DIRECTORS' REPORT

TO

THE MEMBERS

We are pleased to present the Twenty Fifth Annual Report on our business and operations for the year ended 31st March 2015, of The Byke Hospitality Limited ("Company").

Dividend

The Board of Directors has recommended a dividend of 10%, i.e. Rs. 1.00 per share on equity share of Rs. 10/- each, subject to the approval of shareholders at the ensuing Annual General Meeting for the financial year ended March 31, 2015. The dividend would involve a cash outgo of Rs. 400.98 lakhs towards dividend and Rs. 80.17 lakhs towards tax on dividend.

The Register of Members and Share Transfer Books will remain closed from 21st September 2015 to 26th September 2015 (both days inclusive), for the purpose of payment of Dividend for the Financial Year ended March 31, 2015 and the Annual General Meeting. The Annual General Meeting is scheduled to be held on Saturday, 26th September 2015.

Transfer to Reserves

The company did not transfer any amounts to General Reserve during the year.

Bonus Shares

The Company, in October 2014, had issued Bonus Shares to the Shareholders of the Company in the proportion of 1:1 and consequently, the paid up share capital of the Company increased from 2,00,48,900 shares to 4,00,97,800 shares.

Operations and Financial Overview

Last year has been a landmark year for the Indian economy. Economic growth has started to move in upward trajectory. GDP grew by 7.3% in 2014­15, with signs pointing to a manufacturing and investment recovery. Inflation has also tapered which has led to cut down in interest rates. The new government's Budget 2015 showed government's commitment towards the tourism industry.

Byke continues to follow an asset light model across its both business segments. Byke has emerged as a well-known brand in the mid market tourism segment with high levels to quality and service. For FY15 revenues touched Rs. 182 crore in FY15 against Rs. 156 crore in the corresponding period of the previous year, registering a y-o-y growth of 17%. EBITDA stood at Rs. 37 crore (y-o-y growth of 28%), with EBITDA margin of 20%, up from 19% in FY14 and the Company reported PAT at Rs. 20 crore with PAT margin of 11%.

Expansion /Augmentation of Hotels

During the year, the Company acquired its first Hotel in the Business capital of the Country, "The Byke- Suraj Plaza" under its asset light business expansion plan. The Byke- Suraj Plaza offers the Highest Room Inventory in Thane city with multiple Food & Beverage outlet, Indoor- Outdoor Banqueting and modern Conferencing facilities. This Hotel shall commence commercial operation during the financial year 2015-16.   

Change in Depreciation Policy

With effect from April 1, 2014, the Company has revised the estimated useful lives of certain assets resulting in a write back of depreciation of Rs. 65.57 Lacs during the year. (refer Note 1(1.6) of Notes to Financial Statement).

Particulars of Loans, Guarantees or Investments

As on March 31, 2015, there were no outstanding loans or guarantees covered under the provisions of Section 186 of the Act. (Annexure A)

The details of changes in the Loans, Guarantees and Investments covered under the provisions of Section 186 of the Act are given in the notes to the Financial Statements.

Fixed Deposits

Your Company has not accepted any deposits within the meaning of Section 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014.

Particulars of Contract or Arrangement with Related Party

All Related Party Transactions entered during the year were in Ordinary Course of the Business and on Arm's Length basis. No Material Related Party Transactions, i.e. transactions exceeding ten percent of the annual consolidated turnover as per the last audited financial statements, were entered during the year by your Company. Accordingly, the disclosure of Related Party Transactions as required under Section 134(3) (h) of the Companies Act, 2013 in Form AOC 2 is not applicable.

The Company has formulated a policy on materiality of Related Party Transactions and also on dealing with Related Party Transactions. The policy is available on the Company's website www. thebyke.com.

Statutory Auditors

The Auditors M/s A.P. Sanzgiri & Co, Chartered Accountants, Mumbai, retire at the conclusion of the ensuing Annual General Meeting and being eligible offer themselves for re-appointment.

Internal Auditors

Change in Depreciation Policy Pursuant to provisions of Section 138 and other  With effect from April 1, 2014, the Company has applicable provisions of Companies Act, 2013,  revised the estimated useful lives of certain assets

M/s. Sajjan Kanodia & Co. Chartered Accountants, Mumbai has been appointed as internal auditors for the financial year 2014-15.

Secretarial Auditors

M/s Suman Sureka & Associates, Practicing Company Secretaries were appointed to conduct the secretarial audit of the Company for the financial year 2014-15, as required under Section 204 of the Companies Act, 2013 and Rules there under. The secretarial audit report for FY 2014-15 forms part of the Annual Report as Annexure B to the Director's Report.

Change in The Nature of Business

There is no change in the nature of Business of the Company.

Significant and Material Orders

There are no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and Company's operations in future.

Statement Under Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014

Pursuant to Rule 5 of the Companies (Appointment and Remuneration) Rules, 2014 a disclosure on remuneration related information of employees, Key Managerial Personnel and Directors is annexed herewith and forming part of the report. (Annexure-C)

However, there are no employees drawing remuneration more than Rs. 60 Lacs p.a. or Rs.5 Lacs per month if employed for a part of year, therefore no disclosures are required under Rule 5(2) and Rule 5(3) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

Extract of Annual Return

In accordance with Section 134(3)(a) of the Companies Act, 2013, an extract of the annual return in the prescribed format is appended as Annexure D to the Director's Report.

Internal Financial Control

The Board has adopted the policies and procedures for ensuring the orderly and efficient conduct of  its business, including adherence to the Company's 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 disclosures.

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. Based on the report of internal audit function, process owners undertake corrective action in their respective areas and thereby strengthen the controls. Significant audit observations and recommendations along with corrective actions thereon are presented to the Audit Committee of the Board.

Corporate Social Responsibility Initiatives

The Company has actively supported various initiatives in the areas of health, education and environment over the years. With the introduction of Section 135 of the Act, which came into effect during this financial year, the Company has constituted a Corporate Social Responsibility ("CSR") Committee. The CSR Policy adopted by the Board of Directors is available on the Company's website www.thebyke.com  The CSR Committee decided to continue with the existing programs and increase focus on health and education in the years ahead. The Annual Report on Corporate Social Responsibility Activities is annexed herewith as Annexure E.

Corporate Governance Report

Your Company has been complying with the provisions of Corporate Governance as stipulated in Clause 49 of the Listing Agreement. A Report on Corporate Governance along with a Certificate from the Statutory Auditors of the Company regarding the compliance of Corporate Governance as stipulated under Clause 49 of the Listing Agreement forms part of the Annual Report.

Transfer to Investor Education and Protection Fund

As required under the provisions of Section 205A and 205C and other applicable provisions of

Companies Act, 1956 (the corresponding provisions in the Companies Act, 2013 have not been notified, and hence the earlier law is still applicable in respect of these provisions), dividends that remain unpaid/unclaimed for a period of seven years, are to be transferred to the account administered by the Central Government viz: Investor Education and Protection Fund ("IEPF"). Once the amounts that are due for refund are transferred to the IEPF, no claim shall lie in respect of those amounts against the Company. The Company had transferred unpaid dividend amounts within the stipulated time to the IEPF. During the financial year 2014-15, unpaid or unclaimed dividend for the Final dividend declared as on 31st March 2007 amounting to Rs.43,753/- was transferred to Investors Education and Protection Fund. The Board draws your attention that the unclaimed/unpaid dividend for the Final Dividend declared as on 31st March 2008 is due for transfer to IEPF during the current year. Members, who have not yet encashed their dividend warrant(s) or those who are yet to claim their dividend amount which was declared for the financial year ended 31st March 2008, may write to the Company/ Company's Registrar and Share Transfer Agent, Sharepro Services (India) Private Limited.

Number of Meetings of The Board.

The Board of Directors of the Company met five (5) times during the year 2014-15. The details of various Board Meetings are provided in the Corporate Governance Report that forms part of this Annual Report. The gap intervening between two meetings of the board is as prescribed in the Companies Act, 2013 (hereinafter "the Act").

Statement on Declaration of Independence By The Independent Directors

The Company has received necessary declaration from each Independent Director of the Company under Section 149(7) of the Act, that they meet the criteria of independence as laid down in Section 149(6) of the Act.

Policy on Directors' Appointment and Remuneration

Policy on Directors' Appointment

Policy on Directors' appointment is to follow the criteria as laid down under the Companies Act, 2013  and the Listing Agreement with Stock Exchanges and good corporate practices. Emphasis is given to persons from diverse fields or professions.

Policy on Remuneration

The Board in consultation with the Nomination and Remuneration Committee decides the remuneration policy for directors. The Company has made adequate disclosures to the members on the remuneration paid to Directors from time to time.

Board Committees

The Company has the following Committees of the Board:

1. Audit Committee

2. Nomination and Remuneration committee

3. Stakeholder's Relationship committee

4. Corporate Social Responsibility committee

5. Risk Management Committee

The composition of each of the above Committees, their respective role and responsibility is as detailed in the Report of Corporate Governance.

The recommendation by the Audit Committee as and when made to Board has been accepted by it.

Board Evaluation

As required under the provisions of Section 134(3) (p) of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has carried out an annual performance evaluation of its own performance, and the manner in which such performance evaluation was carried out is as under: The performance evaluation framework is in place and has been circulated to all the directors to seek their response on the evaluation of the entire Board and independent directors. The Nomination and Remuneration Committee shall carry out evaluation of director's performance. The criteria of evaluation is exercise of responsibilities in a bona fide manner in the interest of the Company, striving to attend meetings of the Board of Directors / Committees of which he is a member/ general meetings, participating constructively and actively in the meetings of the Board / committees of the Board etc.

Directors and Key Managerial Person

As per the provisions of the Companies Act 2013, Mr. Pramod Patodia retires at the ensuing Annual General Meeting and being eligible, seeks re-appointment. The Board recommends his re-appointment.

Mr. Vikash Kumar Agarwal has been appointed as an Additional Director on 27th May 2015 and shall hold the office upto this Annual General Meeting. Your Company is in receipt of notice under section 160, 161(1) of the Companies Act, 2013 for his appointment as a Director liable to retire by rotation under the category of Non-Executive and Non- Independent Director of the Company. The Board recommends his appointment as Director liable to retire by rotation.

Mrs. Sudha Gupta has been appointed as an Additional Director on 27th May 2015 and shall hold the office upto this Annual General Meeting. Your Company is in receipt of notice under section 160, 161(1) of the Companies Act, 2013 for her appointment as an Independent Director of the Company. The Board recommends the appointment of Mrs. Sudha Gupta as an Independent Director not liable to retire by rotation and to hold office for a fixed term of 5 (five) years from date of appointment.

Your Company has designated Mr. Manish Lahoti, who is heading the Finance & Accounts Department of the Company as Chief Financial Officer (CFO) during the year. Mrs. Swati Gupta, Company Secretary, Mr Anil Patodia, Managing Director, who have been appointed before commencement of the Companies Act, 2013 and Mr. Manish Lahoti, CFO are the Key Managerial Personnel of the Company.

Vigil Mechanism

The Company has established a Vigil Mechanism that enables the Directors and Employees to report genuine concerns. The Vigil Mechanism provides for (a) adequate safeguards against victimization of persons who use the Vigil Mechanism; and (b) direct access to the Chairperson of the Audit Committee of the Board of Directors of the Company in appropriate or exceptional cases. Details of the Vigil Mechanism policy are made available on the Company's website www.thebyke.com

Risk Management

The Company has devised and implemented a mechanism for risk management and has developed a Risk Management Policy. The Policy provides for constitution of a Risk Committee, which will work towards creating a Risk Register, identifying internal and external risks and implementing risk mitigation steps. The Committee will, on a quarterly basis, provide status updates to the Board of Directors of the Company.

Prevention of Sexual Harassment Policy

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

The following is the summary of the complaints received and disposed off during the financial year 2014-15:

a) No. of complaints received: NIL

b) No. of complaints disposed off: NIL

Listing Fees

The Company confirms that it has paid the annual listing fees for the year 2015-16 to National Stock Exchange, Bombay Stock Exchange and Metropolitan Stock Exchange(MCX-SX).

Directors' Responsibility Statement

Pursuant to Section 134 of the Companies Act, 2013, the Directors state that:

i. In the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

ii. Appropriate accounting policies have been selected and applied consistently and have 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 as at March 31, 2015 and of the profit and loss of the Company for the year ended March 31, 2015;

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 have been prepared on a going concern basis;

v. Proper internal financial controls were followed by the Company and such internal financial controls are adequate and were operating effectively;

vi. Proper systems are devised to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

Statutory and Secretarial Auditors' Report

The Statutory Auditors Report to the Shareholders does not contain any qualifications hence does not require any comments on the same. A company, whose securities are listed on the Stock Exchanges, is compulsorily required to follow the accounting standards prescribed by the Institute of Chartered Accountants of India.

However with reference to the remarks made by Secretarial Auditors, with reference to non registration of two out of eight hotels of the company under specific laws applicable we wish to clarify that these two hotels are not yet fully operative.

With reference to non publication of advertisement in newspaper for having sent the notice of the meeting under section 108; Rule 20 of the Companies (Management and Administration) Rules, 2014 by the Company we wish to state that this occurred due to oversight and the company shall comply the same for future AGMs.

Energy Conservation, Technology Absorption and Foreign Exchange Earnings and Outgo

In view of the nature of activities which are being carried on by the company, Rules 2A and 2B of the  companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 concerning conservation of energy and technology absorption respectively are not applicable to the company.

Further, there were no foreign exchange earnings or outgo during the year under review.

Awards and Recognition

Your Directors are delighted to bring to your notice that your Company, The Byke Hospitality Ltd has achieved the distinction of being among the 11 companies from India that have made to the top 200 Asia Pacific corporations in Forbes Asia's 'Best under a Billion' list.

In the Hotel segment, it is one among the two companies that have made to the list, the other being China's Gayety.

The unranked list comprises 200 of the best performing firms from the Asia-Pacific region selected from a pool of 17,000 publicly listed entities with a sales turnover between $5 million and $1 billion of which 810 companies roughly passed the required criteria, according to Forbes.

Acknowledgement

Your Directors take this opportunity to express the gratitude to all investors, clients, vendors, bankers, Regulatory and Government authorities, Stock Exchanges and business associates for their cooperation, encouragement and continued support extended to the Company. Your Directors also wish to place on record their appreciation to the Associates for their continuing support and unstinting efforts in ensuring an excellent all round operational performance at all levels.

For and on behalf of the Board of Directors

Sd/-  Anil Patodia

Managing Director

DIN: 00073993

Place: Matheran (Maharashtra)

Date : July 29, 2015