DIRECTORS' REPORT To the Members, 1. Your directors have pleasure in presenting their 24thAnnual Report on the business and operations of the Company together with its Audited Accounts for the year ended 31st March, 2015. 2. OPERATIONS During the year under review, due to ongoing trend of economic slowdown, in the first half of the year,there was a downward trend in the demand.However, towards the second half of the financial year 2014-15 the demand picked up. Also, in the Ahmedabad city, Hotel business became more competitive due to commensing of new Hotels. The Average Occupancy of the hotel for 2014-15 has decreased to 63% from66% and the Average Room Rates of the hotel for the year 2014-15 has been noted as Rs. 5,587 as compares to Rs. 5,337 in the previous year 2013-14. However, during the financial year 2014-15, Company had been in a position to achieve a turnover of Rs. 2485.05 Lacs, in comparison to Rs. 2106.49 Lacs, in the previous year 2013-14. The profit before tax and profit after tax for the year under review were Rs. 237.56 Lacs and Rs. 244.63 Lacs respectively. Your directors are hopeful that with recovery in the economy, there would be a marked improvement in the performance of the company. The hotel unit of the Company "THE GATEWAY HOTEL UMMED" Ahmedabad is an ISO 22000:2005 certified hotel with the highest levels of Hygiene and Food Safety criteria. Your company's hotel is managed by The Indian Hotels Company Limited (Taj Group) for over Fifteen years. Further, The established "THE GATEWAY HOTEL, BRAND", superior ambience, interior decorations, services and loyal clientele retained its' market leadership in the city of Ahmedabad and has placed the hotel ahead of its Competitors. 3. NATURE OF BUSINESS The Company is engaged in the activities of Hotels and Restaurants. There was no change in the nature of the business of the Company during the year under review. 4. SHARE CAPITAL The paid up Equity Share Capital as on March 31, 2015 was Rs. 18.10 Crores. A) Issue of equity shares with differential rights: During the year under review, the Company has not issued any shares with differential voting rights. B) Issue of sweat equity shares During the year under review, the Company has not issued any sweat equity shares. C) Issue of employee stock options During the year under review, the Company has not issued any sweat equity shares. D) Provision of mon ey by compan y for purchase of its own shares by employees or by trustees for the benefit of employees The Company has no scheme of provision of money for purchase of its own shares by employees or by trustees for thebenefit of employees. Hence the details under rule 16 (4) of Companies (Share Capital and Debentures) Rules, 2014 are not required to be disclosed. 5. DIVIDEND Your directors are pleased to recommend 6% dividend on Optionally Convertible Preference Shares (OCPS) for the year ended 31st March, 2015, aggregating Rs. 7.23 Lacs. However, in view of future expansion, your directors express their inability to recommend a dividend on Equity Shares of the Company for the year under review. 6. REPORT ON P ERF ORMANCE AND FIN ANCIALPOSITION OF SU BSIDIARIES, ASSOCIATES ANDJOINT VENTURE COMPANIES The Company does not h ave S ubsi diari es, Associate and Joint Venture Companies. Hence, details for the same are not required to mention here. 7. DIRECTORS AND KMP: a) Changes in Directors and Key Managerial Personnel: Mr. Vishwajeetsingh Ummedsingh Champawat will retire at the forth coming Annual General Meeting ofthe Company and being eligible, offer himself for reappointment. During the year under review, Company has accepted resignation of Mr. Satish Sharma from the post of Company Secretary cum Compliance officer and appointed Mr. U. Champawat as a compliance officer of the Company on 16/10/2014. During the year under review, company has appointed Mr. Kalpesh Bhupatbhai Baraiya for the post of Company Secretary cum Compliance officer of the Company on 01/12/ 2014. The Company has appointed Mrs. Ragini Toshniwal as an additional independent woman director of the Company pursuant to section 149 of Companies Act, 2013 on 19/02/2015. b) Declaration by an Independent Director(s) and reappointment,if any All Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement. 8. EXTRACT OF THE ANNUAL RETURN The details forming part of the extract of the Annual Return in form MGT 9 is annexed herewith as "Annexure-A". 9. NUMBER OF BOARD MEETING During the year the Board of Directors met 10 times. The details of the board meetings are provided in Corporate Governance Report. 10. DIRECTORS' RESPONSIBILITY STATEMENT To the best of their knowledge and belief and according to theinformation and explanations obtained by them, your Directors make the following statements in terms of Section 134(3)(c) of the Companies Act, 2013: a. that in the preparation of the annual financial statements for the year ended March 31, 2015, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any; b. that such accounting policies have been selected and applied consistently and judgment and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2015 and of the profit of the Company for the year ended on that date; c. that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safe guarding the assets of the Company and for preventing and detecting fraud and other irregularities; d. that the annual financial statements have been prepared on a going concern basis e. that proper internal financial controls were in place 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 place and were adequate and operating effectively. 11. AUDITORS A. Statutory Auditors The Company's Auditors, M/S. NAIMISH N. SHAH & CO., Chartered Accountant, Ahmedabad who retire at the ensuing Annual General Meeting of the Company are eligible for reappointment.They have confirmed their eligibility under Section 141 of the Companies Act, 2013 and the Rules framed there under for reappointment as Auditors of the Company. As required under Clause 49 of the Listing Agreement, the auditors have also confirmed that they hold a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India. B. Secretarial Audit 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 has appointed CS Zalak Dodiya, Practicing Company Secretary, to undertake the Secretarial Audi t of the Com pany. The Secretarial Audit Report is annexed herewith as"Annexure -B". Report for qualification Remark in Secretarial Audit Report: Though, the Company has not given intimation for trading window closure as required under clause 3.2.1 of the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 1992 during the year under review, It is hereby clarified that the Company has complied with SEBI (Prohibition of Insider Trading) Regulations, 2015 and adopted Code of Conduct for Prohibition of Insider Trading and keep in adherence with the same. However Directors or promoters of the Company have not traded in securities of the Company during the year under review. 12. TRANSFER TO RESERVES It is proposed to transfer Rs. 374.06 Lacs to reserves out of the profits earned during FY 2014-15. 13. FIXED DEPOSITS The Company has not accepted or renewed any deposits during the year. There are no outstanding and overdue deposits as at 31st March, 2015. 14. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186 Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements. 15. RELATED PARTY TRANSACTIONS All related party transactions that were entered into during the financial year were on an arm's length basis and were in the ordinary course of business. There were no materially significant related party transactions made by the Company with Promoters, Di rectors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large. 16. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS There are no significant material orders passed by the Regulators /Courts which would impact the going concern status of the Company and its future operations. 17. CORPORATE SOCIAL RESPONSIBILITY In today's world Corporate Social Responsibility is a very important and dominant concept for external environment. Every year 5th June is observed as the World Environment Day around the world and is of immense importance for the Taj Group. In the year 2011-12, "THE GATEWAY HOTEL UMMED" has obtained Earth Check Silver certification from Earth Check, on International Environment body. The same certificate is renewed during the year 2014-15. It is about creating wealth for all our stakeholders, embracing diversity, minimizing resource consumption and reducing our greenhouse gas emissions. We provide healthy and hygienic food to our valuable customers. Customer satisfaction is our motive. This is a commitment to safeguard the health and safety of our employees and neighbors, to support the local economy and to treat our staff fairly. However, we recognise that we will have to be innovative and draw on our key strength in order to deliver the lasting positive outcomes that are at the core of our commitment to sustainability of the Hotel. Even our motivated staff - are also very conscious about the environment protection concept and to support environment protection concept, all staff members of "THE GATEWAY HOTEL UMMED" are strictly participating in No Vehicle Day by at least once in a month. 18. BUSINESS RISK MANAGEMENT The Company has laid down a Risk Management Policy and identified threat of such events which if occurs will adversely affect either /or, value to shareholders, ability of company to achieve objectives, ability to implement business strategies, the manner in which the Company operates and reputation as "Risks". Further such Risks are categorized in to Strategic Risks, Operating Risks & Regulatory Risks. A detailed exercise is carried out to identify, evaluate, manage and monitoring all the three types of risks. 19. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations. During the yearunder review, the company retained external audit firm to review its existing internal control system with a view of tighten the same and introduce system of self-certification by all the process owners to ensure that internal controls over all the key business processes are operative. The scope and authority of the Internal Audit (IA) functionis defined in the Internal Audit Charter. The Internal Audit Department monitors and evaluates the efficacy and adequacy of internal control system in the Company, its compliance with operating systems, accounting procedures and policies at all locations of the Company and its subsidiaries. Based on the report of internal audit function, process owners undertake corrective action in their respective areas and thereby strengthen the controls. Sig ni fi cant audi t observations and corrective actions thereon are presented to the Audit Committee of the Board. 20. VIGIL MECHANISM / WHISTLE BLOWER POLICY The Company has a vigil mechanism named Whistle Blower Policy to deal with instances of fraud and mismanagement, if any. The details of the Whistle Blower Policy is explained in the Corporate Governance Report and also posted on the website of the Company. 21. EMPLOYEE RELATIONS Employee relations throughout the Company were harmonious.The Board wishes to place on record its sincere appreciation of the devoted efforts of all employees in advancing the Company's visionand strategy to deliver good performance. 22. CORPORATE GOVERNANCE REPORT AND MANAGEMENT DISCUSSION & ANALYSIS: The Company has been proactive in the following pri nciples and p ractices of good corporate governance. A report in line with the requirements of Clause 49 of the listing agreement on Management Discussion and Analysis and the Corporate Governance practices followed by the Company and the Auditors Certificate on Compliance of mandatory requirements are given as an "Annexure "C & D" respectively to this report. Your Company is committed to the tenets of good Corporate Governance and has taken adequate steps to ensure that the requirements of Corporate Governance as laid down in Clause 49 of the Listing Agreement are complied with. As per Clause 49 of the Listing Agreement with the Stock Exchanges,the Corporate Governance Report, Management Discussion and Analysis and the Auditor's Certificate regarding compliance of conditions of Corporate Governance are attached separately and form part of the Annual Report. 23. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTIONAND FOREIGN E XCHANGE EARNINGS AND OUTGO The informati on on conservati on of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3)(m) of the Companies Act, 2013 read with Rule, 8 of The Companies (Accounts) Rules, 2014, is annexed herewith as"Annexure-E". 24. PARTICULARS OF EMPLOYEES None of the employees of the Company drew remuneration of Rs. 60,00,000/- or more per annum / Rs. 5,00,000/- or more per month during the year. Hence, no information is required to be furnished as required under Rule, 5(2) and 5(3) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. 24. ACKNOWLEDGMENT Your Directors thank the various Central and State Government Departments, Organizations and Agencies for the continued help and co-operation extended by them. The Directors also gratefully acknowledge all stakeholders of the Company viz. customers, members, dealers, vendors, banks and other business partners for the excellent support received from them during the year. The Directors place on record their sincere appreciation to all employees of the Company for their unstinted commitment and continued contribution to the Company. By Order of the Board of Directors U. Champawat Chairman & Managing Director (DIN-00294184) Place : Ahmedabad Date : 14th August, 2015 |