindividual members with the objective of having a Board with diverse backgrounds andexperience in business government education and public service. Characteristics expectedof all Directors include independence integrity high personal and professional ethicssound business judgment ability to participate constructively in deliberations andwillingness to exercise authority in a collective manner. The Nomination andRemuneration Policy for appointment and removal of Directors and determiningDirectors' independence which forms part of the Annual Report and also placed at thewebsite of the Company at

14.8 Annual evaluation of the Board

The Board evaluated the effectiveness of its functioning and that of the Committees andof individual directors by seeking their inputs on various aspects of Board/CommitteeGovernance.

The aspects covered in the evaluation includes:-

i. Contribution to and monitoring of corporate governance practices

ii. participation in the long-term strategic planning and the fulfillment ofDirectors' obligations and fiduciary responsibilities including but not limited toactive participation at the Board and Committee meetings.

iii. Attendance of Board Meetings and Board Committee Meetings

iv. Strategic perspectives or inputs regarding future growth of Company and itsperformance

v. Providing perspectives and feedback going beyond information provided by themanagement

vi. Not just making Commitment but also putting efforts to achieve those commitmentsmade to shareholder and other stakeholder interests


The Board of Directors and key managerial persons are responsible for ensuring thatinternal financial controls have been laid down in the Company and that such controls areadequate and are functioning effectively. Sayaji has policies procedures and managementsystems in place that map into the definition of Internal Controls as detailed in theCompanies Act 2013. These have been established at the entity and process levels and aredesigned to ensure compliance to internal control requirements regulatory compliance andappropriate recording of financial and operational information.

15.1 A Catalog of Various Polices of the Company are hereunder:

 Corporate Social Responsibility Policy

 Familiarization programme for Independent directors

 Material Subsidiary Policy

 Related Party Transaction Policy

 Risk Management Policy

 Remuneration and Nomination Policy

 Policy for determination of materiality

The Audit Committee met the Company's Statutory and Internal Auditors to ascertaintheir views on financial statements including the financial reporting system complianceto accounting policies and procedures the adequacy and effectiveness of the internalcontrols and systems followed by the Company. The Management acted upon the observationsand suggestions of the Audit Committee


To the best of their knowledge and belief and according to the information andexplanations obtained by them your Directors make the following statements in terms ofSection 134(3)(c)of the Companies Act 2013:

a. that in the preparation of the annual financial statements for the year ended 31stMarch 2016 the applicable accounting standards have been followed along with properexplanation relating to material departures if any;

b. that such accounting policies as mentioned in Notes to the Financial Statements have been selected and applied consistently and judgment andestimates have been made that are reasonable and prudent so as to give a true and fairview of the state of affairs of the Company as at March 31st 2016 and of the profit ofthe Company for the year ended on that date;

c. that proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;

d. that the annual financial statements have been prepared on agoing concern basis;

e. that proper internal financial controls were in place and that the financialcontrols were adequate and were operating effectively.

f. that systems to ensure compliance with the provisions of all applicable laws were inplace and were adequate and operating effectively.


During the year in accordance with the Companies Act 2013 the Board re-constitutedsome of its Committees. There are currently six Committees of the Board as follows:

> Audit Committee

> Corporate Social Responsibility Committee

> Borrowing and Investment Committee

> Nomination and Remuneration Committee

> Stakeholders' Relationship Committee

Details of all the Committees along with their charters composition and meetings heldduring the year are provided in the Report on Corporate Governance a part ofthis Annual Report and also placed at the website of the Company


All related party transactions that were entered into during the financial year were onan arm's length basis and were in the ordinary course of business. There are nomaterially significant related party transactions made by the Company with PromotersDirectors Key Managerial Personnel or other designated persons which may have a potentialconflict with the interest of the Company at large.

All Related Party Transactions are placed before the Audit Committee and also the Boardfor approval. Prior omnibus approval of the Audit Committee is obtained for the transactions which are of a foreseen and repetitive nature. The transactions enteredinto pursuant to the omnibus approval so granted are audited and a statement givingdetails of all related party transactions is placed before the Audit Committee and theBoard of Directors for their approval.

The policy on Related Party Transactions as approved by the Board is uploaded on theCompany's website. A disclosure as required under section 134(3)(h) of the CompaniesAct 2013 and the Rule 8(2) of the Companies (Accounts) Rules 2014 being enclosed in theForm AOC-2 as Annexure A with the Board's Report.


During the financial year Company has received notice from Indore Development AuthorityIDA for cancellation of the lease for the entire land of Indore Hotel Propertyon the ground that the Company has constructed some shops on the land and sold the same.Since IDA has not provided opportunity of personal hearing to the Company thereforeCompany has filed a writ petition before the Honorable High Court of Madhya Pradesh(Indore Bench) for cancellation of the order of IDA. The honorable High Court has passedthe order in favor of the Company and quashed the order.

As per High Court directions IDA has granted the opportunity of personal hearing andheard company's plea on this matter. Presently the matter is pending with IDA itself.

Except above there are no significant material orders passed by the Regulators /Courts which would impact the going concern status of the Company and its futureoperations.


M/s K. L. Vyas & Co. Chartered Accountants (F.R.No 003289C) the statutoryauditors of the Company eligible for ratification of their appointment in the ensuingAGM. Members of the Company at the AGM held on 23rd August 2014 had approved theappointment of M/s K. L. Vyas & Co. as the Statutory Auditors for a term of 4financial years as required by the provisions of the Companies Act 2013 theirappointment needs to be ratified by members each year at the AGM. Accordingly requisiteresolution forms part of the notice convening the AGM.

The Auditors' have confirmed their eligibility under Section 141 (3)(g) of theCompanies Act 2013 and the Rules framed thereunder for ratification for appointment asAuditors of the Company. As required under SEBI (LODR) Regulations 2015 the auditorshave also confirmed that they hold a valid certificate issued by the Peer Review Board ofthe Institute of Chartered Accountants of India.


Pursuant to the provisions of Section 204 of the Companies Act 2013 read with theCompanies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Companyhas appointed M/s Neelesh GuptaS Co. a firm of Company Secretaries in Practice toundertake the Secretarial Audit of the Company. The Secretarial Audit Report is annexedherewith in the Form MR-3 as Annexure B.


Sayaji believes that try not to become a person of success but rather try tobecome a person of value.

Accordingly your Company provides great importance to the shareholders and theoperations which are committed to the pursuit of achieving high levels of operatingperformance and cost competitiveness consolidating and building for growth enhancing theproductive asset and resource base and nurturing overall corporate reputation. YourCompany is also committed to creating value for its other stakeholders by ensuring thatits corporate actions positively impact the socio-economic and environmental dimensionsand contribute to sustainable growth and development.


At Sayaji we ensure that we evolve and follow the corporate governance guidelines andbest practices sincerely to not just boost long-term shareholder value but to alsorespect minority rights. We consider it our inherent responsibility to disclose timely andaccurate information regarding our financials and performance as well as the leadershipand governance of the Company. Pursuant to the SEBI (LODR) Regulations 2015 theManagement Discussion and Analysis the Corporate Governance Report and the Auditors'Certificate regarding compliance of conditions of Corporate Governance are made part ofthe Annual Report.

23.1. CEO & CFO Certification

Certificate from Mr. Raoof Razak Dhanani Managing Director and Mr. Sandesh KhandelwalChief Financial Officer pursuant to provisions of Regulation 17 and sub regulation 8 ofthe SEBI (LODR) Regulations 2015 for the year under review was placed before the Boardof Directors of the Company at its meeting held on 30th May 2016.

A copy of the certificate on the financial statements for the financial year endedMarch 312016 is annexed along with this Report.


The Consolidated Financial Statements of the Company prepared in accordance withrelevant Accounting Standards (AS) viz. AS 21 AS 23and AS 27 issued by the Institute ofChartered Accountants of India form part of this Annual Report.


Energy conservation means to reduce the quantity of energy that is used for differentpurposes. This practice may result in increase of financial capital environmental valuenational and personal security and human comfort.

Individuals and organizations that are direct consumers of energy may want to conserveenergy in order to reduce energy costs and promote economic political and environmentalsustain ability. Industrial and commercial users may want to increase efficiency and thusmaximize profit.

The information on conservation of energy technology absorption and foreign exchangeearnings and outgo stipulated under Section 134(3)(m) of the Companies Act 2013read withRule 8 of The Companies (Accounts)Rules 2014 is annexed herewith as AnnexureC.


There have been no material changes and commitments if any affecting the financialposition of the Company which have occurred between the end of the financial year of theCompany to which the financial statements relate and the date of the report.


The details forming part of the extract of the Annual Return as on 31st March 2016 inform MGT- 9 is annexed herewith as Annexure D.


The disclosure required to be made in terms of Section 197(12) of the Companies Act2013 and Rule 5(1) is annexed herewith as Annexure E.

During the year there was no `employee drawing remuneration' required to bedisclosed as per the provision of section 197(12) of the Companies Act 2013 and Rule 5(2)of Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014.


Our Directors thanks various Central and State Government Departments Organizationsand Agencies for the continued help and co-operation extended by them. The Directors alsogratefully acknowledge all stakeholders of the Company viz. customers members dealersvendors banks and other business partners for the excellent support received from themduring the year. The Directors place on record their sincere appreciation to all employeesof the Company for their unstinted commitment and continued contribution to the Company.


Statements in the Board's Report and the Management Discussion & Analysisdescribing the Company's objectives expectations or forecasts may be forward-lookingwithin the meaning of applicable securities laws and regulations.

Actual results may differ materially from those expressed in the statement. Importantfactors that could influence the Company's operations include global and domesticdemand and supply conditions affecting charges of rooms & selling prices of finishedgoods input availability and prices changes in government regulations tax lawseconomic developments within the country and other factors such as litigation andindustrial relations.

For and on behalf of the Board of Directors

T. N. Unni
Place: Indore DIN 00079237
Date : 06.08.2016