DIRECTORS' REPORT Dear Shareholders, Your Directors are pleased to submit 50th Annual Report of Viceroy Hotels Limited (VHL) along with the audited financial statements for the Financial Year ended 31st March, 2015. Consolidated performance of the Company and its subsidiaries has been referred to wherever required. DIVIDEND The Board does not recommend any dividend for the Financial Year 2014-15. SUBSIDIARIES The Company has 4 subsidiaries as on 31st March, 2015. There has been no material change in the nature of the business of the subsidiaries. Cafe D Lake Private Limited: M/s Cafe D'Lake Private Limited which operates all the restaurants businesses of Minerva Coffee-shop, Blue Fox Bar & Restaurant, Eat Street and Water Front has achieved a turnover of Rs.32.49 Crores for the year ended 31st March, 2015 as against Rs.30.82 Cores for previous year. The Net profit for the year ended 31st March, 2015 is Rs.0.20 Crores as against Rs.0.57 Crores in the previous year. New Restaurants under the brand names Minerva & Blue Fox have been launched during the months of April & May 2015 respectively at Madhapur, Hyderabad. Crustum Products Private Limited: During the year under review, there is no income from operations. The Net loss for the year ended 31st March, 2015 is Rs.1.22 as against net loss of Rs. 2.21 Crores in the Previous Year. Viceroy Chennai Hotels & Resorts Private Limited: Viceroy Chennai Hotels & Resorts Private Limited has no operations commenced as on date. Minerva Hospitalities Private Limited: Minerva Hospitalities Private Limited has not commenced operations as on date. – Director's Report POLICY ON MATERIAL SUBSIDIARIES Policy for determining material subsidiaries of the Company is available on the website of the Company (URL: www.viceroyhotels.com/IR ). ASSOCIATE Viceroy Bangalore Hotels Private Limited Viceroy Bangalore Hotels Private Limited is the Associate Company of "Viceroy Hotels Limited". Status of' Bangalore Hotel Project' As far as the Bangalore Hotel Project "Renaissance" is concerned, it is a joint venture between J. P. Morgan having 60% stake and Viceroy Hotels Ltd. having 40% stake. Viceroy Bangalore Hotels Private Limited is formed for taking up the Bangalore Hotel Project under the joint venture arrangement. The project work is almost at nearing stage as all the civil works are completed and interiors of rooms and public areas and the mechanical works/ installation of P&M is are almost at the finishing stage. The hotel is situated in a very prime location in Bangalore i.e. opposite to Race Course. It is a big project with 23floorsand has 277 guest rooms,a three-meal restaurant, bar lounge multifunction banquet halls, large function lawn and a large multi-cuisine restaurant on the top most floor of the hotel with a breath taking view of the city. FINANCIAL INFORMATION ABOUT SUBSIDIARIES AND ASSOCIATE COMPANIES Pursuant to First Proviso to Sub-section (3) of Section 129 of the Companies Act, 2013 read with Rule 5 of The Companies (Accounts Rules) 2014, a statement containing summary of Financial information of Subsidiaries and Associate Companies is provided in "Form AOC-I" as Annexure-I to this report. As per the provisions of section 136 of the Companies Act, 2013 the financial statements of the Company, consolidated financial statements along with relevant documents and separate audited accounts in respect of subsidiaries, are available on the website of the Company. DIRECTORS Pursuant to the provisions of Section 149 of the Companies Act, 2013, Mr. K. Narasimha Rao, Mr. A. Poornachandra Rao and Mr. P. Narendra were Re-appointed as Independent Directors at the 49th Annual General Meeting of the Company held on September 26,2014. The terms and conditions of appointment of independent directors are as per Schedule IV of the Companies Act, 2013. They have submitted a declaration that each of them meets the criteria of independence as provided in Section 149(6) of the Companies Act, 2013 and there has been no change in the circumstances which may affect their status as independent director during the year. Mr. A. Vijyayavardhan Reddy retired by rotation and being eligible, he was re-appointed by the shareholders in 49th Annual General Meeting held on September 26, 2014. However, he resigned from the office with effect from October 1, 2014. Mrs. P. Kameswari, has been appointed as an Additional director on March 27, 2015 and shall hold the office up to ensuing Annual General meeting. Your Company is in receipt of notice under section 160 of the Companies Act, 2013for her appointment as Director of the Company. In accordance with Section 152 of the Companies Act, 2013, Mr. P. Chakradhar Reddy, Directorof the Company retires by rotation in the ensuing Annual General Meeting to be held on September 29,2015 and being eligible, offered himself forre-appointment. DIRECTORS'RESPONSIBILITYSTATEMENT Pursuant to the requirement under Section 134(5) of the Companies Act, 2013 with respect to Directors' Responsibility Statement, it is here by confirmed that: i. In the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures; ii. Such accounting policies as mentioned in the notes to the financial statements have been selected and applied consistently and judgments and estimates that are reasonable and prudent made so as to give a true and fair view of the state of affairs of the Company at the end of the financial year 2014-15 and of the profit or loss of the Company for that period; iii. 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 safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; iv. The annual accounts for the year 2014-15 have been prepared on a going concern basis. v. Those proper internal financial controls were in place and that the financial controls were adequate and were operating effectively. vi. That systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively. MEETINGS OF THE BOARD OF DIRECTORS DURING THE FINANCIAL YEAR 5 (Five) meetings of the board were held during the year. For details of the meetings of the board, please refer to the corporate governance report, which forms part of this report. BOARD EVALUATION The Board and the Nomination and Remuneration Committee ("NRC") reviewed the performance of the individual directors on the basis of the criteria such as the contribution of the individual director to the Board and committee meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings etc. In addition, the Chairman was also evaluated on the keya spects of his role. In a separate meeting of independent Directors, performance of non-independent directors, performance of the board as a whole and performance of the Chairman was evaluated The same was discussed in the board meeting that followed the meeting of the independent Directors, at which the performance of the Board, its committees and individual directors was also discussed. POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION AND OTHER DETAILS The Company's policy on directors' appointment and remuneration and other matters provided in Section 178(3) of the Companies Act, 2013 has been disclosed in the corporate governance report, which forms part of this report. INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY The details in respect of internal financial control and their adequacy are included in the Management Discussion & Analysis, which forms part of this report. AUDIT COMMITTEE The details pertaining to composition of audit committee are set out in the in the Corporate Governance Report, which forms part of this report. STATUTORY AUDITORS Pursuant to the provisions of Section 139(2) of the Companies Act, 2013 and all other applicable provisions and rules made there under, M/s. P.Murali & Co, Chartered Accounts, Hyderabad, has been appointed by the Shareholders of the Company in their 49th Annual General Meeting held on September 26, 2014, for a period of three years (i.e. till the conclusion of 52nd Annual General Meeting) subject to the ratification at every subsequent Annual General Meeting held during the above period. Hence, the shareholders will ratify the appointment of Statutory Auditors till the conclusion of 51st Annual General Meeting. AUDITOR'S OBSERVATIONS Point No.vii (a): Company serious pursuing and in the process to clear outstanding TDS/WCT dues. Point No. ix: Company is making continuous efforts to re-pay the defaulted amounts to the banks through One Time Settlements. SECRETARIAL AUDIT Pursuant to the provisions of Section 204(1) of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, M/s. A. N. Sarma & Co, Company Secretaries; Hyderabad, has been appointed as Secretarial Auditors of the Company for the Financial Year 2014-15. The Secretarial Audit Report is annexed as Annexure VII to this report. INTERNAL AUDITOR Mr. J. Dashwant Kumar, who is also an employee of the Company is acting as Internal Auditor of the Company. PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS The particulars of loans, guarantees and investments under section 186 of the Companies Act, 2013, have been disclosed in the financial statements. PUBLIC DEPOSITS During the year under review, your Company has neither invited nor accepted any deposits from the public and as such, no amount on account of principal or interest on deposits from public was outstanding as on the date of the balance sheet. EMPLOYEE RELATIONS The relationship with the employees continues to be cordial. The Directors would like to place on record their appreciation of the services rendered by all the employees of the Company. ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO The information on conservation 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 provided as/under point Nos. 22 & 32 under notes to Accounts of Balance Sheet and Profit and Loss Account. 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. EXTRACT OF ANNUAL RETURN As provided under Section 92(3) of the Companies Act, 2013, the extract of annual return is given in Annexure VI in the prescribed Form MGT-9, which forms part of this report. LISTING The Equity Shares of your Company are listed on the BSE Limited and the National Stock Exchange of India Limited. It may be noted that there are no payments outstanding to the Stock Exchanges by way of Listing Fees etc. CORPORATE GOVERNANCE The Company has taken adequate steps to ensure that the conditions of corporate governance as stipulated in clause 49 of the listing agreement of the stock exchange are complied with. As per Clause 49 of the listing agreements entered into with the stock exchanges, corporate governance report with auditors' certificate thereon and management discussion and analysis are attached as Separate Annexure No. IV which forms part of this report. RISK MANAGEMENT The Board of the Company has formed a risk management committee to frame, implement and monitor the risk management plan for the Company. The Details about Risk Management Committee and Risk Management Policy are given in the Corporate Governance Report. FAMILIARISATION PROGRAM TO INDEPENDENT DIRECTORS Details of the familiarization program of the independent directors are available on the website of the Company (URL: <http://www.viceroyhotels.com/I> R) VIGIL MECHANISM AND WHISTLE BLOWER POLICY The details of Vigil Mechanism and Whistle Blower Policy are available under Corporate Governance Report which forms part of this report. TRANSACTIONS WITH RELATED PARTIES The details transactions with related parties falls under the scope of Section 188(1) of the Companies Act, 2013 are provided under Point No. 35 Notes to Financial Statements. However, information on transaction with related parties pursuant to Section 134(3)(h) of the Companies Act, 2013 read with rule 8(2) of the Companies (Accounts) Rules, 2014 are given in AOC -2 as Annexure- II and the same forms part of this report. POLICY ON RELATED PARTY TRANSACTIONS Policy on dealing with related party transactions is available on the website of the Company (URL: <http://www.viceroyhotels.com/IR>) INSIDER TRADING Pursuant to SEBI (Prohibition of Insider Trading) Regulations, 2015, the Code of Conduct and Code on Fair Disclosure and these code are available on the website of the company (URL: <http://www.viceroyhotels.com/IR>) ACKNOWLEDGEMENTS Your Directors acknowledge with gratitude and wish to place on record their sincere appreciation for the co-operation received by the Company from various Departments of Central/ State Government, SEBI, Stock Exchanges, RBI, MCA and other Regulatory Bodies for the continued co-operation and support extended during the year. Your Directors also express their sincere thanks to the Shareholders, Customers, Bankers, Suppliers and other Business Associates for their support, co-operation and confidence reposed in the management. By Order and on behalf of the Board For Viceroy Hotels Limited Sd/- P. Prabhakar Reddy Chairman Hyderabad August 14,2015 |