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U P Hotels Ltd.

BSE: 509960 Sector: Services
NSE: N.A. ISIN Code: INE726E01014
BSE 00:00 | 24 Feb U P Hotels Ltd
NSE 05:30 | 01 Jan U P Hotels Ltd
OPEN 261.00
PREVIOUS CLOSE 283.60
VOLUME 86
52-Week high 283.60
52-Week low 0.00
P/E 46.49
Mkt Cap.(Rs cr) 153
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 261.00
CLOSE 283.60
VOLUME 86
52-Week high 283.60
52-Week low 0.00
P/E 46.49
Mkt Cap.(Rs cr) 153
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

U P Hotels Ltd. (UPHOTELS) - Director Report

Company director report

BOARDS' REPORT

Dear Members

Your Directors are pleased to present the 57th Annual Report of the Company for thefinancial year ended March 312018.

Financials

(Rs. in lakh)

Current Year Previous Year
2017-18 2016-17
Revenue from Operations 9405.31 8789.45
Other Income 439.45 290.95
Expenditure 9309.10 8420.26
Depreciation 676.28 650.57
Profit before tax 535.66 660.14
Tax expense 304.65 376.58
Profit after tax 304.65 376.58
Other Comprehensive Income 54.21 38.64
Total Comprehensive Income 358.85 415.23
Profits available for Appropriation 4894.76 4590.11
Transfer to General Reserve - -
Earning Per Equity Share (Basic) 5.64 6.97
Earning Per Equity Share (Diluted) 5.64 6.97

Operations & State of Company's Affairs

Revenue from operations (net) has increased from Rs. 8789.45 lakh (previous year) toRs. 9405.31 lakh in the current year. The other income has increased from Rs. 290.95 lakh(previous year) to Rs. 439.45 lakh in the current year. The profit before tax has comedown to Rs. 535.66 lakh in the current year from 660.14 in previous year. The profitaftertax for the current year (before other comprehensive income) was Rs. 304.65 lakh asagainst Rs. 376.58 lakh in the previous year. The Total Comprehensive Income was Rs.358.85 lakh in current year against Rs. 415.23 lakh in previous year.

The details on operations & state of affairs of the Company have been given in thereport under Management Discussion & Analysis.

Dividend

No dividend has been recommended by the Board for the financial year ended 31st March2018.

Transfer to General Reserves

During the financial year the Company has not transferred any amount out of theprofits of the Company to the General Reserves.

Directors and Key Managerial Personnel

During the year under review Mr. Apurv Kumar and Mr. Rupak Gupta were appointed asJoint Managing Directors of the company with effect from 15th May 2017 to 14th May 2018.The Board in its meeting held on 24th February 2018 appointed Mr. Apurv Kumar and Mr.Rupak Gupta as Joint Managing Directors & Chief Financial Officer of the company for aperiod of three years with effect from 15th May 2018 to 14th May 2021. The Board hasrecommended their appointment at the ensuing Annual General Meeting.

Mr. Arvind Kumar will retire by rotation at the ensuing Annual General Meeting beingeligible offers himself for re-appointment at the ensuing Annual General Meeting. Mr.Shafi Alam has been appointed as an Independent Director with effect from 12.05.2017.

Securities and Exchange Board of India ("SEBI") vide notification dated 9thMay 2018 has come out with SEBI (Listing Obligations and Disclosure Requirements)Amendment Regulations 2018 ("New LODR Regulations") by further amending theSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015. The newRegulations shall be applicable with effect from 01st April 2019 unless otherwisespecifically provided in the said notification.

In compliance with Regulation 17(1 A) of New LODR Regulations Mr. Bisheshwar PrasadSingh and Mr. Arvind Kumar both non-executive directors have attained the age of seventyfive years and for continuing their directorship as non-executive directors in theCompany the Board has recommended continuing their directorship at the ensuing AnnualGeneral Meeting company.

Mr. Apurv Kumar and Mr. Rupak Gupta are also Chief Financial Officer of the companyduring the year under review. Mr. Prakash Chandra Prusty is Company Secretary of theCompany.

The company has received necessary declarations form the Independent Directors undersection 149(6) of the Companies Act 2013 that they meet the criteria of independence aslaid down under Section 149(6) of the Companies Act 2013 and Regulation 16(b) of ListingRegulations 2015. A Separate Meeting of the Independent Directors pursuant to Section149(8) and Schedule IV of the Companies Act 2013 was held on 24.02.2018.

The Company has put in place an induction and familiarization program for all itsDirectors including the Independent Directors. The familiarization program for IndependentDirectors in terms of provisions of Regulation 46(2)(i) of Listing Regulations isuploaded on the website of the Company at www.hotelclarks . com.

Directors Responsibility Statement

Your Directors' state that:

(a) in the preparation of the annual accounts for the financial year ended 31st March2018 the applicable accounting standards have been followed and there were no materialdepartures;

(b) they have selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the company at the end of the financial year and of the profitand loss of the company for that period;

(c) they have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the company and for preventing and detecting fraud and otherirregularities;

(d) they have prepared the annual accounts on a going concern basis; and

(e) they have laid down internal financial controls for the company which are adequateand are operating effectively.*

(f) they have devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems are adequate and operating effectively.

* Kindly refer to the Para "Internal Financial Controls" given herein below.

Due to the ongoing disputes and internal differences between the promotersgroup/management there were few pending non-compliances under the Companies Act 2013Listing Regulations 2015. The Company is in the process of complying the same.

Internal Financial Controls

The Company has a systematic process and well-defined roles and responsibilities forpeople at different hierarchical levels. The Internal Financial Control (IFC) system ofcompany comprises due compliances of company's policies and Standard Operating Procedures(SOPs) and internal audit checks. However due to the differences and disagreementsbetween the promoters / promoters group / management and ongoing suits which have beenfiled at the Hon'ble Civil Court Lucknow and in the Hon'ble National Company LawtribunalNew Delhi the appropriate discussions supervisions review on the affairs operation ofthe company the manner of strengthening the internal financial controls could not takeplace during the year under review at Board level. However the Audit Committee discussesand take note of the Internal Audit Reports at appropriate intervals and issue advises tothe Internal Auditors and units for better control.

Auditors and Auditors Report

Pursuant to the provisions of section 139 of the Companies Act 2013 M/s Satinder Goyal& Co. Chartered Accountants (Firm Registration No.027334N) have been appointed asStatutory Auditors of the Company for a term of five consecutive years to hold officefrom the conclusion of the 56th AGM until the conclusion of 61st AGM of the company to beheld in calendar year 2022. They have confirmed that they are not disqualified fromcontinuing as the auditors of the Company.

The Auditors have submitted their Report on the Financial statements of the Company forthe year ended 31st March 2018. The Auditors' qualifications/ adverse opinion onnon-compliances on various provisions of the Companies Act 2013 Listing Regulations andother laws applicable to the Company are given in Auditors' Report.

The clarifications of the Board on the said qualifications /adverse opinion are in theAnnexure-1 attached to this Report.

Secretarial Auditors

Pursuant to the provisions of Section 204 of the Act and The Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 the Board of Directors of the Companyhad appointed A. G. G. & Associates Company Secretaries to undertake the SecretarialAudit of the Company for the year ended 31st March 2018. The Secretarial Audit Report isannexed as Annexure 2. The Board of Directors of the Company has initiated necessarymeasures as required for the rectification of the non-compliances and observations whichhave been referred in the Report. The Board has submitted its replies upon the saidobservations in the Annexure-1 attached to this Report.

Suspension from trading / Compliance of Regulation 31(2) of SEBI LODR Regulations /Clause 40A of erstwhile Listing Agreement

The trading in shares of the company has been suspended since 25th February 2015 onaccount of non-compliance of erstwhile Listing Agreement & Listing Regulations. Thenon-compliance was not intentional. There have been differences of opinion of few promoterdirectors on the operation of the company and such differences of opinion could not besettled/cured which led to non-compliances. However during the year under review theCompany has complied with most of pending compliances and applied to Stock Exchange forrevocation of suspension of trading of shares in the company (‘revocationapplication'). As on date of this report the revocation application is being evaluated bythe Stock Exchange and further order /advise in this regard is awaited.

Particulars of Loans Guarantees and Investments

During the financial year under review the company has not granted any loans andadvances to related parties.

Financial Performance/Financial Position of Subsidiaries / Associate Companies / JointVentures There are no Subsidiary Companies/Associate Companies/ Joint venture associatedwith the Company.

Change in the Nature of Business:

No changes occurred in the nature of business during the financial year under review.

Annual Evaluation by the Board of its own performance its Committees and IndividualDirectors

The Board of Directors has made the annual evaluation of its own performance and thatof its committees and individual directors based on assessment of a structuredquestionnaire (covering various aspects of the Board's functioning Board cultureeffective participation contribution to the Board proceedings etc.) furnished by eachdirector / member-director of various committees in respect of their self assessment aswell as the assessment of the Board/ Committees followed by the discussions with thedirectors/ members of the Committees. The entire Board excluding the Director beingevaluated evaluated the performance of each Independent Director. The process of reviewof Non-Independent Directors Chairman and the Board as a whole and also its Committeeswere undertaken in a separate meeting of Independent Directors. The Independent Directors'meeting also assessed the quality quantity and timeliness of information required for theBoard to perform its duties properly.

Policy on Directors'Appointment and Policy on Remuneration

Pursuant to Section 134(3)(e) and Section 178(3) of the Companies Act 2013 the policyon appointment of Board members including criteria for determining qualificationspositive attributes independence of a Director and the policy on remuneration ofDirectors KMP and other employees is given in Annexure 3 and also uploaded in the websiteof the Company at www.hotelclarks.com and its URL ishttp://res.cloudinary.com/simplotel/image/upload/v1509797907/clarks-group-of-hotels/Remuneration_zzwd8c.pdf.

Material changes during the Financial Year

There were 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.

Conservation of Energy Technology Absorption and Foreign Earnings and OutgoSection-134(3)(m) of the Companies Act 2013 and Rule-8 of Companies (Accounts) Rules2014

Your company monitors the systems and methods devised in the context of energyconservation on an ongoing basis. The details have been specified in Annexure 4.

Meetings of the Board

Five meetings of the Board were held during the year under review. For further detailsplease refer to Corporate Governance Report being part of this report. Audit Committee& Whistle Blower/Vigil Mechanism Policy

The Audit Committee of the Company during the period under review comprised of JusticeMr. B. P. Singh (Retd.) - Chairman Mr. Arvind Kumar & Mr. Shafi Alam as members.

In line with the provisions of Section 177 (9) of the Act and Clause 22 of the SEBIListing Regulations your company has adopted a policy on Vigil Mechanism/ Whistle BlowerPolicy which provides the Directors and employees of the company to report actual orsuspected fraud or violation of your Company's Code of Conduct. The Whistle BlowerPolicy/Vigil Mechanism is available at company's website atwww.hotelclarks.com and its URL is https://res.cloudinary.com/simplotel/image/upload/v1531809031 /clarks-group-of-hotels/Whistleblower_Policy_-_Vigil_Machanism_gsrkz0.pdf

Nomination & Remuneration Committee Stakeholders' Relationship Committee

The details on composition meetings etc of Nomination & Remuneration Committeeand Stakeholders' Relationship Committee have been given in Corporate Governance Reportbeing part of this report.

Corporate Social Responsibility (CSR) Committee

The details on the composition of the Corporate Social Responsibility (CSR) Committeeare provided in the Report on Corporate Governance being part of this report

The brief outline of the Corporate Social Responsibility (CSR) Policy of your Companyand the initiatives undertaken by your Company on CSR activities during the year are setout in the Annual Report on CSR activities marked as "Annexure 5" of thisreport. The policy is available on the website of the Company www.hotelclarks.com .

The company was required to spend cumulatively Rs. 5553624/- during the yearhowever the Company has spent Rs. 5622630/- on CSR activities during the year underreview.

Particulars of Employees and Related Disclosures

The table containing the names and other Particulars of employees of the Company inaccordance with the provisions of Section 197(12) of the Companies Act 2013 read withRule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 is appended as Annexure 6 of the Board's report.

The Company did not employ any such person whose particulars are required to be givenunder Rule 5(2) and (3) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 as amended from time to time.

Risk Management

Risk is an integral and unavoidable component of business and your company is committedto managing the risk in a proactive and effective manner. In today's challenging andcompetitive environment strategies for mitigating inherent risks in accomplishing thegrowth plans of the Company are imperative. The common risks inter alia are: Regulationscompetition Business risk Technology obsolescence Investments retention of talent andexpansion of facilities. Business risk inter-alia further includes financial riskpolitical risk legal risk.

The company has formulated a Policy on Risk Management for identification evaluationmonitoring and minimization of identifiable risks and to ensure business growth withfinancial stability of the Company.

Contracts and Arrangements with Related Parties

There have been transactions entered into by the Company with related parties duringthe year under review. The related party transactions have been mentioned at the Notes No.30 and 41(d) of the Notes on Financial Statements. The Audit Committee in its meetingdated 08.08.2017 had approved the related party transactions entered into by the companyduring the financial years 2014-15 2015-16 and 2016-17 subject to the approval of Boardand decision of Hon'ble National Company Law Tribunal (NCLT). Since the related partytransactions are inter alia part of a legal case pending before the NCLT the Board was ofthe opinion that any decision of the Board on the related party transactions may becontrary to the decision of the NCLT which may not be executable later. Accordingly theBoard has deferred its decision on approving related party transactions till the finaldecision of NCLT Hence the disclosures of particulars of contracts/arrangements enteredinto by the company with related parties & being part of the pending legal case havenot been disclosed in the prescribed Form. However the particulars of transaction withrelated party approved by Audit Committee and Board has been disclosed in the prescribedform attached herewith as Annexure 7.

Extract of Annual Return

The extract of annual return in form MGT-9 as per Sec-92(3) and Rule-12(1) of theCompanies (Management and Administrative) Rules 2014 of the Company is enclosed herewithas Annexure 8 and is also available at the URLhttps://res.cloudinary.com/simplotel/image/upload/v1531807489/clarks-group-of-hotels/ Form_M G T- _9_AS_ON_31.03.2018.pdf.

Management Discussion and Analysis & Corporate Governance

The Reports on the Management Discussion & Analysis and Corporate Governance asrequired under Listing Regulations form an integral part of this report as Annexure 9 and10 respectively and are set out as separate sections to this Annual Report. A Certificatefrom the Company secretary in practice certifying compliance of conditions of CorporateGovernance as stipulated in the Listing Regulations is annexed with the report onCorporate Governance.

Disclosure as per the Sexual Harassment of Women at Workplace (Prevention ProhibitionAnd Redressal) Act 2013

The Company has adopted a policy on prevention of sexual harassment under the SexualHarassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013 and therules framed thereunder. During the Financial Year 2017-18 no case of sexual harassmentwas reported by any female.

Other Disclosures

i. There was no change in Authorised Share Capital of the company during the year underreview.

ii. The Company has not accepted any deposits during the Financial Year under review.

iii. The Company has not bought back any of its securities during the year underreview.

iv. The Company has not issued any Sweat Equity Shares during the year under review.

v. No Bonus Shares were issued during the year under review.

vi. The Company has not provided any Stock Option Scheme to the employees during theyear under review.

vii. The company did not issue equity shares with differential rights as to dividendvoting or otherwise.

viii. The Auditors have not reported any fraud during the year under review;

ix. As the company has no holding or subsidiary company the information relating toreceiving remuneration or commission from holding company or subsidiary company by the Jt.Managing Directors has not arisen.

x. No significant and material orders were passed by the regulators during the periodunder review.

Acknowledgement

The Board expresses its sincere appreciation to bankers business associatesconsultants and various Government Authorities for their continued support extended toyour company during the year under review. Your Directors also acknowledge gratefully theshareholders for their support and confidence reposed on your Company.

For and on behalf of Board

for U. P. Hotels Limited

Bisheshwar Prasad Singh Apurv Kumar Rupak Gupta
(Non-Executive Chairman- (Jt. Managing Director & (Jt. Managing Director &
independent Director) CFO) CFO)
DIN: 06949954 DIN: 00043538 DIN:00007310
ADD: House No. 7 ADD: 28 Shree Vihar ADD: 35-A Friends
Second Floor Colony Near Hotel Colony (East)
Block-A Neeti Bagh Clark Amer J L Nehru New Delhi-110065
New Delhi-110016 Marg Jaipur- 302018
Date: 02.08.2018
Place: New Delhi