Your Directors take pleasure in presenting the Thirty Sixth Annual Report JindalHotels Limited ('the Company') along with the Audited Financial Statements for theFinancial Year ended March 31 2021.
1. FINANCIAL RESULTS
(Rs. In Lakhs)
| ||FY 2020-21 ||FY 2019-20 |
|Turnover & Other Income ||1567.01 ||3791.39 |
|Less: Expenditure ||1675.53 ||2698.34 |
|Profit/Loss before Depreciation Interest and Taxation ||(108.52) ||1093.05 |
|Interest ||477.72 ||471.56 |
|Depreciation & Amortization ||488.25 ||515.60 |
|Profit before Taxation ||(1074.48) ||105.89 |
|Provision for Income Tax /Deferred Tax ||21.21 ||37.96 |
|Net Profit/Loss after Taxation ||(1095.69) ||67.93 |
|Other comprehensive Income (OCI) ||8.81 ||(3.48) |
|Net Profit/Lossafter OCI ||(1086.88) ||64.45 |
2. COMPANY'S PERFORMANCE
The Total Income for FY 2020 21 was Rs. 1567.01 lakhs which was lower than theprevious year's Total Income of 3791 .39 lakhs by 58.67% caused by the COVID-19 pandemicand efforts to curtail it. This had a severe impact on the economy in general and traveland tourism in particular. Consequently the Company reported a Loss After Tax for FY2020-21 of 1095.69 lakhs in comparison with a Profit after tax of 67.93 lakhs for FY2019-20.
Depreciation and Finance Costs
Depreciation at 488.25 Lakhs was in line with that of FY 2019-20. Finance costs for FY2020-21 at 477.72 lakhs was higher than FY 2019-20 costs by 6.16 lakhs. This was mainlydue to interest on increased borrowings to fund the Company's operational cashrequirements.
Borrowings and Capital Expenditure
The total long-term borrowings stood at 5318.84 lakhs as on March 31 2021 as against4645.49 lakhs as on March 31 2020. Our Banker has granted a term loan under EmergencyCredit Line Guarantee Scheme (ECLGS)of Rs. 837.99 Lakhs which has increase of our longterm borrowings.
An analysis of the Business and Financial Results are given in the ManagementDiscussion and Analysis which forms a part of the Annual Report.
3. MANAGEMENT DISCUSSION & ANALYSIS
The forecast of global economic output is expected to expand by around 3.8% to 4% in2022. The recovery of global economy is expected to remain below pre-pandemic levels for along period. The possibility of downside could increase if the spread of virus remainsuncontrolled.Lot would depend on containment of the spread of the virus ability toprovide relief to needy and vaccination.
Indian Economy in Retrospect
The nation-wide lockdown caused a sharp contraction of GDP in the FY 20-21. Improvedgovernment and private consumption coupled with net exports have supported the economy inthe second half. The Economic Survey projects India's real GDP to grow by 11% in 2021-22provided normalized economic activities continue and COVID-19 vaccination gatherstraction. If this is supplemented with a supply-side push from reforms the easing ofregulation continued infrastructural investments recovery of pent-up demand increase indiscretionary consumption low-interest credit disbursement and adequate liquidity theeconomy can overtake the pre-pandemic levels of FY 2019-20 in another two years. Howeverthese estimates are subject to any adverse impact caused by the recent wave of thepandemic. (Source: Economic Survey 2020-21).
Global Hospitality and Tourism Industry- An Insight
Global tourism suffered it's worst-ever year in 2020-21 with international arrivalsdropping substantially due tothe strict travel restrictions imposed by various countriesto curtail the spread of the pandemic. Though these restrictions were slowly beingrelaxed owing to a re-surge in COVID-19 cases and emergence of new variants manycountries have reintroduced stricter travel restrictions mandatory testing quarantinesand in some cases border closures and domestic lockdowns. This has impacted theresumption of international travel. Further the pace of vaccinations has been slower thanexpected and varies across countries. Most experts do not see global travel returning topre pandemic levels before 2023.
When tourism travel restarts it is expected that the demand would usher fornature-based tourism with open-air activities.
Indian Hospitality and Tourism Industry- Present Scenario
As mentioned above foreign tourist arrivals have registered a steep drop. Leisuretravel has showed some revival in popular destinations. The Weddings were back albeitwith curtailed numbers. Business and corporate travel is yet to revive.
Outlook for Future
The situation may not improve meteorically for the tourism and hospitality sector inthe near future.The outlook of the industry would largely depend on the ability to containand control new strains of the virus and vaccinating the masses.The travelers' and locals'preference of accommodation and dining would tilt in towards reputed brands that followthe protocols of hygiene and safety in their products and services. The hospitality sectorwith its resilience will survive and adapt to the changing demands in the times to come.As you are aware the company has realizing the importance of building a Brand engagedwith ACCOR group of hotels an international brand that is compatible with thecharacter and culture of our Company. Since June 2017 the Company's Hotel is operated by ACCOR.This association would enhance the business prospects of the Company.
TheGovernment of India has taken several measures toboost the prospects of to thetourism and hospitality sector which amongst others include:
Issue of operational guidelines for COVID safety and hygiene for hotels restaurantsB&Bs/ Home stays and Tourism Service Providers
Validity of approval or certifications of hotels and other accommodation units whoseproject approval/re-approval and classification/reclassification have expired / werelikely to expire has been extended upto 30th April 2021.
The Ministry has developed an initiative called SAATHI (System for AssessmentAwareness &Training for Hospitality Industry) for effective implementation ofGuidelines/SOPs issued with reference to COVID 19 and beyond for safe operations ofHotels Restaurants B&Bs and other units.
Operational Recommendations for safe resumption of business with easing of lockdownrestrictions have been issued for various segments of the travel and hospitality industryand circulated amongst all stakeholders.
Recognition of Travel Agents Tour Operators Tourist Transport Operators by theMinistry of Tourism has been extended automatically by six months. Those who havesubmitted applications for recognition by the Ministry have been given provisionalrecognition for six months pending completion of required procedures.
The Ministry has modified the guidelines of the Marketing Development Assistance (MDA)Programme under which financial assistance is provided to tourism service providers StateGovernments and UT Administrations to promote tourism in the overseas markets.
The Government has revised incentives for MICE events under Champion Services SectorScheme (CSSS) in order to boost MICE tourism in the country.
The Company promotes a transparent work environment to enhance teamwork and buildbusiness focus. The HR policy is updated in line with the changing HR culture in theindustry as a whole.
Significant Changes in Financial Ratio:
|Sr. No. List of Ratios ||FY 2020-21 ||FY 2019-20 |
|1. Operating Profit Margin (%) ||(38.08%) ||15.23% |
|2. Net Profit Margin Ratio (%) ||(69.92%) ||1.79% |
|3. Return on Net worth ||(61.82%) ||2.49% |
|4. Interest Coverage Ratio ||(1.37) ||1.24 |
|5. Debt Equity Ratio ||1:3 ||1:70 |
|6. Current Ratio ||1.86 ||1.69 |
|7. Debtors Turnover Ratio(Days) ||18 ||11 |
|8. Inventory Turnover Ratio(M) ||2.59 ||5.92 |
All Financial Ratios except current ration have been impaired due to reduction in salesturnover consequent to heavy loss suffered by the company on account of severe effect ofCOVID- 19 Pandemic.
4. DIRECTORS AND KEY MANAGERIAL PERSONNEL
Ms. Shagun Mehra Director retires by rotation at the forthcoming Annual GeneralMeeting and being eligible offer herself for re-appointment. The Board commends herreappointment by the members at the forthcoming Annual General Meeting.
Mr. Shashikant Patel has resigned w.e.f 1st August 2020 as Chief FinancialOfficer(CFO)due to personal reasons. Mr. Kishor Darji has been appointed at the vacatedplace of CFO with effect from 11th August 2020.
Ms. Karuna Advani has resigned w.e.f. 31st March 2021 as Company Secretary& Compliance Officer. Ms. Mansi Vyas (Membership No. A42869) has been appointed in herplace w.e.f. 1st April 2021.
The Board do not recommend transfer of any amount to General Reserves.
Due to losses during the year your Directors have not recommended Dividend for theFinancial Year 2020-21.
7. TRANSFER OF UNCLAIMEDDIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND
As mandated in section 125 of the Companies Act 2013 any unclaimed or unpaid Dividendfor the financial year ended March 31 2014 is due for remittance on 14th October 2021 tothe Investor Education and Protection Fund established by the Central Government.
Section 124(6) of the Companies Act 2013 read with Investor Education and ProtectionFund Authority (Accounting Audit Transfer and refund) Rules 2016 amended from time totime further requires the Company to transfer the equity shares on which the dividend hasremained unpaid or unclaimed for a continues period of seven years to a special demataccount to be opened by Investor Education and Protection Fund Authority ('IEPFAuthority'). The Company has intimated individually to all such shareholders.
8. SHARE CAPITAL
The Company has issued 6 50000 Share Warrants of Rs.20/- each to M/S Riser HoldingsPrivate Limited a Promoter Group Company on preferential basis which as per the termsof issue is converted in to Equity Shares of Rs.10/- each and at premium of Rs.10/- eachon 9th February 2021 and hence the Paid Up Equity share capital as on 31st March 2021stands increased to Rs. 66500000/-. There was no public issue rights issue bonusissue etc. during the year. The Company has not issued shares with differential votingrights sweat equity shares nor granted any stock options.
The Company has fully utilized the fund raised through Preferential Allotment duringthe year. The proceeds of the issue has been utilized for working capital requirementscapital expenditures repayment of debts and for general corporate purpose which werestated in the explanatory statement to the notice of 35th Annual General Meeting. As perregulation 32 (1) there has been no deviation or variation between projected utilizationof funds and the use of the proceeds..
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).The entire property has magnetic door locks which monitors the overall supply toindividual 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 airconditioning process 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 for Banquet Halls (Save Water Save Energy);
Every Quarter we have a trend of celebrating Energy Saving Week wherein entireteam is motivatednot only to save energy but also to contribute their ideas for energyconservation.
In the Opinion of the Board the information pertaining to technology absorption arenot applicable to the Company.
# FOREIGN EXCHANGE EARNINGS AND OUTGO
During the year under review your Company earned Foreign Exchange of Rs. 22 40516/-(PY Rs.3 18 31846/-) whereas outflow of foreign exchange was Rs. 3 87293/-(PYRs. 2189488/-).
11. STATEMENT CONCERNING DEVELOPMENT AND IMPLEMENTATION OF RISK MANAGEMENT POLICY OFTHE COMPANY
The Company takes proactive measures in the development and implementation of a RiskManagement Policy with due consideration of the elements of risks which in the opinion ofthe Board may threaten the very existence of the Company's business being; (a) financial(b) legal and regulatory (c) operating and (d) commercial risks including health safetyand environment.
The Company does not have any Risk Management Committee as the Board takes intoconsideration all the risk factors at regular intervals at it's meetings.
The Company has a broad-banded approach for insuring it's interests. Adequate cover istaken for all movable and immovable assets to mitigate against any potential risk andhazards.
13. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTIONPROHIBITION AND REDRESSAL) ACT 2013.
Your Company has Zero tolerance for sexual harassment at its workplace and has adopteda policy on prevention prohibition and Redressal of sexual harassment at work placein-line with the provisions of the sexual harassment of women at work place (PreventionProhibition and Redressal) Act 2013 and the Rules thereunder for prevention and redressalof complaints of sexual harassment at workplace.
The Company has also adopted an Anti-harassment Policy in line with the requirements ofthe Sexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act2013. Internal Complaint Committee is set up to redress complaints if any monitored bywomen line supervisors reporting to the Managing Director. No complaint is received fromany employee during the financial year 2020-21.
14. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THECOMPANIES ACT 2013
No loans guarantees or investments is made by the Company during the year to which theprovisions of Section 186 of the Companies Act 2013 apply.
15. DETAILS OF SIGNIFICANT & MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There are no significant and material orders passed by the Regulators / Courts whichwould impact the going concern status of the Company and its future operations.
16. COMPANY'S POLICY RELATING TO DIRECTORS APPOINTMENT PAYMENT OF REMUNERATION ANDDISCHARGE OF THEIR DUTIES
The provisions of Section 178(1) relating to constitution of Nomination andRemuneration Committee (NRC) is applicable to the Company. The Company has a policyrelating 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 is displayed on websitewww.suryapalace.com.
17. FORMAL ANNUAL EVALUATION
Pursuant to the provisions of the Companies Act 2013 and Regulation 17(10)of SEBI(LODR) regulation 2015a structured questionnaire was prepared after taking intoconsideration the various aspects of the Board's functioning composition of the Board andit's Committees. The Board has carried out an Annual Performance evaluation of it's ownperformance the directors individually as well the working of it's Committees.
18. STATUTORY AUDITORS
M/s. Modi & Joshi Chartered Accountant Vadodara were appointed as StatutoryAuditors for a period of 5 years [i.e. from FY 2017-18 to FY 2021-22]in the 32nd AnnualGeneral Meeting held on 12th September 2017 .They have informed that they are notdisqualified from continuing as Auditors of the Company. The requirement to place thematter relating to appointment of auditors for ratification by members at every AnnualGeneral Meeting is withdrawn vide notification dated May 7 2018 issued by Ministry ofCorporate Affairs New Delhi. Accordingly no resolution is proposed for ratification ofappointment 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 hasappointed Mr. Kashyap Shah Company Secretary in practice to undertake the SecretarialAudit of the Company. The Secretarial Audit Report is furnished in Annexure 1 (FormNo. 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 were no qualifications reservations or adverse remarks made by the StatutoryAuditor of the Company.
With reference to observation of the secretarial auditors on delayed submission ofshareholding pattern for March 2020 quarter by 3 days we would like to clarify that thedelay has occurred mainly due to lockdown closure of office operations and technicalproblems.Further the BSE LIMITED has also waived the fine imposable for late submissionof Shareholding Pattern for March 2020 quarter under Regulation-31of SEBI (ListingObligations and Disclosure Requirements) Regulations 2015.
No other qualifications reservations or adverse remarks made by the SecretarialAuditor of the Company.
21. ANNUAL RETURN
In compliance with Section 92(3) and 134(3)(a) of the Act Annual Return is uploaded onCompany's website and can be accessed at www.suryapalace.com.
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 ofthe Companies (Appointment and remuneration) Rules 2014 have been annexed as Annexure2.
23. PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES
Particulars of contracts or arrangements with related parties in Form AOC-2 areenclosed as per Annexure 3. All the Related Party Transactions are carried out atarm's length price in Ordinary Course of Business and within the financial limitprescribed under Section 188 of the Act. Prior approval of the Board of Directors isobtained for all such transactions.
Your Company's Policy on Related Party Transactions as adopted by the Board can beaccessed on the Company's website at www.suryapalace.com.
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 4 to the report.
25. NUMBER OF BOARD MEETINGS CONDUCTED DURING THE YEAR UNDER REVIEW
The Company had five board meetings during the financial year under review on 23rdJune 2020 11th August 2020 19th September 2020 10th November 2020 & 9thFebruary 2021.
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 3: 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 requirements as stipulated in Section 149(6) of the Companies Act 2013 soas to qualify themselves to continue as Independent Directors under the provisions of theCompanies Act 2013 and the relevant rules. We confirm that in opinion of the Board ID'sfulfill the conditions specified in LODR Regulations and are independent of theManagement.
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. Ambalal Patel (Non-executive IndependentDirector) c. Ms. Chanda Agrawal(Non-executive Director) d. Mr. Mukund Bakshi(Non-executive Independent Director)
The above composition of the Audit Committee consist majority of independent Directors.The details of Constitution of all committees namely Audit Committee Nomination &Remuneration Committee and Stakeholders Relationship Committee are mentioned in theCorporate Governance Report [which forms part of Annual Report].
The Company has established a vigil mechanism and overseas through the committee thegenuine concerns expressed by the employees and other Directors. The Company has alsoprovided adequate safeguards against victimization of employees and Directors who expresstheir concerns. The Company has also provided direct access to the Chairman of the AuditCommittee on reporting issues concerning the interests of co. employees 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 annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;
(b) the directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the company at the end of the financial year and ofthe profit and loss of the company for that period;
(c) the directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets 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 thecompany and that such internal financial controls are adequate and were operatingeffectively. Internal financial control means the policies and procedures adopted by theCompany for ensuring the orderly and efficient conduct of its business including adherenceto Company's policies the safeguarding of its assets the prevention and detection offrauds and errors the accuracy and completeness of the accounting records and the timelypreparation of 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 Company or fraud onthe Company by the officers and employees of the Company has been noticed or reported orno fraud are reported by theauditors to the Audit Committee or the Board under section143(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 theSecretarial Standards specified by the Institute of Company Secretaries of India theSecretarial Standards on Meetings of the Board of Directors (SS-1) and General Meetings(SS-2) came into effect from 1st July 2015 and further amendments applicable w.e.f. 1stOctober 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 toreport concerns about unethical behavior actual or suspected fraud or violation of theCompany'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 andachieving an injury and illness free work place.
Your Directors would like to express its sincere appreciation and gratitude to theCompany's valued stakeholders including Members customers Bankers vendors businesspartners State Government and the Government of India for their continued co-operationand 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.
|For and on behalf of the Board || |
|Jindal Hotels Limited || |
|Piyush D. Shah ||Jatil Patel |
|Managing Director ||Director |
|DIN: 00010884 ||DIN: 00012794 |
|Date: 10.08.2021 || |
|Place: Vadodara || |