Your Directors are pleased to present the Thirty Fifth Annual Report on thebusiness and operations of your Company along with the audited financial statements forthe financial year ended 31st March 2020.
In the year under review the Company has performed reasonably well and workedintensively and witnessed healthy growth amidst increased competition. Over the yearsyour Company has pursued a very proactive strategy and approach anticipating the evolvingtrends and developing mechanisms to meet diverse crisis. Your Company continues in itsquest for excellence by constant improvement of the guest experience through betterservice levels and product upgrades. Your Directors believe that the Company should offerincreasing value to all its stakeholders and society at large. We have maintained thiswith our tradition and policy of offering high quality content and services. As stewardsof the Company we will always share our vision of growth with you.
1. FINANCIAL HIGHLIGHTS
Your Company's financial performance for the year ended 31st March 2020 isas below:
(Rs. In Lakhs)
|Financial Performance ||Year ended ||Year ended |
| ||31.03.2020 ||31.03.2019 |
|Turnover & Other Income ||3791.39 ||3817.87 |
|Less: Expenditure ||2698.34 ||2624.36 |
|Profit before Depreciation Interest and Taxation ||1093.05 ||1193.51 |
|Interest ||471.56 ||475.40 |
|Depreciation & Amortization ||515.60 ||553.60 |
|Profit before Taxation ||105.89 ||164.51 |
|Provision for Income Tax / Deferred Tax ||37.96 ||14.86 |
|Net Profit after Taxation ||67.93 ||149.71 |
|Other comprehensive Income (OCI) ||(3.48) ||3.60 |
|Net Profit after OCI ||64.45 ||153.25 |
2. REVIEW OF OPERATIONS
The economic scenario in 2019 has further declined with the GDP growth rate reachingits all-time low of 5 % in the first quarter (Q1 April-June) of fiscal year 2019-20. Thecurrent financial year started off at a slow pace in terms of occupancy going down ascompared to the previous financial year primarily due to elections. The slump in occupancyrates has also impacted the ARR downwards. However from second quarter onwards a jump inthe occupancy rates across India to result in occupancies slightly over the 60-70 per centmark and consequently create a four to six per cent jump in the ARR over FY
19. While performance parameters of hotels are going up the pace of development hasslowed down due to many issues.
Your Company would have posted higher quantum of profit if increased cost ofdepreciation and interest payment had not been collocated due to expansion &renovation project in the hotel.
In the Financial year 2019-20 there was a decline in RevPAR (Revenue per availableRoom) growth and in room occupancy rate. The Company also emphasizes for a sharp focus onmarketing strategy as well as consistent sales effort to increase room occupancy and ARR.
The industry is stuck in a crack due to oversupply disruptions through technologicalinnovations and a slowdown in demand due to macro issues. However the scenario hadchanged during the mid of the year and industry expected a better performance on majorparameters.The ARR story continues to be modest though. While it is true that rateshaven't grown by leaps it is equally pertinent to note that the blended nationwide ARRappears to grow slowly because a larger portion of the existing supply is budget andmidscale positioned.
Over the last year your Company has undertaken key initiatives to drive long-termgrowth strengthening its core business exploring new categories streamlining itsoperations for better organisational effectiveness and agility and embedding digitisationin key areas of the value chain.The sales and other income of Financial Year 2019-20 wasrecorded at Rs. 3791.39 lakhs (PY Rs.3817.87 lakhs). While revenues have declined at 0.69%during the year and net profits to 55% as compared to the previous year.
On March 11 2020 the WHO (World Health Organization) declared Covid-19 outbreak as apandemic. The lockdowns and restrictions imposed on various activities due to COVID-19pandemic have posed challenges on the businesses of Company. As on 31st March2020 the Company faces significant economic uncertainties due to COVID-19 which haveimpacted the operations particularly minimal occupancy in hotels and reduction in averagerealization rate per room and revenue from Restaurant & Banquets. The ongoing COVID-19pandemic and the worldwide reaction to it has compelled companies to radically rethinktheir strategies and the way they operate. The increasing need among the companies is toperform tasks on time within budget and with right resources.
3. MANAGEMENT DISCUSSION & ANALYSIS:
The Management Discussion & Analysis covers the details relating to theIndustry Structure & Development Opportunities & Threats Outlook Risk &Concerns discussion on financial performance with respect to operational performance etc.
The importance of a brand tie-up in a highly digitalised economy is continuing tobecome ever more important. Since June 2017 onwards your Company is being managed andoperated by ACCOR group of hotels an international brand that is compatible with thecharacter and culture of our Company to increase business prospects and strengthen themarketing networking.
Our teams are the key actors of our constant transformation but more than thatthey are the authors of their own story with ACCOR. We believe in creativity curiosityand the willingness to learn and that makes us agile and capable of making the world abetter place. Each individual personality and passion create a unique and authenticemotional connection with our guests.
Prospects & Concerns
The overall growth meltdown in the economy had its impact on the tourism economy of thecountry as well if the government's own statistics are to be believed. For an industrywhich was expecting acceleration in inbound traffic after the first quarter mainlybecause of the general elections had to satisfy with nearly flat growth. The inboundgrowth for India was just about 3% in the first 10 months of the year which was lowestconsidering the track record of the past many years.
The issues in the aviation sector also had its share in Indian tourism's agony.Thereafter all made air travel a costly affair forcing people to revisit their vacationplans. As the year is coming to close the reports from various agencies about thefinancial health of the Indian airline companies is not satisfactory.
Domestic travel has always been the mainstay of Indian tourism and hospitalityindustry. The domestic consumption of travel products is largely recession-proof becauseof the Indian middle class' appetite to travel and lifestyle. However recent reports frommany leisure destinations have shown the softening of the domestic demand even during thepeak months. The overall market sentiment prevailing in the economy seems to be catchingup with travel as well if the indications are to be believed.
All these do seem to be bothering the players in the Hospitality 20:20. They are notconfident and hope that the 2020 pitch will be very hard to deliver results for them. Theyrepose faith in the millennial fans and hope they will continue to throng the Hospitalitystadia to boost the morale of teams in 2020. They certainly have apprehensions in theswing and the rough nature of the wicket they are going to face. But they are nervous andovertly cautious as of now.
The Hotel was shut down entirely during the lockdown phase as the Company was not partof Government denominated essential services. Hotels across the country are virtuallyclosed for the last three months or so with essentially zero revenues while having to bearwith mounting fixed costs. The Indian hotels' sector has been hit hard : grappling withsignificantly low demand with very few future bookings. Essentially all transient demandhas completely vanished and the remaining is largely on account of either a few long stayguests or hotels having been prescribed by the Government for the international travellersreturning to India. The Indian hospitality industry is undoubtedly one of the biggestcasualties of the COVID-19 outbreak as demand has declined to an all-time low. It ispredicted that the second quarter of the year 2020 to be the worst hit. Hotels will beunable to drive rates and may even seek to attract business at deep discounts.
India is the most digitally advanced traveller nation in terms of digital tools beingused for planning booking and experiencing a journey but India's major chunk of middleclass with unstable disposable incomes during the current situation of COVID 19 is notable to support the growth of domestic and outbound tourism during 2020.
In times to come it is assured by Hotel Operator [ACCOR] that these global playershave not only strong National but also International Sales and Marketing Set up. Withgrowing number of hotels in each chain they are also able to tie up with many AirlinesCredit Card Companies and offer attractive loyalty programmes for the customers. Themanagement continues to expect that there will be increment in Online business andimprovement in room occupancy rate due to renovation refurbishment and up gradation ofguest rooms supported by prevalent personalized service and provision of specialamenities for guest comfort.
Retaining the workforce even through training and development in the hotel industry isa tedious task as attrition levels are too high.
GST is a mixed bag of better and easier rules and regulations and increased costs andcompliances. The biggest issue for the hospitality industry has been the high rate of 12per cent GST for hotels charging room rentals upto Rs 7500/-. COVID 19 pandemic and hightaxation are main concern for further growth in business.
As the country faces the grappling situation of coronavirus pandemic its impact canlargely be felt by the tourism sector of the country as the once overbooked hotels andtransportations are now experiencing a deserted situation.
Travel industry has been hit hard by the pandemic. Since the outbreak it has been busyhonoring cancellation requests and demanding refunds from airlines and hotels. Being thepeak season the sector has suffered huge loss.It is also predicted that if the ongoingsituation prevails the tourism sector may experience in million job losses which accountsfor 70% of the total workforce employed by the industry.
When it comes to survival all that people care about is the basic requirements andforego the luxury. The summer season was the time when people waited to leave their housesand now they are scared to even step outside. This is the fear that the outbreak of thedeadly coronavirus has created and the tourism industry is bearing a huge bruntespecially the hotel and aviation industry who are longing to welcome a visitor for weeksnow.
Although the people from the tourism industry are eagerly waiting for the upliftment ofthe lockdown and resuming their operations the will of traveling in people after thelockdown remains questionable. It is also anticipated that when things turn back tonormal people initially might not be comfortable in indulging in big travel planshowever a few small domestic travel plans can be expected. Also the approach of varioushotels airlines and travel agents of tackling the current pressure from the customerswill severely define the decisions that customers will take in planning their next trip.
With the impact to the travel industry worse than ever the human toll of this publichealth crisis has been absolutely devastating for the hotel industry. For the hotelindustry priority is rehiring and retaining our hardworking employees who power vibrantindustry. Hotels were one of the first industries affected by the pandemic and will be oneof the last to recover. Supportive measures for the hotel industry is the need of the hourto make important policies to reflect the current economic reality and help the employeesin the industries that have been impacted the most.
During the Current year in first quarter the sales and turnover is negligible i.e Rs.64.17 lakhs only as compared to previous corresponding period and an estimated loss of Rs.375 lakhs. Your Company continues in its quest for excellence by constant improvement ofthe guest experience through better and safe service levels innovative concepts productupgrades sales and marketing initiatives etc.
Post COVID-19/UNLOCK : The New Guest Experience
How to inspire guest confidence that hotels are safe and clean and how to win backguest business ?
Due to the dramatic downturn in travel properties that remain open are operating withminimal staffing. The hotel industry is at a critical juncture. We need more resources tosurvive this unprecedented time. Additionally as the pandemic continues travel intentduring the upcoming six months continues to decline.
India's restaurant industry is facing what is possibly its worst existential crisis.While the COVID-19 lockdown reduces risk of transmission it has also meant that revenuesdropped to zero with businesses struggling to find the cash to pay their employees andmake rent. Perhaps the pandemic is merely exposing the cracks that already existed. Aroundthe world restaurants have been forced out of business. It will be a while before thesefundamental changes can be implemented and even longer before they show effect. In themeantime restaurants have the more urgent task of rebuilding confidence. They areexamining how hygiene and social distancing protocols can be implemented.
Early indications reveal that younger adults will be the first to travel again asevidenced by their intent to engage in almost every type of travel-related activity duringthe next six months
Post coronavirus weddings: The new normal when it comes to I do'
Weddings across the globe have been put on hold for the time being. Most weddings areexpected to be pushed to the latter half of 2020 or the beginning of 2021. However on thebrighter side in lieu of the nationwide lockdown to-be-weds can utilise this time tobetter plan their wedding once the virus threat is down to negligible.
The New Normal' for celebrating weddings in the post-COVID-19 world is going tobe different. With social distancing becoming the norm weddings will be smaller moreintimate and with emphasis on top-notch hygiene standards as well as ensure contactlessservices. Given this situation to limit risks and ensure safety couples who plan tocelebrate their weddings during the latter half of the year will have to consider alteringtheir wedding plans.
In the aftermath of COVID-19 and once the lockdown is over we expect many couples totie the knot however the way they do it will change. Couples will forego the bigfat' wedding for an intimate more cautious wedding adhering to social distancing norms.To ease worries of guest during the pandemic we are engaging with them virtually byconducting digital meetings and venue recess offering more flexibility in terms ofbooking and rescheduling weddings for a later date. We hope such measures benefiteveryone.
Tweaking the buffet-style service
The highlight of any Indian wedding is its lavish buffet. In an effort to comply withphysical distancing measures this is about to change too. While some couples may stillopt for buffet-style service precautionary measures like a contactless serving of disheswill be the norm. Opting for family-style entrees or sides at the table is another way toensure the safety of guests thereby avoiding serpentine queues at the food counterswhere people tend to gather in close proximity at weddings. Besides this Restaurants willalso have to ensure that the raw materials or ingredients for food preparation are sourcedfrom trustworthy suppliers who ensure utmost cleanliness while delivering the stock fromthe farm to the venue.
As weddings go local they also go virtual
In the aftermath of the pandemic we can expect couples to opt for local weddings intheir hometowns instead of destination weddings. Additionally overseas guests may preferbeing a part of the celebration virtually due to restrictions for non-essential travel.Furthermore live streaming wedding ceremonies are a foreseeable trend in the near future.Therefore wedding planners and venue operators can expect a surge in demand for suchservices post-COVID-19.
Impeccable hygiene standards
Right from the entry to exit venues need to place sanitizers and hand napkins at everypoint. Guests should be able to sanitize their hands on arrival have access to cleaningand protective equipment at their tables ample availability of hand washes and sanitizersshould be made in the washrooms. To avoid overcrowding the washrooms guests should have adesignated waiting area where they can maintain physical distance from each other. Allvenues should diligently disinfect spaces pre and post the wedding function.
Apart from venue hygiene even makeup artists and photographers documenting the weddingwill have a certain Standard Operating Procedures (SOP) to follow in the post-pandemicphase. To ensure that the bride feels safe makeup artists and hairstylists will wearmasks and sanitise their products. With regards to photographers the wedding party willprefer a smaller team to cover the wedding. Additionally as weddings are set to be moreintimate a large team won't be required at the venue.
Adapt to a post-COVID-19 culture
The new normal for weddings across the world is going to be significantly different. Inthe meanwhile it's time to stay educated make more informed decisions and rethink saferways to plan happy and safe celebrations post the pandemic.
Our main forte and focus has been the popularity of Food and Beverages facilities. Theforay of Indian restaurants into a variety of global cuisines and food fusion is having apositive impact on the F&B sector. Customers are more willing to experiment withdifferent cuisines because it is now easily accessible in the cities they live in andthis trend had increased Indian consumers' frequency of eating out.
Your Hotel's communication campaign is through leading dailies magazines hoardingsand social networking (Facebook Instagram Twitter along with other social media options)also. The management has taken active steps to promote the property with some effectivemarketing initiatives. We are launching some new services to add to the brand portfolio.Internal skill sets are being honed and developed for better utilization andimplementation of available resources. With these efforts we hope to increase theprofitability of your Company in the coming years.
Going forward it is expected that the industry to register an overall healthy growthon back of economic growth. The sector also faces several challenges in terms COVID 19complex regulatory environment and inadequate tourism infrastructure.
The Indian government has realised the country's potential in the tourism industry andhas taken several steps to make India a global tourism hub. Some of the major initiativesplanned by the Government of India to give a boost to the tourism and hospitality sectorof India are as follows:
Ministry of Tourism launches Audio Guide facility App called Audio Odigos for 12sites of India (including iconic sites).
Prime Minister Mr Narendra Modi urged people to visit 15 domestic touristdestinations India by 2022.
Statue of Sardar Vallabhbhai Patel also known as Statue of Unity' wasinaugurated in October 2018. It is the highest standing statue in the world at a height of182 metre. It is expected to boost the tourism sector in the country and put India on theworld tourism map.
The Government of India is working to achieve one per cent share in world'sinternational tourist arrivals by 2020 and 2 per cent share by 2025.
Under Budget 2020-21 the Government of India allotted Rs 1200 crore (US$171.70 million) for development of tourist circuits under Swadesh Darshan for eightnorth-eastern states.
Under Budget 2020-21 the Government of India allotted Rs 207.55 crore (US$29.70 million) for development of tourist circuits under PRASHAD.
Under Budget 2020-21 the Government of India allotted Rs 1200 crore (US$171.70 million) for development of tourist circuits under Swadesh Darshan for eightnorth-eastern states.
In 2019 Government reduced GST on hotel rooms with tariffs of Rs 1001 (US$14.32) to Rs 7500 (US$ 107.31) per night to 12 per cent; those above Rs 7501 (US$107.32) to 18 per cent to increase India's competitiveness as a tourism destination.
In September 2019 Japan joins a band of Asian countries including Taiwan andKorea among others to enter into the Indian tourism market.
4. DIRECTORS AND KEY MANAGERIAL PERSONNEL
There was change in the composition of Board of Directors during the Financial Year2019-20.
Pursuant to applicability of Regulation 17(1A) of LODR (Amendments) Regulations 2018Mr. Ambalal C Patel Non-Executive Independent Director has resigned on 31stMarch 2019 on attaining the age of 75 years on 1.04.2019. Thereafter at 34thAGM the members appointed Mr. Ambalal Patel aged 75 Years for 5 Years as IndependentDirector not liable to retire by rotation. And re appointment of Mr. Jatil G Patel &Mr. Mukund P Bakshi as Independent Directors (not liable to retire by rotation) of thecompany for a period of five years up to 31.03.2024.
Ms. Chanda Agrawal retires by rotation at the forthcoming Annual General Meeting andbeing eligible offer herself for re-appointment.
The Board commends her reappointment by the members at the forthcoming Annual GeneralMeeting.
The Board do not recommend to transfer any amount to General Reserves.
To augment working Capital Requirement your Directors have not recommended Dividend forthe Financial Year 2019-20.
7. TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND
In terms of Section 125 of the Companies Act 2013 any unclaimed or unpaid Dividendfor the financial year ended March 31 2013 is due for remittance on 29thOctober 2020 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 continues period of seven yearsto a special demat account to be opened by Investor Education and Protection FundAuthority (IEPF Authority'). The Company has intimated individually to all suchshareholders.
8. SHARE CAPITAL
The paid up equity share capital as on 31st March 2020 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 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 in Banquet Halls (Save Water Save Energy);
Every Quarter we have a trend of celebrating Energy Saving Week wherein entireteam is motivated not only to save energy but also to contribute their ideas for energyconservation.
# TECHNOLOGY ABSORPTION
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. 31831846/-(PY Rs. 31629745/-) whereas outflow of foreign exchange was Rs. 2189488/- (PY Rs.1799928/-)
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.
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) Act2013 and the Rules thereunder for prevention and redressalof complaints of sexual harassment at workplace.
The Company has adopted an Anti-harassment Policy in line with the requirements of theSexual Harassment 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. There was no complaint received from any employee during the financial year2019-20 and hence no complaint is outstanding as on March 31 2020 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 & MATERIAL 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. 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 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 have been displayed onwebsite www.suryapalace.com.
17. FORMAL ANNUAL EVALUATION
Pursuant to the provisions of the Companies Act 2013 and Regulation 17(10)of SEBI(LODR) regulation 2015 a structured questionnaire was prepared after taking intoconsideration the various aspects of the Board's functioning composition of the Board andits committees. The Board has carried out an annual performance evaluation of its ownperformance the directors individually as well as the evaluation of the working of itsCommittees.
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 32ndAnnual General Meeting held on 12th September 2017. They have confirmed thatthey are not disqualified from continuing as Auditors of the Company. The requirement toplace the matter relating to appointment of auditors for ratification by members at everyAnnual General Meeting is withdrawn vide notification dated May 7 2018 issued by Ministryof Corporate Affairs New Delhi. Accordingly no resolution is proposed for ratificationof appointment as Auditors.
19. RATIO ANALYSIS
There is no material or significant changes (i.e. change of 25% or more as compared tothe immediately previous financial years) in Key Financial Ratio.
As compared to previous year Debt Equity Ratio Current Ratio and Debtors CoverageRatio have been improved.
Where as Interest Coverage Ratio Inventory Turnover Ratio Operating Profit MarginRatio Net Profit Margin Ratio and Return on Net worth are slightly impaired.
Change in Return on Net Worth as compared [CY: 2.48%] to previous year [PY: 5.61%] hasimpaired.
20. 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).
21. 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.
22. EXTRACT OF ANNUAL RETURN
The extract 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. Annual Returnwill be placed at website of the Company [www.suryapalace.com]
23. 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.
24. 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 Related Party Transaction are held at arm's lengthprice and in Ordinary Course of Business and hence approval under Section 188 is notrequired.
Your Company's Policy on Related Party Transactions as adopted by your Board can beaccessed on the Company's website at www.suryapalace.com
25. 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) Regulation2015 isannexed as Annexure 5 to the report.
26. NUMBER OF BOARD MEETINGS CONDUCTED DURING THE YEAR UNDER REVIEW
The Company had five Board meetings during the financial year under review on 14thMay 2019 13th August 2019 27th September 2019 12thNovember 2019 & 11th February 2020.
27. SUBSIDIARIES JOINT VENTURES AND ASSOCIATE COMPANIES
The Company does not have any Subsidiary Joint venture or Associate Company.
28. 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.
31. 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 be appointed as Independent Directors under the provisions ofthe Companies Act 2013 and the relevant rules. We confirm that in opinion of the BoardID's fulfill the conditions specified in LODR Regulations and are independent of theManagement.
32. 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) [Appointed at 34th AGM on 24.09.2019] c. Ms. Chanda Agrawal(Non-executive Director) d. Mr. Mukund Bakshi (Non-executive Independent Director)
The above composition of the Audit Committee consists of independent Directors who formthe majority. The details of Constitution of all committees namely Audit Committee NRC& Stakeholders Relationship Committee is mentioned in the Corporate 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.
33. 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.
34. 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 the auditors to the Audit Committee or the Board under section143(12) of the Companies Act 2013.
35. SECRETARIAL STANDARDS OF ICSI
Pursuant to the approval given on 10th April 2015 by the Central Governmentto the Secretarial Standards specified by the Institute of Company Secretaries of Indiathe Secretarial Standards on Meetings of the Board of Directors (SS-1) and GeneralMeetings (SS-2) came into effect from 1st July 2015 and further amendmentsapplicable w.e.f. f 1st October 2017. The Company is in compliance with thesame.
36. VIGIL MECHANISM/ WHISTLE BLOWER POLICY
The Company has adopted the whistle blower 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.
37. 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 of Directors |
|Place: Vadodara |
|Date: 23rd June 2020 |
|Signing as per Board resolution passed on 23rd June 2020 |
|Ambalal Patel |