James Hotels Ltd Directors Report.

TO THE SHAREHOLDERS

This is to apprise the members that the Honble National Company Law Tribunal (NCLT) Chandigarh bench has ordered the commencement of the corporate insolvency resolution process in respect of your company on 27h April 2017. Accordingly the powers of the Board of directors suspended pursuant to section 17(1)(b) of the insolvency and Bankruptcy Code and Mr. Navneet Gupta was appointed as Interim Resolution Professional vide order dated 8" May, 2017 for the management of the affairs of the company.

In view of the above mentioned provisions of the law, since the powers of the Board stands suspended thereunder, the Directors Report which is required to be presented by the Board of Directors under Section 134(3) of the Companies Act, 2013 is not being presented. However, a report of the management containing the details and information as available to be disclosed in the Directors Report to the shareholders is being presented to you by Resolution Professional.

Further Resolution Professional is not responsible for any non compliance for the period under review.

Accordingly, Report for the year ended 31st March, 2017 is as under.

FINANCIAL RESULTS

(Rs. In Lacs)

Particulars 2016-2017 2015-2016
Total Revenue 1868.98 2052.87
Total Expenses 4196.10 4062.37
Profit or Loss before Exceptional and Extraordinary items and Tax (2327.12) (2009.50)
Less: Exceptional Items 24.02 -
Less: Extraordinary Items - -
Profit or Loss before Tax (2303.10) (2009.50)
Less: Current Tax / Previous Year Tax expense 0.14 0
Deferred Tax - -
Profit or Loss After Tax (2303.24) (2009.50)
Earning Per Share
Basic (28.79) (25.12)
Diluted (28.79) (25.12)

REPORT ON PERFORMANCE: The year under review has been quite challenging. The revenue from the operations of the Company was Rs. 1761.97 Lakhs representing fall of 9.69% over the previous year. The company was not able to pay its debts and has defaulted in repayment of loans to the banks and financial institutions. The company was also declared as NPA by the banks. During the year the Punjab National Bank also tried to take the possession of the companys unit with the help of local administration. But the order of the same was stayed by Honble High Court. Thereafter the Punjab National Bank has initiated Insolvency Proceedings against the company under the Insolvency and Bankruptcy Code, 2016 and currently the company is under going Corporate Insolvency Resolution Process.

DIVIDEND: Owning to the losses incurred by the Company during the year, no dividend is being declared for the financial year ending 2016-17.

SHARE CAPITAL: There was no change in the Share Capital of the Company during the year.

GENERAL RESERVES: No amount was transferred to the General Reserve during the year.

TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND: The provisions of Section 125(2) of the Companies Act, 2013 do not apply to the Company as there were no amounts due to be transferred to the fund during the year under review.

DETAILS OF THE PERFORMANCE OF THE SUBSIDIARY/ASSOCIATE OR JOINT VENTURE: The Company does not have any Subsidiary/Joint Ventures/ Associate Companies. Hence, the provisions regarding incorporation of a separate segment for disclosure of the financial positions and performance of the Subsidiary, Associate and Joint Venture companies is not applicable to the company

EXTRACT OF THE ANNUAL RETURN: Extract of the annual return as provided under sub-section (3) of section 92 in form MGT-9 is enclosed as per Annexure-I

NUMBER OF MEETINGS OF THE BOARD: During the year under review, Seven (7) meetings of the Board of Direetors of the Company, 4. meetings of the Audit Committee were held during the year.

COMPOSITION OF THE AUDIT COMMITTEE: In compliance with the provisions of Section 177 of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has constituted an Audit Committee for the financial year ending 2017.

DIRECTORS RESPONSIBILITY STATEMENT

Statement referred to in clause (c) of sub-section (3) of Section 134 of Companies Act, 2013;

(a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(b) the directors had selected such accounting policies 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 and loss of the company for that period;

(c) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

(d) the directors had prepared the annual accounts on a going concern basis; and

(e) the directors, had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively.

Explanation.—For the purposes of this clause, the term "internal financial controls" means the policies and procedures adopted by the company for ensuring the orderly and efficient conduct of its business, including adherence to companys policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information;

(f) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

FRAUDS REPORTED BY STATUTORY AUDITORS

During the financial year under review, the statutory auditors have not reported any frauds under sub section (12) of Section 143 of the Companies Act, 2013 other than those which were reportable to the Central Government. Though the auditors

DECLARATION OF INDEPENDENCE GIVEN BY INDEPENDENT DIRECTORS

As per the information available the declaration from independent directors have not been received.

EXPLANATIONS OR COMMENTS BY THE BOARD ON EVERY QUALIFICATION, RESERVATION OR ADVERSE REMARK OR DISCLAIMER MADE:

(g) by the auditor in his report; and

The Statutory Auditors of the Company, M/s Vasudeva & Associates, Chartered Accountants, have submitted the Auditors Report which has observation on Financial Statements for the period ended March 31, 2017. They have given adverse remarks/ qualifications regarding the working of the company. The auditors report is attached with the annual report for members perusal. All these matters relates to the previous financial year when the suspended board of directors were managing the affairs of the company. The Committee of creditors have been apprised of the adverse remarks/qualifications. The qualifications are also reflected in Information Memorandum which is shared with the potential Resolution Applicants for their consideration before giving any Resolution Plan.

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 B. Sehgal & Associates, Company Secretaries to undertake the Secretarial Audit of the Company. Secretarial Auditors Report is annexed with this report. They have given their report along with observations/ qualification which is pertaining the period when the suspended Board of Directors were controlling the affairs of the company. COC has been apprised of the observations/qualification of the Secretarial Auditor. The remedial measure are being taken for the same.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186:

During the year under review the company has not given any loan or guarantee or made any investment in the securities of any other body corporate.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES REFERRED TO IN SUB-SECTION (1) OF SECTION 188:

In line with the requirements of the Act and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has formulated a Policy on Related Party Transactions and the same is posted on the Companys Website : www.jameshotels.co.in .

There are no contracts or arrangements with related parties entered into by the Company as referred to in Section 188( 1) of the Companies Act, 2013 for the financial year 2016- 17

MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY WHICH HAS OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR OF THE COMPANY TO WHICH THE FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT:

Insolvency proceedings have been initiated against the company upon the application of Punjab National Bank. The NCLT has appointed Mr. Navneet Gupta as an Interim Resolution Professional (1RP) for the management of the affairs of the Company in the ensuing financial year who was appointed as resolution professional by committee of creditors. Pursuant to the provisions of Section 17(1)(b) of the Code, the powers of the Board of Directors stand suspended and are being exercised by the RP. He is making best efforts to come out with the resolution plan for the revival of the company..

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

The details of conservation of energy, technology absorption, foreign exchange earnings and outgo are as follows:

a) Energy Conservation Measures Taken

The company is engaged in hospitality industry. The Unit has made efforts to improve energy usage and increase contributions from renewable sources of energy. Some of the measures adopted by the Company are as follows :

1. Improvement in energy usage efficiencies of lighting systems by changing over to higher efficiency lighting solutions such as Light Emitting Diodes and increased daylight harvesting systems.

2. Reduction in lighting and air conditioning loads by installation of automated controls & sensors.

3. Installation of solar based power plants in the unit.

4. Install variable frequency drives to match output drives to changing load patterns and thereby optimize energy consumption.

5. Reuse of STP water for the gardening purpose.

6. 5 Kg Electrical Steam Boiler is used in emergency Guest Laundry to avoid excess diesel consumption.

Energy conservation measures taken have resulted in savings in energy costs and helped partially offset the inflationary trend in fuel/ electricity.

b) Power and Fuel Consumption:

1. Electricity:
a) Purchased Units - 2250280
Total Amount (Rs.) - 14495249
Rate per Unit (Rs.) 6.44
b) HSD consumed for Boilers - 9612
Total Cost - 508811
2. Coal:
Quantity (KG) - 29339
Total Cost (Rs.) - 704136
Average Rate (Rs. Per KG) 24
3. LP Gas:
Quantity - 781
Total Cost (Rs. In Lakhs) 792980
Average Rate per cylinder 1015.34

TECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATION

The Company continues to use the latest technologies for improving the productivity and quality of its services and products.

FOREIGN EXCHANGE EARNINGS AND OUTGO

The Particulars regarding the Foreign Exchange Earnings and Outgo is given below:

31st March, 2017 31st March, 2016
Rs. In Lacs Rs. In Lacs
EARNINGS
a) Earnings in Foreign currency Room Rent. Banquets & other income 69.43 86.18
Total Earnings 69.43 86.18
EXPENDITURE
a)CIF Value of Imports 00.00 00.00
b)Expenditure in Foreign currency -Travelling & Conveyance (Directors) 5.55 7.28
- Commission , Rebate & Discount 2.95
Total Expenditure 5.55 10.23

STATEMENT INDICATING DEVELOPMENT AND IMPLEMENTATION OF A RISK MANAGEMENT POLICY FOR THE COMPANY INCLUDING IDENTIFICATION THEREIN OF ELEMENTS OF RISK, IF ANY, WHICH IN THE OPINION OF THE BOARD MAY THREATEN THE EXISTENCE OF THE COMPANY:

Your Company is facing risks of different types all of which need different approaches for mitigation. Details of various risks faced by the Company are provided in the Management Discussion & Analysis. Pursuant to the provisions of Section 134 of the Companies Act, 2013, the Company has adopted a Risk Management Policy which has a framework to identify and evaluate business risks and opportunities. Presently company is facing the huge financial crunch and insolvency proceedings have been launched against the company.

DETAILS ABOUT THE POLICY DEVELOPED AND IMPLEMENTED BY THE COMPANY ON CORPORATE SOCIAL RESPONSIBILITY INITIATIVES TAKEN DURING THE YEAR:

The provisions of section 135 of the Companies Act 2013 regarding Corporate Responsibility Policy are not applicable to the company.

FIXED DEPOSITS

No Fixed deposits were accepted by the Company during the year under review. PARTICULARS OF EMPLOYEES

The information required pursuant to Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company is appended as Annexure - II to the Boards Report.

The Company does not have any employee whose particulars are required to be furnished under Section 197(12) of the Companies Act, 2013, read with Rule 5(2) of Companies (Appointment and Remuneration of Managerial Personnel)Rules, 2014.

The Remuneration paid to all Key Managerial Personnel is in accordance with remuneration policy adopted by the Company.

AUDITORS

M/s Bansal Vijay & Associates, Chartered Accountants, were proposed to be appointed as Statutory Auditors of the company to hold office from the conclusion of this Annual General Meeting till the conclusion of the Annual General Meeting of the Company to be held in 2022 as per the provisions of Section 139 of the Companies Act, 2013. The auditors have confirmed that their appointment, if made, would be within the limits prescribed under the Act

OTHER MATTERS & DISCLOSURES

1) CHANGE IN THE NATURE OF BUSINESS, IFANY:

Not applicable

2) DETAILS OF DIRECTORS OR KEY MANAGERIAL PERSONNEL WHO WERE APPOINTED OR HAVE RESIGNED DURING THE YEAR:

During the year Mr. Amrit Pal Bedi, Director of the Company tendered his resignation from the office of Director and ceased to be the Director of the Company with effect from 01/10/2016. Further, Ms. Ronica Bedi, was appointed as Additional Director (Independent) of the Company with effect form 14/11/2016. She also tendered here resignation in the ensuing year along with Mr. Neeraj Mohinderoo.

3) NAMES OF COMPANIES WHICH HAVE BECOME OR CEASED TO BE ITS SUBSIDIARIES, JOINT VENTURES OR ASSOCIATE COMPANIES DURING THE YEAR:

Not applicable.

4) DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANYS OPERATIONS IN FUTURE:

The NCLT has appointed Mr. Navneet Gupta as an Interim Resolution Professional (1RP) for the management of the affairs of the Company. Pursuant to the provisions of Section 17(1)(b) of the Code, the powers of the Board of Directors shall stand suspended and be exercised by the IRP.

5) DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS

The Company has an Internal Control system commensurate with the size, scale and complexity of its operations. The scope and authority of the Internal Audit function is well defined in the organization. To maintain its objectivity and independence, the Internal Auditor reports to the Chairman of the Audit Committee of the Board.

BOARD EFFECTIVENESS

The Company has adopted the Governance guidelines which, inter alia, cover aspects related to composition and role of the Board, Chairman and Directors, Board diversity, definition of independence, Directors term and Committees of the Board. It also covers aspects relating to the nomination, appointment, induction and development of Directors, Director remuneration, code of conduct. Board Effectiveness Review and mandates of Board Committees.

A. Criteria adopted for the appointment of Directors : The RNC is responsible for developing competency requirements for the Board level. The RNC reviews and meets the potential candidates, prior to recommending their nomination to the Board. The RNC has formulated the criteria for determining qualifications, positive attributes and independence of Directors in terms of provisions of Section 178(3) of the Act and SEBI Listing Regulations. The criteria for appointment of directors is based upon Independence and Competency level.

B. Remuneration Policy : The Company has adopted a Remuneration Policy for the Directors, KMP and other employees, pursuant to the provisions of the Act and SEBI Listing Regulations. The key principles for the remuneration of Independent Directors is that the Independent Directors may be paid sitting fees for attending the meetings of the Board and of Committees of which they may be members. The key principles governing the Companys remuneration policy for the Managing Director/ Executive Directors/ Key Managerial Personnel/ rest of the employees are as follows:

• The extent of overall remuneration should be sufficient to attract and retain talented and qualified individuals suitable for every role. Hence, remuneration should be market competitive, driven by the role played by the individual, reflective of the size of the Company, complexity of the sector/ industry/ Companys operations and the Companys capacity to pay.

• The Company provides a fixed remuneration to MD subject to limits prescribed under Section II of Part - II of Schedule V of the Companies Act, 2013 and to the other key Managerial Personnel.

C. Board Evaluation : The Board of Directors has carried out an annual evaluation of its own performance, Board Committees and Individual Directors pursuant to the provisions of the Act and the Corporate Governance requirement as prescribed under SEB1 (Listing and Disclosure Requirements) Regulations, 2015.

The performance of the Board was evaluated by the Board after seeking inputs from the Directors on the basis of the criteria such as the Board Composition and structures, effectiveness of Board processes, information and functioning, etc.

The performance of the Committees was evaluated by the Board after seeking inputs from the Committee members on the basis of the criteria such as the Composition of the Committees, effectiveness of committee meetings, etc.

The Board and the Remuneration and Nomination Committee 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 key aspect 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, taking into account the views of the 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 perfonnance of the Board, its Committees and Individual Directors was also discussed.

Familiarization Programme For Independent Directors

The Company keeps its Directors informed of the activities of the Company, its management and operations and provides an overall industry perspective as well as issues faced by the industry. The familiarization programme adopted by the Company is posted on the website of the Company i.e.

Managerial Remuneration:

Statistical disclosures pursuant to Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is enclosed as Annexure- II.

Disclosures about Cost Audit:

Provisions of Section 148 of the Companies Act, 2013 pertaining to the appointment of Cost Auditor are not applicable to the Company.

VIGIL MECHANISM:

The Company has adopted a Whistle Blower Policy to provide a vigil mechanism for the Directors and employees to report genuine concerns about any unethical, actual or suspected fraud or violation of the Companys code of conduct. The provisions of this policy are in line with the provisions of Section 177(9) of the Act and Regulation 22 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The Whistle Blower Policy can be accessed on the Companys website.

POLICY FOR PREVENTION OF INSIDERTRADING:

Pursuant to SEB1( Prohibition of Insider Trading) Regulations, 2015, the Company has framed a) Code of Conduct for Regulating and Reporting Trading by Insiders and b) Policy for Fair Disclosure of UPSI. The Companys Code, inter alia, prohibits purchase and/or sale of shares of the Company by an Insider, while in possession of unpublished price sensitive information in relation to the Company and also during certain prohibited periods.

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION & REDRESSAL) ACT, 2013

The Company has in place a Prevention of Sexual Harassment Policy in line with the requirements of the Sexual Harassment policy at the workplace (Prevention, Prohibition and Redressal) Act, 2013. An Internal Complaints Committee has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy.

ACKNOWLEDGEMENT:

Your Directors convey their sincere thanks to Banks and other concerned agencies for their continued support and co-operation extended to the Company from time to time.

Your Directors further express their deep appreciation for the contribution made by employees at all levels towards the growth of the Company.

BY ORDER OF RESOLUTION PROFESSIONAL
JAMES HOTELS LIMITED
Place: Chandigarh Navneet Gupta
Dated: 30.11.2017 Resolution Professional