REPORT OF THE DIRECTORS & MANAGEMENT DISCUSSIONS AND ANALYSIS FOR THE FINANCIAL YEAR ENDED 31st MARCH, 2015 Your directors have pleasure in presenting to you their period ended 31st March 2015 Twenty Second Annual Report together with the audited statement ofaccounts of the company forthe 12 months Transfers to Reserves: The entire profit has been retained by the company and nothing has been transferred to any specific Reserve and that, thereafter, a sum of Rs. 36.55 lakhs being written down value of certain assets was written off to the reserves and surplus account. STATE OF AFFAIRS OF THE COMPANY During the 12 months period ended 31st March, 2015 your company earned an all-inclusive revenue of Rs. 1393.02 Lakhs as against Rs. 1611.58 in the corresponding period during the preceding financial year reporting a decline of Rs. 218.56 lakhs (13.56%) as compared to the preceding financial year culminating into decline into net profit by 59.96% to Rs. 70.64 lakhs from Rs. 176.43 lakhs for the preceding year leading consequential fall of EPS to Rs. 0.64 from Rs. 1.60 during the preceding year. This downfall is a cumulative effect of a very weak demand coupled with excess supply of rooms and fierce competition with the mushrooming marriage gardens and halls in the unorganized and unregulated sector that prevailed during the year within the city of Bhopal. Due to phenomenal decline in the profitability and resulting inadequacy of liquid financial resources, the Company has not been able to implement its plan for addition of room inventory and continues to have whopping amount of unsecured loans. During the period under report, the net worth of the Company improved by Rs. 26.30 Lakhs only as against Rs. 229.48 Lakhs in the preceding financial year. DIVIDEND In view the inadequacy of profits and the company's needs for financial resources for financing inter-alia, its overdue room addition plan as well to repay the outstanding unsecured loan, your directors did not declare any dividend forthis yeartoo. SHARE CAPITAL: During the period under report, the authorized share capital of the company remained at its previous year level of Rs.2500.00 lakhs divided into 250, 00,000 Equity shares of Rs. 10/-each. The issued, subscribed and paid-up share capital of the Company too remained at its level of previous year at Rs. 1101.29 lakhs divided into 110,12,900 equity shares of Rs. 10/- each. The category-mix of the shareholdings and its distributions as at 31st March. 2015 have been as under: Distribution of shareholdings as at 31st day of March, 2015 based on number of holders in term of number and percentage has been given under the Report on Corporate Governance which forms a part of this Annual Report. LISTING: The Equity Shares of your Company are listed on the Bombay Stock Exchange Limited(BSE) and its security code is 532124. DIRECTORS' RESPONSIBILITY STATEMENT Pursuant to Section 134(5) of the Companies Act, 2013, the board of directors, to the best of their knowledge and ability, confirm that: (a) in the preparation of the annual accounts, the applicable accounting standards have been followed and there have been no material departures; (b) such accounting policies have been selected and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period; (c) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; (d) the Annual Accounts have been prepared on a going concern concept basis; (e) Internal financial Controls have been laid down to be followed by the Company and such internal financial controls are adequate and operating effectively; (f) Proper Systems have been devised to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively. Keeping in view the pattern of internal financial controls, compliance systems established and maintained by the Company, work performed by the internal, statutory and secretarial auditors and need-based reviews undertaken by management and the Audit committee, your Board is of the opinion that the Company's internal financial controls were adequate and effective during the financial year 2014-15. CHANGES IN DIRECTORS AND KEY MANAGERIAL PERSONNEL Change by resignation: During the period under report, Mr. Parkash Singh, one of the non-executives Directors 'of the Company, ceased to hold the office by resignation effective from 2nd day of February, 2015. Change by Appointments: Non-executive Director In term of requirements of 2nd proviso to sub-section (1) of Section 149 of the Companies Act, 2013, read with Rule (3) of the Companies (Appointment and Qualification of Directors) Rules, 2014 and pursuant to Section 161 of the Companies Act, 2013, read with Article 80 of the Articles of Association of the Company, effective from 30th March, 2015, Ms. Sanobar Bano ( DIN 07139513), one of the relatives of Mr. Sikandar Hafiz Khan, the Managing Director and one of the promoters of the Company, was inducted as an Additional Director.. Ms Sanober Bano shall hold the office till the date of the ensuing Annual General Meeting unless she is appointed as Director of the Company. The Company has received a requisite notice from one of the shareholders of the Company pursuant Section 160 of the Companies Act, 2013, proposing her candidature for appointment as Director to Retire by Rotation. Accordingly, a proposal tailored to the said notice is being brought up for your approval at the ensuing Annual General Meeting. Independent Directors: Pursuant to the provisions of Section 149 of the Companies Act 2013 Mr. Chandan Mitra (DIN 00037634), Mr. Abdul Tahir (00215129), and Mr. Ranjay K. Dawar (DIN 00016898) were appointed as independent directors at the 21st Annual General Meeting of the Company held on 24th day of December, 2014. The terms and conditions of appointment of independent directors are as per Schedule IV of the Act. They have submitted a declaration that each of them meets the criteria of independence as provided in Section 149(6) of the Act and there has been no change in the circumstances which may affect their status as independent director during the year. Retirement by Rotation In accordance with the provisions of Section 152 of the Act read with Article 86 and 87 of the Articles of Association of the Company, Mr. S. Shankar Narayanan, (DIN 00021561) will retire by rotation at the ensuing Annual General Meeting (AGM) of your Company and being eligible, offer himself for reelection as director . The Board of Directors of your Company recommended his re-election to the office of Director liable to retire by rotation. Accordingly, a proposal to this effect is being brought up for your approval at the ensuing Annual General Meeting In term of approval granted by you in the last Annual General Meeting of the Company held on 24th day of December, 2014, the tenure of Mr. S. Shankar Narayanan as an Executive Director of the Company was to determine effective from the 1st day of January, 2015. However, based on the recommendations of Nomination & Remuneration Committee made in exigency of business and subject to your approval, your Board of Directors find it expedient to extend his tenure again for a duration from 1st day of January, 2015 to 15th day of December, 2015. According a proposal to this effect is also being brought up for your approval in the ensuing Annual General Meeting of the Company. Key Managerial Personnel During the year there was no change in the Key Managerial Personnel of your Company. NUMBER OF MEETINGS OF THE BOARD During the Financial year under report, the Board of your company met for Four times and the relevant details are available in the chapter containing "Corporate Governance Report" which forms part of this report. BOARD EVALUATION The performance of the Board as a whole, its independent, executive and pone executive directors has been carried out in term and based on criteria specified in the formal Performance Evaluation policy approved by the Board. The details in the matter of evaluation criteria, process etc. is given in the Corporate Governance part of this report. 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, taking into account the views of executive directors and non-executive directors. 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 ETC. The Company's policy on directors' appointment and remuneration and other matters provided in Section 178(3) of the Act has been disclosed in the corporate governance report, which forms part of the directors' report INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY Internal financial controls of the company are tailored to its size and the nature of its operations aimed at providing reasonable assurance respecting recording and providing reliable financial and operational information, complying with applicable laws, safeguarding assets from unauthorized use, executing transactions under proper authorization and compliance of internal policies. The system is manned by a full time professional accountants and IT experts. The Audit' committee deliberates with the members of the management, and statutory auditors of the company as to the appropriateness the system laid down and carry out need-based review thereof to conform to the requirements of the Company satisfies itself of the adequacy and effectiveness of the system .The Committee also keeps the board of directors informed accordingly. In view of this, your board is of view the control system is effective and optimum. COMMITTEES OF THE BOARD In term of requirements of the Companies Act, 2013 and the clause 49 of the Listing Agreement, the Company has constituted five committees namely Audit Committee, Nomination and Remuneration Committee, Stake Holders Committee, Risk Management Committee, Internal Complaint Redressal committee. The details respecting term of references, members etc. are given under the Corporate Governance report that forms part of this Annual report. AUDITORS Pursuant to the provisions of Section 139 of the Act and the rules framed there-under, M/s. MAK & Associates, a firm of Chartered Accountants holding firm registration NO.3060-C, was reappointed as statutory auditors of the Company to hold the office from the conclusion of the 21st annual general meeting (AGM) of the Company held on 24th December, 2014 till the conclusion of 22nd AGM of the Company. Keeping in view the sufficiently prolonged tenure the firm M/s. MAK & Associates have had with your Company and in line with the provisions of Section 139(2) of the Companies Act, 2013, your company finds it expedient to replace them by any other competent firm of Chartered Accountants. Accordingly, in term of Section 139(2)ofthe Companies Act. M/s. Parekh Shah & Lodha a firm of Mumbai based chartered accountants having registration No. 107487W, and who have confirmed their eligibility and brought on the record of the company required declarations and undertakings is proposed to be appointed as the Statutory Auditor's of the Company to hold the office as such from the Conclusion of 22nd Annual General Meeting to the 27th AGM of the Company subject to the ratification of the appointment by the members in each annual general meeting on the terms & conditions and payment of fee on yearly basis as may be approved by the Board of Directors of the Company. AUDITORS' REPORT AND SECRETARIAL AUDITORS'REPORT The Report of the Statutory Auditors M/s. MAK & Associates,Chartered Accountants, and the Secretarial Audit Report in term of Section 204 of the Companies Act, 2013, forthe Secretarial Audit carried out by M/s. Baldev Dudea, Company Secretaries do not contain any qualifications, reservations or adverse remarks. The Report of the secretarial auditor is given as an Annexure-A forming part of this report RISK MANAGEMENT The Board of the Company has approved the Risk Management policy in its meeting held on 2nd February, 2015 and also formed a Risk Management Committee (RMC) to implement and monitor the risk management plan forthe Company. The development and implementation of RMC has been covered in the Management Discussion And Analysis, which forms part of this report. PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS During the period under report, the Company has not given any loans, guarantees and made investment. This aspect has been disclosed in the auditors report and financial statements. TRANSACTIONS WITH RELATED PARTIES None of the transactions with related parties falls within the purview of Section 188(1) of the Act and therefore . Accordingly, no transactions are being reported in Form No. AOC-2 in terms of Section 134 of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014. Other transactions with related parties pursuant to Section 134(3)(h) of the Act read with rule 8(2) of the Companies (Accounts) Rules, 2014 are entered into on an armed length basis and details of which is given in Annexure- A to the report oftheAuditors Your Company's Policy on Related Party Transactions, as approved by your Board, can be accessed on the website of the Company at "noorussabahpalace.com " CORPORATE SOCIAL RESPONSIBILITY During the year under report, your company did not fall within the category of companies measured in term of level of net worth, turnover and profitability criteria prescribed for attaching obligation of formulation of Corporate Social Responsibility (CSR) Policy and constitution of CSR Committee prescribed under Section 135 of the Companies Act, 2013, read with CSR Rules framed there under and that, therefore the said obligation does not apply to your company. Hence your company has nothing to report about CSR matters. EXTRACT OF ANNUAL RETURN As provided under Section 92(3) of the Act, the extract of annual return is given in Annexure-B to this report in the prescribed Form MGT-9, which forms part of this report. PARTICULARS OF EMPLOYEES IN TERM OF SECTION 197 OF THE COMPANIES ACT, 2013 Disclosure in term of Section 197 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is attached to this report as Annexure-C to this report. During the financial year under report , the Company does not have on its roll any employee who was employed through out the year and was in receipt of remuneration aggregating to Rs. 60.00 lakhs or more or was employed for part of the year and was in receipt of remuneration aggregating to Rs. 5.00 lakhs per month. Hence, the information required under Section 197(12) of the Act read with rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is nil.. MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION OF THE COMPANY During the intervening period from the date of Financial Statement and the date of signing this report, there has been no material changes and Commitment affecting financial position of the Company. DETAILS OF MATERIAL ORDERS ETC. IN TERM OF SECTION 134(q) READ WITH COMPANIES (ACCOUNTS) RULES, 2014. During the financial year under report, there are no significant or material orders passed by regulator, court or tribunal impacting the going concern status of the Company or its future operations. The Financial statements of the Company for the year under report have been compiled based on going Concern Concept OTHER STATUTORY STAEMENTS Conservation of Energy and technology adoption: As the Company's operations do not involve any manufacturing or processing activities, the particulars as per Section 134 of the Companies Act, 2013, Companies (Disclosures of Particulars in the Report of the Board of Directors) Rules, 1988 regarding conservation of energy and technology absorption, are not applicable. Earning and out go in foreign exchange: During the financial year under report your company earned Foreign Exchange equivalent to Indian Rupees 9.30 lacs as against Rs. 1031 lacs during the preceding financial year and like preceding year, during the year under report nothing is expended in foreign exchange at all. Public Deposits: Your Company has not accepted any deposit from the Public/members under Section 73 of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014 during the year Compliance with Clause 49 of the Listing Agreement - Corporate Governance The certificate of the Auditors, MAK & Associates, Chartered Accountants, Indore confirming compliance of conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges in India, is annexed. ACKNOWLEDGEMENTS: Your Directors are pleased to place on record their grateful and sincere thanks for excellent support and co-operation your company received from the Ministry of Tourism, Govt, of India and Department of Tourism of Govt, of Madhya Pradesh, banks and other government bodies and we look forward to their continued support and patronage in future. Your Directors wish to record their appreciation of the excellent efforts put in by the executives and staff at all levels which culminated into creation of better financial and operational performance record for the company and hope that this trend would be kept even during the ensuing years Sikandar Hafiz Khan Chairman & Mg. Director. Bhopal: 24/8/2015 |