Adlabs Entertainment Ltd.
|BSE: 539056||Sector: Services|
|NSE: ADLABS||ISIN Code: INE172N01012|
|BSE LIVE 15:45 | 19 Jan||77.75||
|NSE LIVE 15:51 | 19 Jan||77.35||
|Mkt Cap.(Rs cr)||621.22|
|Mkt Cap.(Rs cr)||621.22|
Adlabs Entertainment Ltd. (ADLABS) - Director Report
Company director report
Your Directors present the 7th Annual Report of the Board of Directors ofyour Company along with the Balance Sheet Profit and Loss Account and Cash Flow Statementfor the year ended March 312016.
SUMMARY OF FINANCIAL HIGHLIGHTS
The standalone performance of the Company for the financial year ended March 312016 issummarized below:
(Rs. In million)
For the financial year 2015-16 the footfalls of the Theme Park and the Water Park puttogether stood at 1.55 million versus 1.06 million in the previous year i.e. a growth of46%. The revenues from operations stood at '2523.91 million versus '1894.22 million inprevious year signifying growth of 33% on a YoY basis. Consequently the EBITDA for FY2015-16 is '402.05 million versus '205.25 million in the previous year signifying growthof 96%.
The outstanding secured loan as on March 31 2016 aggregate to '9628.64 million. Thesaid outstanding is post pre-payment done vide IPO proceeds.
The weighted average rate of interest is 12.04 % p.a.
Your Company had sold land admeasuring out of overall 170 acres of surplus landapproximately 138 acres to Walkwater Properties Private Limited ("WPPL")wholly owned subsidiary company of the Company in FY 2014-15 and the transfer wascompleted during FY 2015-16. In consideration of the said transfer 21151321 equityshares of '10 each at a premium of '40 per share aggregating to '1 057 566 026 wereissued and allotted to the Company by WPPL.
THE STATE OF COMPANY AFFAIRS
Your Company owns & operates an Integrated Entertainment Holiday Destination"IMAGICA" which is build to match global standards and includes a theme park awater park a snow park a hotel and other associated activities such as retail &merchandise food and beverages etc.
During the year under review your Company launched its Hotel 'Novotel Imagica Khopoli'on September 16 2015 with 116 rooms in the first phase out of a total of 287 roomsproposed. Your Company is pleased to inform that hotel has delivered average occupancy of75% in the first 6 months of its operations. Novotel Imagica within a short period sinceit's launch has been able to establish its niche in the leisure and social segments andhas firmly established Imagica's position as a multi-day family holiday destination.
With the philosophy of positioning Imagica as an exciting holiday destination; yourCompany has launched a new brand logo embodying the Imagica experience as "Imagicabadi interesting jagah hai".
Your Company completed the Snow Park and the same was opened to public in April 2016.The Snow Park is built over an area of 30000 sq. feet and is the largest Snow basedattraction in India.
EXTRACT OF ANNUAL RETURN
Extract of annual return is enclosed in Annexure 1.
DIVIDEND & TRANSFER TO RESERVES
In view of the loss for the year under review no amount is proposed to be transferredto the reserve(s) and your Directors have not recommended payment of any dividend for theyear under review.
NUMBER OF BOARD MEETINGS
During the year ended March 31 2016 the Board of Directors met 5 (five) times viz.on May 27 2015 August 3 2015 November 2 2015 January 28 2016 and March 10 2016.The maximum interval between any two meetings did not exceed 120 days.
Details of the meetings of the Board alongwith the attendance of the Directors thereinhave been disclosed as part of the Corporate Governance Report forming part of this AnnualReport.
COMPOSITION OF AUDIT COMMITTEE
The composition of Audit Committee of the Company is as follows:
1. Mr. Steven A. Pinto Chairman;
2. Mr. Ghulam Mohammed;
3. Mr. Prashant Purker; and
4. Ms. Anjali Seth.
DECLARATION OF INDEPENDENCE BY DIRECTOR
Pursuant to the provisions under Section 134(3)(d) of the Companies Act 2013 withrespect to statement on declaration given by Independent Directors under Section 149(6) ofthe Companies Act 2013 the Board hereby confirms that all the Independent Directors ofthe Company have given a declaration and have confirmed that they meet the criteria ofindependence as provided in the said Section 149(6) and relevant Regulation of SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015.
Pursuant to Section 152 of the Companies Act 2013 Mr. Kapil Bagla Director of theCompany retires by rotation and being eligible offers himself for re-appointment at theensuing Annual General Meeting.
During the year under review Mr. Prashant Purker ceased to be a Nominee Directorw.e.f. May 13 2015 and thereafter he was appointed as an Independent Director of theCompany w.e.f May 27 2015 for a period of 5 years.
The Board made the following appointments based on the recommendations of theNomination and Remuneration Committee:
Ms. Pooja Deora was appointed as an Additional Director with effect from May 242016;
Ms. Meghna Ghai Puri was appointed as an Additional Independent Director of theCompany with effect from May 24 2016 ; and
Mr. Ashutosh Kale was appointed as an Additional Director of the Company witheffect from May 24 2016.
The aforesaid appointments were made to hold office upto the date of the ensuing AnnualGeneral Meeting of the Company pursuant to Section 161 of the Companies Act 2013 (the"Act").
The Company has received notice in writing from a Member along with the deposit ofrequisite amount as required under Section 160 of the Act proposing their candidature forthe office of Director of the Company.
The brief resume of the Directors being appointed/ re-appointed the nature of theirexpertise in specific functional areas names of companies in which they have heldDirectorship(s) Committee Membership(s)/ Chairmanship(s) their shareholding etc. isgiven in the section on Corporate Governance Report forming part of this Annual Report.
KEY MANAGERIAL PERSONNELS
The Key Managerial Personnel (KMP) in the Company as per Section 2(51) and 203 of theAct are as follows:
During the year under review Mr. Ghanshyam Jhala resigned as Company Secretary andCompliance Officer of the Company with effect from the close of business hours of October9 2015 and Ms. Madhulika Rawat was appointed as the Company Secretary and ComplianceOfficer of the Company with effect from November 2 2015.
Walkwater Properties Private Limited is the only subsidiary company of your Company.During the period under review no Company became/ ceased to be a subsidiary of yourCompany.
A separate statement in terms of Section 129(3) of the Act containing salient featuresof the financial statements of the subsidiary of your Company in Form AOC 1 forms part ofthis Annual Report.
Pursuant to the Section 136 of the Act which has exempted companies from attaching theAnnual Reports and other particulars of its subsidiary companies along with Annual Reportof the Company the Annual Report of Walkwater Properties Private Limited is not attachedwith this Annual Report.
The financial statements of the subsidiary company and related information shall beuploaded on the website of your Company which can be accessed using the link
Any Member desirous of obtaining a copy of the said financial statements may write tothe Company Secretary at the registered office address of your Company.
Your Company has approved a policy for determining material subsidiaries and the sameis uploaded on the Company's website which can be accessed using the link
During the year under review your Company has not accepted any fixed deposits from thepublic falling under Section 73 of the Act read with the Companies (Acceptance ofDeposits) Rules 2014. Thus as on March 31
2016 there were no deposits which were unpaid or unclaimed and due for repayment.
M/s. A. T. Jain & Co. Chartered Accountants the Statutory Auditors of the Companyhold office until the conclusion of the ensuing Annual General Meeting and are eligiblefor re-appointment.
The Company has received letter from M/s. A. T. Jain & Co. Chartered Accountantsto the effect that their appointment if made would be within the prescribed limits underSection 141(3)(g) of the Act and that they are not disqualified for such appointmentwithin the meaning of Section 141 of the Act.
The observations and comments given by Auditors in their report read together withnotes to Accounts are self explanatory and hence do not call for any further commentsunder Section 134 of the Act. The Auditors' Report does not contain any qualificationreservation or adverse remark.
Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 the Company has appointed M/s. Aabid& Co. Company Secretaries to undertake the Secretarial Audit of the Company for thefinancial year 201516. The Report of the Secretarial Audit in Form MR 3 for the financialyear 2015-16 is annexed as Annexure 2 to the Report. There are no qualificationsreservations or adverse remarks made by Secretarial Auditor in his report.
The Board has appointed M/s. Aabid & Co. Company Secretaries as SecretarialAuditors for the financial year 2016-17.
TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND
The provisions of Section 125(2) of the Act do not apply as there was no dividenddeclared and paid by the Company.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALSIMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE
During the year under review there were no such orders passed by the regulators orcourts or tribunals impacting the going concern status and company's operations in future.
ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS
The Company has adequate internal control procedures commensurate with its size andnature of business. The business control procedures ensure efficient use and protection ofCompany's resources and compliance with policies procedures and statutory requirements.Further Internal auditors are appointed to carry audit assignments and to periodicallyreview the transactions across the divisions and evaluate effectiveness of internalcontrol systems.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF THE ACT
During the year there were no loans and guarantees given under Section 186 of the Act.Particulars of investments have been disclosed as part of the financial statements of yourCompany for the year under review as Note 13.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES REFERRED TO INSUB-SECTION (1) OF SECTION 188 OF THE ACT IN THE PRESCRIBED FORM
All contract(s) / arrangement(s) / transaction(s) entered into by your Company with itsrelated parties during the year under review were:
in "ordinary course of business" of the Company;
on "an arm's length basis"; and
as per the provisions of Section 188(1) of the Act read with Companies (Meetings ofBoard and its Powers) Rules 2014. Accordingly Form AOC-2 prescribed under theprovisions of Section 134(3)(h) of the Act and Rule 8 of the Companies (Accounts) Rules2014 for disclosure of details of Related Party Transactions which are "not atarm's length basis" and also which are "material & at arm's lengthbasis" is not provided as an annexure of the Directors' Report.
However details of the Related Party Transactions entered into during the year underreview and as on March 31 2016 are disclosed as part of the financial statements of yourCompany for the year under review as Note 31. Further pursuant to the provisions of theAct and the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015Board has approved and adopted a Policy on Related Party Transactions. The said policy isavailable on your Company's website viz. www.adlabsimagica.com.
MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY
There have been no material changes and commitments affecting the financial positionof the Company which occurred between the end of the financial year to which the financialstatements relate and the date of this report.
DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS/ COURTS/ TRIBUNALSIMPACTING THE GOING CONCERN STATUS AND THE COMPANY'S OPERATIONS IN FUTURE
There are no significant material orders passed by the Regulators/ Courts which wouldimpact the going concern status of the Company and its future operations.
Board has constituted a Risk Management Committee of the Board to assist the Boardwith regard to the identification evaluation and mitigation of operational strategic andexternal risks. Risk Management Committee works towards identifying internal and externalrisks and implementing risk mitigation steps. On quarterly basis status updates areprovided to the Board of Directors of the Company.
More details on risks and threats have been disclosed in the section "ManagementDiscussion and Analysis".
CORPORATE SOCIAL RESPONSIBILITY (CSR)
CSR is a company's sense of responsibility towards the community and environment inwhich it operates. It is the continuing commitment by business to behave ethically andcontribute to economic development of the society at large and building capacity forsustainable livelihoods. The Company believes in conducting its business responsiblyfairly and in a most transparent manner. It continually seeks ways to bring about anoverall positive impact on the society and environment where it operates and as a part ofits social objectives.
This policy has been formally formulated and adopted in terms of Section 135 of the Actand Rules framed thereunder to undertake CSR activities. The Company has always madeconsistent efforts to maintain an active corporate social responsibility portfolio.
The Company has duly constituted CSR Committee comprising of Mr. Steven A. Pinto Mr.Prashant Purker and Mr. Manmohan Shetty.
The responsibilities of the CSR Committee include:
1) Formulating and recommending to the Board of Directors the CSR Policy and indicatingactivities to be undertaken.
2) Recommending the amount of expenditure for the CSR activities.
3) Monitoring CSR activities from time to time.
In view of the losses for the year under review your Company was not required to spendany amount towards the CSR activities as per the applicable provisions of Section 135 ofthe Act. Accordingly the details of the CSR activities during the year under review arenot provided in this Report.
NOMINATION AND REMUNERATION POLICY
The Company follows a policy on nomination and remuneration of Directors and SeniorManagement Employees. The Policy is approved by the Nomination and Remuneration Committee.The policy on the above is attached as Annexure 3.
FORMAL ANNUAL EVALUATION
The Company has devised a policy for performance evaluation of its individualdirectors the Board and the Committees constituted by it which includes criteria forperformance evaluation.
In line with the requirements of the Companies Act 2013 and SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015 the Board has carried out an annualevaluation of its own performance working of the Committees and the Directorsindividually.
The Board performance was evaluated based on inputs received from all the Directorsafter considering criteria such as Board's effectiveness in decision making in providingnecessary advice and suggestions to the Company's management etc.
A separate meeting of the Independent Directors was also held during the year forevaluation of the performance of the Non Independent Directors the Board as a whole andthat of the Chairman.
The Nomination and Remuneration Committee has also reviewed the performance of theindividual directors based on their knowledge level of preparation and effectiveparticipation in meetings contribution towards positive growth of the Company etc.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to the requirement under Section 134 (5) of the Act with respect to theDirectors' Responsibility Statement it is hereby confirmed that:
(a) in the preparation of the annual accounts the applicable accounting standards havebeen followed along with proper explanation relating to material departures if any;
(b) the directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company at the end of the financial year and ofthe profit and loss of the Company for that period;
(c) the directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;
(d) the directors have prepared the annual accounts on a going concern basis;
(e) the directors have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively; and
(f) the directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
CONSOLIDATED FINANCIAL STATEMENTS
The audited consolidated financial statements for the financial year ended March 312016 based on the financial statements received from the subsidiary company as approvedby its Board of Directors has been prepared in accordance with Accounting Standard 21(AS-21) on "Consolidated Financial Statements" read with the AccountingStandards and Rules as applicable.
The Company has established a Vigil Mechanism that enables the Directors and Employeesto report genuine concerns. The Vigil Mechanism provides for (a) adequate safeguardsagainst victimization of persons who use the Vigil Mechanism; and (b) direct access to theChairperson of the Audit Committee of the Board of Directors of the Company in appropriateor exceptional cases.
Details of the Vigil Mechanism policy are made available on the Company's website
PARTICULARS OF EMPLOYEES
Disclosures with respect to the remuneration of Directors and employees as requiredunder Section 197 (12) of the Act and Rule 5(1) Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 are provided separately as Annexure 4 to this Report.
Details of employee remuneration as required under provisions of Section 197(12) of theAct and Rule 5(2) & 5(3) of Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 will be made available at the registered office of the Companyduring working hours pursuant to the provisions of the first proviso to Section 136(1) ofthe Act and any member interested in obtaining such information may write to the CompanySecretary and the same will be made available to any such member on request.
FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTORS
All new Independent Directors (IDs) inducted into the Board are given an orientation.Presentations are made by Executive Directors (EDs) and Senior Management giving anoverview of the Company's operations to familiarise the new IDs with the Company'sbusiness operations. The new IDs are given an orientation on our products group structureand subsidiary company Board constitution and procedures matters reserved for the Boardand the Company's major risks and risk management strategy. The Policy on the Company'sFamiliarisation Programme for IDs can be accessed at https://www.adlabsimagica.com/investor_docs/Familiarisation%20programme%20for%20Independent%20Directors.pdf.
The Company regards human resources as a valuable asset. The Company encourages aperformance driven culture and enables the employees with focused training at regularintervals. Further the training needs of the staff at all divisions are periodicallyassessed and training programmes are conducted using internal resources and/or engagingexternal facilitators and trainers. The total number of permanent employees on the rollsof the Company as on the year end were 879.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The particulars relating to conservation of energy technology absorption foreignexchange earnings and outgo as required to be disclosed under the Act are provided inAnnexure 5 to this Report.
The Company has complied with the corporate governance requirements under the CompaniesAct 2013 and as stipulated under the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015. A separate section on corporate governance under the SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 along with thecertificate from the Practicing Company Secretary confirming the compliance is annexedand forms part of this Annual Report.
MANAGEMENT DISCUSSION & ANALYSIS
Management Discussion and Analysis is annexed as Annexure 6.
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013
The Company has always believed in providing a safe and harassment free workplace forevery individual working in the Company's premises through various interventions andpractices. The Company always endeavours to create and provide an environment that is freefrom discrimination and harassment including sexual harassment.
The Policy on Prevention of Sexual Harassment at Workplace has been formulated by theCompany. The policy aims to develop a harmonious and productive working environment freefrom sexual harassment. The Company also ensures all allegations of sexual harassment areinvestigated and dealt with effectively and appropriately.
During the year under review the Company received 7 complaints pertaining to sexualharassment. All the complaints have been resolved as on March 31 2016.
Your Directors would like to express their sincere appreciation for the cooperation andassistance received from shareholders bankers financial institutions regulatory bodiesand other business constituents during the year under review. Your Directors also wish toplace on record their deep sense of appreciation for the commitment displayed by allexecutives officers and staff of the Company during the financial year.
For and on behalf of the Board of Directors