THE MEMBERS OF SAYAJI HOTELS LIMITED
The Board of Director of your Company with immense pleasure present the 34th AnnualReport along with the audited financial statement containing Balance Sheet as at 31stMarch 2017 and statement of Profit and Loss and Cash flow (Standalone and Consolidated)Schedules and Notes to Accounts for the year ended 31st March2017.
HIGHLIGHTS OF PERFORMANCE
During the year under review on a standalone basis the revenue of the Company wasalmost stable with a slight decrease of 2.08%. It was mainly due to the sluggish businessduring Simhasth period. Demonetization also impacted the social function business to someextent. The finance cost percentage to the revenue was on the higher side during thecurrent year (9.57 % for FY 17 compared to the 7.42% for FY 16) on account of additionalborrowings during the year for various renovation projects and new properties. The lossbefore tax was increased due to slight downfall in the sales higher finance cost andincrease in operating expenses.
| ||Stand Alone (Rs. in Lakhs) ||Consolidated (Rs. In Lakhs) |
|Particulars ||Financial Year ||Financial Year ||Financial Year ||Financial Year |
| ||2016-17 ||2015-16 ||2016-17 ||2015-16 |
|Income ||15957.70 ||16296.67 ||18180.22 ||18248.22 |
|Less: Operating Expenses ||12922.54 ||12859.54 ||14443.04 ||14417.13 |
|Operating Profit ||3035.16 ||3437.13 ||3737.18 ||3831.09 |
|Less: Finance Cost ||1526.94 ||1209.27 ||1829.71 ||1504.28 |
|Profit before Depreciation ||1508.22 ||2227.86 ||1907.47 ||2326.81 |
|Less: Depreciation ||2074.05 ||2311.20 ||2529.11 ||2967.22 |
|Add: Depreciation written back ||0.15 ||0.03 ||0.15 ||0.03 |
|Profit/(Loss) before exceptional items ||(565.68) ||(83.31) ||(621.49) ||(640.38) |
|Exceptional Items ||0.00 ||1146.85 ||0.00 ||1146.85 |
|Profit Before Tax (PBT) ||(565.68) ||1063.54 ||(621.49) ||506.47 |
|Less : Tax Expenses || || || || |
|Current Tax ||50.18 ||503.29 ||52.12 ||503.29 |
|Deferred Tax ||(227.86) ||(470.66) ||(278.11) ||(634.35) |
|Earlier Years' Tax ||28.96 ||50.34 ||28.96 ||50.34 |
|Profit After Tax (PAT) ||(416.96) ||980.57 ||(426.46) ||587.19 |
|EPS (Equity Shares of Rs.10/- each) || || || || |
|Basic ||(3.07) ||4.92 ||0.13 ||5.97 |
|Diluted ||(3.07) ||4.92 ||0.13 ||5.97 |
The Company is in regular expansion mode and also upgrading its existing properties.Therefore in order to fund new projects/ upgradation the Board has not recommendeddividend and proposes to utilize the profits for its ongoing projects (Previous year Nil).
The authorized share capital of the company is Rs. 4000 Lakhs the paid up equity sharecapital is Rs.1751.80 Lakhs and preference share capital is Rs. 1000 Lakhs During the yearunder review the Company has not issued shares with differential voting right norgranted stock option nor sweat equity aggregating Rs. 2751.80 Lakhs.
The Company's equity shares are listed with the BSE Ltd. Since the preferential shareswere issued on preferential basis to the selected group of promoters the same was notlisted at the stock exchange.
Cash and cash equivalent as at 31st March 2017 was Rs. 1386.41 Lakhs. The Companycontinued to focus on judicious management of its working capital receivables andinventories. The working capital parameters were kept under strict check throughcontinuous monitoring.
In terms of provision of section 73 of Companies Act 2013 the Company had no openingor closing balances of deposits during the year under review. The Company has not acceptedany public deposits and as such no amount of principal or interest was outstanding as on31st march 2017. The Company has also not accepted any amount in contravention of theprovisions of the Act.
Particulars of loans guarantees and investments
During the year there were no loans guarantees or investments made by the Companycovered under the provision of section 186 of the Companies Act 2013. The particulars ofthe loans advances investments and guarantees have been disclosed in the notes to thefinancial statements attached with the Board Report.
Amount proposed to be transferred to the reserves
During the year under review Rs. (416.96 Lakhs) are proposed to be transferred to theGeneral Reserves.
REVIEW OF BUSINESS ACTIVITIES - EXPANSION/UPGRADATION PLANS
SAYAJI HOTELS LTD.
Indore : During the year the Company has renovated one floor of the hotel some banquethalls and constructed of a large kitchen and other sports amenities. Amber ConventionCentre: The construction of the Amber Convention Centre at Indore (M.P.) was alsocompleted during the year. Now it is operating in full capacity. Amber got a cheerfulresponse from the public and well appreciated regarding the facilities and ambience.Company has aggressive business plans and expects to achieve the same in next 2-3 years.The Effotel : Owned by Malwa Hospitality Pvt. Ltd. a subsidiary of the Company is doingcontinuously well. The top line of the hotel was closed by Rs. 2120.72 Lakhs. TheOperating profit percentage to the sales increased (28.26 % for FY 17 and 20.61% for FY16). Net loss for the year also came down significantly (Rs. (110.17 Lakhs) for FY 17 ascompared to Rs. (385.12 Lakhs) for FY 16. Vadodara : The Company is coming up with onemore 4-Star category hotel in the Vadodara City under its associate Company (PriniteHospitality Pvt. Ltd.). The construction of the said hotel is in full swing and expectedto start operation by Oct. 2017. The hotel will have 137 rooms 4 restaurants banquethalls of various sizes and other amenities etc. Raipur : The Company has also started theoperation in the City of Raipur Chhattisgarh in April 2017. The Company has taken a 4Star property on lease basis. The hotel has 110 rooms 3 restaurants and banquet halls ofvarious sizes. Company is hopeful of doing good banquet business in the city.
Barbeque-Nation Hospitality Ltd. is operating 79 restaurants across the country and 1restaurant in UAE and planning to open around 20 more restaurants during the currentfinancial year.
MANAGEMENT DISCUSSION AND ANALYSIS GENERAL ECONOMIC CONDITIONS AND OPPORTUNITIES
The Indian tourism and hospitality industry has emerged as one of the key drivers ofgrowth among the services sector in India. Tourism in India has significant potentialconsidering the rich cultural and historical heritage variety in ecology terrains andplaces of natural beauty spread across the country. Tourism is also a potentially largeemployment generator besides being a significant source of foreign exchange for thecountry.
The industry is expected to generate 13.45 million jobs across subsegments such asRestaurants (10.49 million jobs) Hotels (2.3 million jobs) and Travel Agents/TourOperators (0.66 million). The Ministry of Tourism plans to help the industry meet theincreasing demand of skilled and trained man power by providing hospitality education tostudents as well as certifying and upgrading skills of existing service providers.
India has moved up 13 positions to 52nd rank from 65th in Tourism & Travelcompetitive index.
Rising contribution to India's GDP l Tourism in India accounts for 7.5 percent of theGDP and is the third largest foreign exchange earner for the country.
l The direct contribution of travel and tourism to GDP expected to grow at 7.2 percentper annum during 2015-25 with contribution expected to reach US$160.2 billion by 2026. lThe sector's total contribution to GDP is expected to increase to US$ 280.50 billion. lThe total contribution of travel and tourism to Indian GDP is forecasted to increase by4.97 per cent per annum to US$ 280.5 billion by 2025 (7.2 per cent of GDP)
India's rising middle class and increasing disposable incomes have continued to supportthe growth of domestic and outbound tourism.
Domestic Tourist Visits (DTVs) to the States/Union Territories (UTs) grew by 15.5 percent y-o-y to 1.65 billion (provisional) during 2016 with the top 10 States/UTscontributing about 84.2 per cent to the total number of DTVs as per Ministry of Tourism.
INCREASED SPENDING ON TOURISM
Domestic expenditure on tourism has grown significantly and is further anticipated toincrease to USD332.4 billion by 2025.
As per Ministry of Tourism foreign tourists' arrival (FTAs) on e-tourist visaincreased 56.6 per cent year-on-year in December 2016. In 2016 foreign tourist arrivalson e-visas more than doubled to 1079696 from 445300 in 2015 partly because the e-visafacility was extended to 161 countries from 113 previously. India is expected to move upfive spots to be ranked among the top five business travel market globally by 2030 asbusiness travel spending in the country is expected to treble until 2030 from US$ 30billion in 2015.
International hotel chains will likely increase their expansion and investment plans inIndia and are expected to account for 50 per cent share in the Indian hospitalityindustry by 2022 from the current 44 per cent.
The tourism and hospitality sector is among the top 10 sectors in India to attract thehighest Foreign Direct Investment (FDI). During the period April 2000-December 2016 thehotel and tourism sector attracted around US$ 9.93 billion of FDI according to the datareleased by Department of Industrial Policy and Promotion (DIPP). With the rise in thenumber of global tourists and realizing India's potential many companies have invested inthe tourism and hospitality sector. Some of the recent investments in this sector are asfollows: l As per industry experts mid-hotel segment in India is expected to receiveinvestments of Rs 6600 crore (US$ 990 million) excluding land over next five years withmajor hotel chains planning to set up upscale budget hotels in state capitals and tier-IIcities. l The first Incredible India Tourism Investment Summit 2016 which was organisedfrom September 21-23 2016 witnessed signing of 86 Memoranda of Understanding (MoUs)worth around Rs 15000 crore (US$ 2.24 billion) for the development of tourism andhospitality projects. l Ctrip.com China's largest travel portal has bought a stake inIndia's largest travel portal MakeMyTrip for US$ 180 million via convertible bonds whichallows Ctrip to increase its share in MakeMyTrip up to 26.6 per cent.
The Indian government has realised the country's potential in the tourism industry andhas taken several steps to make India a global tourism hub.
In the Union Budget 2017-18 the Government of India has announced some initiatives togive a boost to the tourism and hospitality sector such as setting up of five specialtourism zones special pilgrimage or tourism trains and worldwide launch of IncredibleIndia campaign among others.
Some of the major initiatives taken by the Government of India to give a boost to thetourism and hospitality sector of India are as follows: l The Central Government has takena number of steps for smooth transitioning to cashless mode of payment to ensure that nohardship is faced by the tourists and the tourism industry remains unaffected fromgovernment's demonetisation move. l Maharashtra Tourism Development Corporation (MTDC) hascome up with a unique tourism experience of visiting the open cast coal mine of Gondegaonand underground coal mine of Saoner which are near Nagpur and part of Western CoalfieldsLimited. l A Tripartite Memorandum of Understanding (MoU) was signed among the IndianMinistry of Tourism National Projects Construction Corporation (NPCC) National BuildingsConstruction Corporation (NBCC) and Government of Jammu and Kashmir for the implementationof tourism projects in Jammu and Kashmir. l The Ministry of Tourism has approved projectsworth Rs 450 crore (US$ 67.10 million) under the Swadesh Darshan scheme for theimprovement and creation of tourism infrastructure in Madhya Pradesh Uttarakhand TamilNadu Uttar Pradesh and Sikkim. l The Union Cabinet has approved a MoU between India andSouth Africa aimed at expanding bilateral cooperation in the tourism sector throughexchange of information and data establishing exchange programmes and increasinginvestments in the tourism and hospitality sector. l The Union Cabinet has approved thesigning of Memorandum of Understanding between the Ministry of Tourism of India and theMinistry of Trade Industry and Tourism of Colombia in order to boost cooperation in thefield of tourism between the two countries. l The Central Government has given itsapproval for signing of a MoU between India and Cambodia for cooperation in the field oftourism with a view to promote bilateral tourism between the two countries. l The HeritageCity Development and Augmentation Yojana (HRIDAY) action plans for eight missions citiesincluding
Varanasi Mathura Ajmer Dwaraka Badami Vellankini Warangal and Amaravati have beenapproved by HRIDAY National Empowered Committee for a total cost of Rs 431 crore (US$64.27 million).
EMERGING TOURISM AND HOSPITALITY SEGMENTS
|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 |
| ||l A wide range of adventure sports are covered under this category with specialised packages |
|ADVENTURE TOURISM ||l The activities include mountaineering trekking bungee jumping mountain biking river rafting and rock climbing Tourists seek specialized medical treatments mainly ayurvedic spa and other therapies |
|MEDICAL TOURISM ||l The primary purposeis achieving promoting or maintaining good health and a sense of well-being |
|LUXURY TOURISM ||The luxury travel market in India registered a growth rate of 12.8% in 2016 the highest in comparison with any other BRIC country. |
|ECO ||Vast variety of flora and fauna in various states is a major factor behind their growing popularity as tourist destinations. |
|TOURISM ||l Then mala in Kerala is the first planned eco tourism destination in India. |
| ||One of the biggest contributor to tourism industry. |
|PILGRIMAGE TOURISM ||India being religious hub for different cultures attracts a large number of tourists every year. |
| ||Tourists visit India for its cultural heritage in various cities |
|HERITAGE TOURISM ||The country's rich heritage is amply reflected in the various temples majestic forts pleasure gardens religious monuments museums art galleries and urban and rural sites. |
India's travel and tourism industry has huge growth potential. The tourism industry isalso looking forward to the expansion of E-visa scheme which is expected to double thetourist inflow to India. India is projected to be the fastest growing nation in thewellness tourism sector in the next five years clocking over 20 per cent gains annuallythrough 2017 according to a study conducted by SRI International.
Sayaji Hotels Limited (Sayaji) was founded with an aim to forever be your Banyan treeof hospitality a place where everyone is welcomed special and truly important.
Our hotels are clearly differentiated by their products philosophy and services design.It's defined by a sensibility of intimate design and by their varied and eclectic culinaryexperiences; impeccable service. Each Sayaji reinterprets the tradition of hospitality ina refreshingly modern way to create unique experience and lifelong memories. Sayaji is theonly hotel that calls itself Truly yours.
India's travel and tourism industry has huge growth potential. The tourism industry isalso looking forward to the expansion of E-visa scheme which is expected to double thetourist inflow to India. India is projected to be the fastest growing nation in thewellness tourism sector in the next five years clocking over 20 per cent gains annuallythrough 2017 according to a study conducted by SRI International.
Following Segment Offer Good Opportunities: Medical Tourism l The presence ofworld-class hospitals and skilled medical professionals makes India a preferreddestination for medical tourism. l India's earnings from medical tourism could exceed USD8billion by 2020. l Tour operators are teaming up with hospitals to tap this market.
Cruise Tourism l Cruise shipping is one of the most dynamic and fastest growingsegments of the global leisure industry. l Government of India has estimated that Indiawould emerge with a market size of 1.2 million cruise visitors by 2030 31. l MoreoverIndia is looking to take advantage of its 7500 km coastline to tap growth potential ofthe cruise tourism segment.
Rural Tourism l The potential for the development of rural tourism in India is high asmost of its population resides in rural areas. l This can benefit the local communityeconomically and socially and facilitate interaction between tourists and locals for amutually enriching experience.
India is often termed as hotspot of biodiversity and its rich natural heritage isunparallel in many ways. l Such valuable resource base gives impetus for the practice ofvariety of alternate tourism forms a many of which are already in existence. l Forexample: The national parks wildlife sanctuaries and biosphere reserves.
These are opportunities for tourism sector as well as hospitality sector as bothdirectly or indirectly depend upon each other.
INTERNAL COMPLAINT COMMITTEE (SHWW PREVENTION PROHIBITION AND REDRESSAL) ACT 2013
The company has zero tolerance for sexual harassment at its workplace and in line withthe provision of the Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act2013 and the Rules there under your Board of Directors has approved andadopted thePolicy of Prevention of Sexual Harassment of Women at workplace toprovide equal employment opportunity and is committed to provide a work environment thatensures every woman employee is treated with dignity and respect and afforded equitabletreatment. The Company has constituted the different internal complaint committee toprovide protection against sexual harassment of the women at different work places of theCompany situated across the country.
During the year under review the company has not received any complaint on SexualHarassment. The company has complied with the information required to be provided underSexual Harassment of Women at Work place (Prevention Prohibition and Redressal) Act2013.
CORPORATE SOCIAL RESPONSIBILITY INITIATIVES
As the average net profit of the Company for last 3 years is negative hence there isno liability on the Company to incur expenditure on CSR activities as prescribed u/s 135and schedule VII of the Companies Act 2013. Even 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 www.sayajihotels.com As the Company is not coming under thepurview of Section 135 of the Companies Act 2013 hence is not required to provideparticulars of CSR.
RISK AND CONCERN
Hospitality Industry required many resources for proper implementation and achievementsof their goals and objectives. These resources are associated with various risks.Risk may be the possibility that an event will occur adversely affect theachievements of the Company's objectives and goals. Risk may be classified accordingto controllability i.e. Controllable Risk and Uncontrollable Risk. In otherwords Uncontrollable risk is a systematic risk and Controllable risk is an unsystematicrisk .Hospitality industry faces both risks.
SYSTEMATIC RISK (UNCONTROLLABLE RISK)
It is uncontrollable or having less control by the organization and not predictable aswell as macro in nature It affects a large No. of organization. It includes followingrisks: l Economic Conditions
The hotel industry may be adversely affected by changes in national or local economicconditions and other local market especially in the climate of economic crisis. Downturnsor prolonged adverse conditions in the real estate or capital markets or in national orlocal economies and difficulties in securing financing for the development of hotels couldhave a material adverse effect on our business results of operations ability to developnew projects and the attainment of our strategic goals. economic situation facing thenation or the world are among the factors that those working in the industry can have nocontrol over. l Legal Changes
Changes in the law can also affect companies in the hospitality industry and cannot becontrolled. The regulatory environment in the hospitality industry can change from time totime and this can have an effect on the way that hotels airlines and restaurants all goabout conducting business. l Technology
Technology continues to develop unconstrained. The hospitality industry like manyothers is affected by technological changes. As new technologies are made availablecompanies within the industry are forced to adapt to the changes or get left by thewayside. l Competition
Competition is another factor that those managing or owning businesses in thehospitality field have little or no control over. Many times competition is heavilyaffected by economic and other regulatory factors. l Trends
While you may spend a good part of your profits on marketing in the hopes of favorablyinfluencing trends some are beyond your control. An increase in technology use by yourcustomers may be built into your strategic planning but you may not have planned for thewidespread use of social media that could affect your business. Celebrities who becomeadvocates for a cause or decide to boycott a certain business practice can start a trendthat could seriously affect your business if you're on the wrong side of the trend. lCustomer Base
Your target customer base may change suddenly or slowly over a period of time. Thechanging makeup of your neighborhood that attracts more singles or young renters canaffect your business. l Weather
Storms tornadoes hurricanes and wildfires are outside your purview of controllablebusiness factors. In addition to the direct impact a storm may have on your ability toopen your doors at any given time widespread weather events often carry a substantialtrickle-down effect to a wide range of businesses.
l Socio-Political Risks
Your Company faces risks from the socio-political environment internationally as wellas within the country and is affected by events like political instability conflictbetween nations threat of terrorist activities occurrence of infectious diseasesextreme weather conditions and natural calamities etc. which may affect the level oftravel and business activity. l 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. l Brand and Reputation
Brand is the personality and soul of an organization through which organizationcommunicates to outside. Hospitality companies rely on their brands to drive customers.Popular brands such as Sayaji are familiar with customers and have becometrusted names in the market. For gaining reputation and establishing brand in the marketit takes many years. There is always a risk of damage of brand name and reputation in themarket in which the organization has less control or no control. However for the wellestablished hotels in the Hospitality Industry there is less risk related to brand andreputation. l Safety and Security
The threat of terrorist attack remains a major concern for the industry. Hoteloperators must make every effort to protect their guests while encouraging tourism.
UNSYSTEMATIC RISK (CONTROLLABLE RISK)
Unsystematic risk also known as "specific risk" is the type of uncertaintythat comes with the company or industry (specific Company or Industry). Unsystematic riskcan be reduced through diversification. l Business Risk
Business risk refers to the basic viability of a business there is always a risk thatwhether a company will be able to make sufficient sales and generate sufficient revenuesto cover its operational expenses and turn a profit. l Financial Risk
Financial risk is associated with those companies which are working under highfinancial leverage: As when the company uses more debt into its capital structure and findit difficult to meet its financial obligation (pay interest and principal amount of debtdue) so there is chances of insolvency.
l Liquidity Risk
Liquidity risk is when the Company may be unable to meet short term financial demands.This usually occurs due to the inability to convert a security or hard asset in to cashwithout loss of capital and/or income in the process. l Operational Risk
Operational risk is when there is the prospect of loss resulting from inadequate orfailed procedures systems or policies. Employee errors Systems failures Fraud or othercriminal activity. The Company is always working in operational risk. l Data Privacy
Cyber security has been a big concern for a number of sectors the hospitality businessis more focused on preventing data and identify theft. As Hotels collect a lot ofinformation about their guests to insure themselves against damages and to fuel their ownrewards programs. This makes them popular targets among cyber criminals and hackers as asingle breach could result in hundreds or even thousands of pieces of guests' personalinformation (names addresses social security numbers etc.) and payment details beingcompromised. Because of this they need to make sure that this data is protected againstfraudsters. l Guest Behavior
Guests can also potentially be the biggest threats both directly and indirectly toprofitability. Law suits from people who are injured or damage to guestrooms can pose abig risk to the bottom line. l Staff
Staff is another critical risk. Staff will have more options both in and outside theindustry. This means hotels are at greater risk of having their key personnel poached bytheir competitors.
RISK MITIGATION INITIATIVES
OUR COMPANY EMPLOYS VARIOUS POLICIES AND METHODS TO COUNTER THE RISKS EFFECTIVELY ASENUMERATED BELOW: l Strategy for Safety and Security
Your Company has implemented various security measures against the threat of terroristattack at all its properties which inter alia include screening of person installation ofmetal detectors CCTV cameras are in place etc. to protect their guests. l Strategy toTackle Competition
By extensively improving its service standards as also progressively renovating itsproperties across the multi brand portfolio. Providing attractive packages to attractcustomer Aggressive marketing through various offline and online mediums.
l Measures for Business Risk &Financial Risk and Liquidity Risk
Your company properly budgeting all the business aspects and continues to focus onjudicious management of its working capital receivables inventories and other workingcapital parameters were kept under strict check through continuous monitoring. Further itgains operating and financial leverage by expansion through management contract andleveraging the strength of its Associates. l Adoption of New Technologies
By removing obsolete technology and adopting modern methodology unconstrainedly weendeavor to control the cost of services provided by the Company. l Data Security Measure
Your company using a secure server to exchange and record data which is protected bythe password and can only be accessed by the organization people who are concerned withthe information and all computer system of your company are under observation of ITdepartment and they continuously monitor all the activities. l Measures to Handle GuestBehavior
Your Company's all hotels have proper internal controls in place to handle guestdestruction and ensure traveler's safety during their stay. l Measure for Retention ofStaff
Your Company has various retention plans and innovative strategies to help them to keepemployees engaged and properly address their issue and consider their ideas for thebusiness at all the level through which staff remains motivated and content and alsoconduct various programs for their mental relaxation.
Your company firmly believes that employees are the most valuable assets and keyplayers of business success and sustained growth. Only with their participation we manageto achieve a healthy work culture transparency in working fair business practices andpassion for efficiency. Thus development of human resources at all levels is taken onpriority to upgrade knowledge and skill of employees and sensitize them towardsproductivity quality cost reduction safety and environment protection. The company'sultimate objective is to create a strong and consistent team of employee where in eachlink in the resource chain is as strong as the other. In view this various employeebenefits recreational and team building programs are conducted to enhance employeeskills motivation as also to foster team spirit. Company also conducts in house trainingprograms to develop leadership as well as functional capabilities in order to meet futuretalent requirement and to enhance business operations. Industrial relations were cordialthroughout the year. The company is total number of permanent employees on roll as 31stMarch 2017 was 2098 across all its units.
SAFETY HEALTH AND ENVIRONMENT
For proper implementation and success of Company's operational strategy links toensuring safety and provide healthy environment to our guests employees and to the personwho are visiting to our hotels and offices and also need to take responsible care ofenvironment by keeping this in mind Sayaji applies high standard of safety and healthyenvironment across the group and also constantly giving high priority to social concern.Your company continually strives towards sustainable development by trying to strike abalance between the needs of our customer and responsible care for the environment. Yourcompany is committed to protect and promote the environment. Appraisal for ensuringsafety health and environment in hotels can be executed by various methods includingself- assessment guest satisfaction surveys design and engineering plans incidentintelligence gathering quality audits and risk management reviews. Hotel management teamsdiscuss issues periodically and develop action plans where risks are prioritizedresponsibilities assigned and improvement actions identified management reviews.progressed and monitored. Action plans are reviewed as necessary at appropriate levels toextend and drive action or develop common solutions.
PERFORMANCE OF THE SUBSIDIARY COMPANIES - AUDITED FINANCIAL STATEMENTS OF THE COMPANY'SSUBSIDIARIES
As on 31st March 2017 the Company has 3 Subsidiaries and 1 Associate Company. Duringthe year under review there was no change in the nature of businesses of Subsidiaries. Inaccordance with Section 129(3) of the Companies Act 2013 the Company has prepared aconsolidated financial statements 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 theCompanies Act 2013 the Annual Report of the Company containing therein its standaloneand the consolidated financial statements have been placed on the website of the Companywww.sayajihotels.com. Further as per fourth proviso of the said section audited annualaccounts of each of the subsidiary companies have also been placed on the website of theCompany www.sayajihotels.com. Shareholders interested in obtaining a copy of the auditedannual accounts of the subsidiary companies may write to the Company Secretary at theCompany's Registered Office or e-mail to email@example.com
BOARD OF DIRECTORS AND OTHER KEY MANAGERIAL PERSONNEL & BOARD MEETINGS
The Board of the Company is duly constituted with proper balance of ExecutiveDirectors Non-Executive Directors and Independent Directors. According to the requirementof the Companies Act 2013 and the SEBI (LODR) Regulations 2015. As on 31stmarch 2017your Board has following directors:
|Name ||Date of Appointment ||Designation |
|1. Mr. Thottapully Narayanan Unni ||31/01/2002 ||Independent Director |
|2. Mr. Sanjay Ahuja ||01/02/2012 ||Nominee Director |
|3. Mr. Raoof Dhanani ||14/11/2013 ||Managing Director |
|4. Mrs. Suchitra Dhanani ||06/02/2014 ||Whole Time Director |
|5. Mr. Abhay Chintaman Chaudhari ||14/02/2017 ||Independent Director |
|6. Mr. Kayum Dhanani ||30/11/2012 ||Director |
|7. Mr. Pradeep Goyal ||06/02/2014 ||Independent Director |
Changes in the composition of Board of directors
During the year under review Mr. Abdul Razak Dhanani (DIN - 00926236) resigned fromthe Board w.e.f. 07.02.2017 and Mr. Abhay Chintaman Chaudhari (DIN - 06726836) isappointed as an Additional Director (Independent Category) w.e.f. 14.02.2017. Mrs SuchitraDhanani (DIN 00712817) was re-appointed as Whole-Time Director of the Company w.e.f.06.02.2017 subject to the approval of the members of the Company in the ensuing generalmeeting. Except above there were no changes done in the constitution of the Board.
As on March 31st 2017 your Company has following Independent Directors:
1. Mr. T.N. Unni (DIN 00079237)
2. Mr. Pradeep Goyal (DIN 02798770)
3. Mr. Abhay Chintaman Chaudhary (DIN 06726836) In pursuance of section 149(7) of theCompanies Act 2013 all the three Independent directors of the Company have submitted adeclaration under Section 149(6) of the Companies Act 2013 and Regulation 16(1)(b) of theSEBI (LODR) Regulation 2015 that they meet the criteria of independence. In the opinionof the Board they are meeting the criteria of independence.
Retirement by rotation
In accordance with the provisions of Section 152(6) of the Companies Act 2013 and interms of Articles of Association of the Company Mr. Kayum Razak Dhanani (DIN 00987597)and Mrs. Suchitra Dhanani (DIN 00712187) are liable to retire by rotation at the ensuingAnnual General Meeting and being eligible offer themselves for re-appointment. The Boardrecommends their appointment.
Changes in other Key Managerial Personnel
During the year under review there were no changes in the position of KMP's.
Number of meetings of the Board
During the financial year 2016-17 8 (eight) meetings of the Board were convened atregular intervals to discuss and decide on Company's business however in case of aspecial and urgent business need the Board's approval is taken by passing resolutionthrough circulation as permitted by law which were taken on record in the minutes of thesubsequent Board meetings. The notice of meeting and detailed agenda of theBoard/Committee meetings circulated at least a week prior to date of respective meeting.Details of such meeting provided in the Corporate Governance report which forms the partof this report. The intervening gap between the Meetings was within the period prescribedunder the Companies Act 2013 and the SEBI (LODR) Regulations 2015.
Familiarization Program for Independent Directors
The Company has made Familiarization program for the Independent Directors so as toenable them gain deeper understanding of the Company its operations business policiesindustry perspective etc. the details of Familiarization programme arranged forIndependent Director have been disclosed on the website of the company at :www.sayajihotels.com.
Selection of New Directors and Board Membership Criteria
The responsibility for the selection and recommendation to the Board of potentialDirectors has been delegated to the Remuneration and Nominations Committee (theCommittee) which periodically review the composition of the Board to ensure that theBoard has at all times the mix of members and expertise necessary for the successfuloversight of the Company's business and the delivery of value to shareholders. The Policyfor the Selection and Appointment of Directors is publicly available on the Company'swebsite at www.sayajihotels.com which forms the part of this Annual Report.
Annual evaluation of the Board
The Board carried out peer evaluation of all Board members annual performanceevaluation of its own performance as well as working evaluation of the committee of boardas per criteria laid down in the Nomination and remuneration and evaluation policy of theCompany. Evaluation of all the board members is done on an annual basis.
Criteria for evaluation of board of directors as a whole i. The frequency of meetings;ii. The length of meeting; iii. The administration of meeting; iv. The number of committeeand their note; v. The flow of information to board members and between board members; vi.The quality and quantity of information; and vii. The Disclosure of information to thestakeholders.
Criteria for evaluation of the individual Directors i. Ability to contribute andmonitor corporate governance practices; ii. Ability to contribute by introducing bestpractices to address top management issues; iii. Participation in long term strategicplanning; iv. Commitment to the fulfillment of director obligations and fiduciaryresponsibility; v. guiding strategy; vi. Monitoring management performance anddevelopment; vii. Statutory compliance and Corporate Governance; viii. Attendance andcontribution at board / Committee meetings; ix. Time spent by each of the member; and x.Core competence.
INTERNAL CONTROL SYSTEMS
Your company believes that internal control is a necessary concomitant of principle ofgovernance that freedom of management should be exercised within a framework ofappropriate checks and balances. Your Company remains committed to ensuring an effectiveinternal control environment that inter alia provides assurance on orderly conduct ofoperation security on asset prevention and detection of fraud/error accuracy andcompleteness of accounting records and timely preparation of reliable financialinformation.
A Catalogue of Various Polices of the Company are hereunder: l Corporate SocialResponsibility Policy l Familiarization programme for Independent directors l MaterialSubsidiary Policy l Related Party Transaction Policy l Risk Management Policy lRemuneration and Nomination Policy l Policy for determination of materiality The AuditCommittee met the Company's Statutory and Internal Auditors to ascertain their views onfinancial statements including the financial reporting system compliance to accountingpolicies and procedures the adequacy and effectiveness of the internal controls andsystems followed by the Company. The Management acted upon the observations andsuggestions of the Audit Committee.
DIRECTORS' RESPONSIBILITY STATEMENT
Your Company's Director make the following statement in terms of Section 134(3)(c) ofthe Companies Act 2013 which is to be the best of their knowledge and belief andaccording to the information and explanations obtained by them: a. that in the preparationof the annual financial statements for the year ended 31st March 2017 the applicableaccounting standards have been followed along with proper explanation relating to materialdepartures if any; b. that such accounting policies as mentioned in Notes to theFinancial 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 2017 and of the loss of theCompany for the year ended on that date; c. that proper and sufficient care has been takenfor the maintenance of adequate accounting records in accordance with the provisions ofthe Companies Act 2013 for safeguarding the assets of the Company and for preventing anddetecting fraud and other irregularities; d. that the annual financial statements havebeen prepared on a going concern basis; e. that proper internal financial controls were inplace and that the financial controls were adequate and were operating effectively. f.that systems to ensure compliance with the provisions of all applicable laws were in placeand were adequate and operating effectively.
COMPOSITION OF VARIOUS COMMITTEES OF BOARD OF DIRECTORS
During the year in accordance with Companies Act2013 the Board re-constituted someof its committee of its committees. The Company had the following committee as at yearended 31stMarch 2017: O Audit Committee O Corporate Social Responsibility Committee OBorrowing and Investment Committee O Nomination and Remuneration Committee O Stakeholders'Relationship Committee The details with respect to the composition charters and meetingheld during the year are given in detail in the Report on Corporate Governance' ofthe Company which forms part of this Annual Report and is available on the Company'swebsite at www.sayajihotels.com.
RELATED PARTY TRANSACTIONS
There were no materially significant related party transactions i.e. transaction ofmaterial in nature with its promoters directors or senior management personnel or theirrelatives etc. that may have potential conflict with the interest of the Company atlarge. Transactions entered with the related parties defined under the Companies Act 2013and provisions of SEBI (Listing Obligation and Disclosure Requirement) Regulation 2015during the financial year 2016-17 were mainly in the ordinary course of business and onarm's length basis and for which the approval is already given by the board and the auditcommittee in the past and the Company has not entered into any new related partytransaction during the year. Accordingly requirement to provide disclosure under form no.AOC 4 is not applicable.
The policy on materiality of Related Party Transaction and dealing with related partytransaction as approved by the Board is available on the Company's website and can beaccessed at: www.sayajihotels.com
The appointment of M/s K. L. Vyas & Co. Chartered Accountants (F.R. No 003289C)the statutory auditors of the Company is subject to ratification in the ensuing AGM.Members of the Company at the AGM held on 23rd August 2014 had approved the appointmentof M/s K. L. Vyas & Co. as the Statutory Auditors for a term of 4 financial years asrequired by the provisions of the Companies Act
2013 their appointment needs to be ratified by members each year at the AGM.Accordingly requisite resolution forms part of the notice convening the AGM.
The Auditors' have confirmed their eligibility under Section 141(3)(g) of the CompaniesAct 2013 and the Rules framed thereunder for ratification for appointment as Auditors ofthe Company. As required under SEBI (LODR) Regulations 2015 the auditors have alsoconfirmed that they hold a valid certificate issued by the Peer Review Board of theInstitute 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 Board hasappointed M/s Ritesh Gupta & Co. a firm of Company Secretaries in Practice (holdingCertificate of Practice bearing No 3764) to undertake the Secretarial Audit for thefinancial year 2016-17 of the Company. The Secretarial Audit Report for the financial yearended March 31st 2017 is annexed herewith in marked as Annexure 1 inForm No. MR-3' and forms an integral part of this report. No qualificationreservation and adverse remarks were contained in the Secretarial Audit Report.
ENHANCING SHAREHOLDERS VALUE
The Company actively working to create shareholders value we have a clear strategy togrow the size and geographic scope of our core model. We are driving earning growth andhave a strong history of earning growth. We are focused on returns on capital employed aswe strategically allocating capital to support future growth and continue to seekopportunities to further improve capital and project discipline and have a strong balancesheet to manage through period of higher working capital needs. And continuously strivefor excellence in all aspects of our business through the integration of sustainablebusiness development and innovation.
Your company has been observing best corporate Governance Practices and benchmarkitself against each such practice on continual basis. Your company is committed forhighest standard of Corporate Governance in adherence of Securities and Exchange of India(Listing Obligation and Disclosure Requirements) Regulation 2015 and requirement underother regulator/ applicable laws. Accordingly your Board functions as trustees of theshareholders seeks to ensure that the long term economic value for its shareholder isachieved and also tries to strike balance of interest of all the stakeholder. TheManagement Discussion and Analysis the Corporate Governance Report and the Auditor'sCertificate related to compliance of condition of Corporate Governance forms an integralpart of this Annual report.
CEO & CFO Certification
In pursuant to provisions of Regulation 17(8) of the SEBI (LODR) Regulations 2015 aCertificate from Mr. Raoof Razak Dhanani Managing Director and Mr. Sandesh KhandelwalChief Financial Officer for the year 2016-17 under review was placed before the Board ofDirectors of the Company at its meeting held on 30th May 2017.
A copy of the certificate on the financial statements for the financial year endedMarch 31st 2017 is annexed along with this Report.
CONSOLIDATED FINANCIAL STATEMENTS
The Consolidated Financial Statements of the Company prepared in accordance withrelevant Accounting Standards (AS) viz. AS 21 AS 23 and AS 27 issued by the Institute ofChartered Accountants of India form part of this Annual Report.
ENERGY CONSERVATION TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The company continued energy conservation efforts during the year. It has closelymonitored power consumption and running hours on day to day basis thus resulting inoptimum utilization of energy. The hotels are fitted with energy saving devices toconserve energy in the long run which leads to reduce energy cost and helps to promoteeconomic political and environmental sustain ability and thus maximize profit.
The information on conservation of energy technology absorption and foreign exchangeearnings and outgo stipulated under Section 134(3)(m) of the Companies Act 2013 read withRule 8 of The Companies (Accounts) Rules 2014 is annexed herewith as
MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY
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.
EXTRACT OF ANNUAL RETURN
The details forming part of extract of Annual Return as on 31st March 2017 inForm MGT-9' as required under Section 92(3) of Companies Act 2013 read with theCompanies (Management and Administration ) Rules 2014 is included in this Board's Reportas Annexure-3' and forms and integral part of this report.
PARTICULARS OF REMUNERATION OF EMPLOYEES
The disclosure required to be made in terms of Section 197(12) of the Companies Act2013 and Rule 5(1) is annexed herewith as
During the year there was no employee drawing remunerations' 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.
Your Board wishes to sincerely thank all its shareholder for their patronage. YourBoard would like to express their sincere appreciation for the assistance and co-operationreceived from the TFCI financial institution Banks customers Vendors Investors andall the other stakeholders for their confidence and trust they have reposed in theCompany. Your Director similarly expresses gratitude for the assistance and co-operationextended by SEBI BSE RBI MCA ROC NSDL CDSL Central Government and Government ofvarious states and other Regulatory Authorities including Local Governing Bodies. YourBoard acknowledges appreciation for the invaluable support provided by the AuditorsLawyers and Consultants. We also place on record our appreciation of the contributionmade by our employees at all the levels our consistent growth was made possible by theirhard work solidarity cooperation and support.
Statements contained in the Board's Report and the Management Discussion & Analysisdescribing the Company's estimates projections and expectations may be forward-lookingand based upon certain assumptions and expectations of future events over which thecompany has no control and which could cause actual results to differ materially fromthose reflected in such statements. Readers should carefully review other information inthis Annual Report and in the Company's periodic reports. The company undertake noobligation to update or revise any of these futuristic statements whether as a result ofnew information future events or otherwise.
| ||For and on behalf of the Board of Directors |
| ||T. N. Unni |
|Place : Indore ||Chairman |
|Date : 28.08.2017 ||DIN 00079237 |