Director's Report to the Members
The Directors have pleasure to present the 30th Annual Report of your Company togetherwith the audited financial statements for the year ended March 31 2017.
1. FINANCIAL RESULTS:
Your Company's financial performance for the year ended March 31 2017 is set out asbelow:
| || ||(Rs in millions) |
|Particulars ||March 31 2017 ||March 31 2016 |
|Total Income ||608.41 ||540.19 |
|Earnings before Interest Depreciation Tax and amortization (EBIDTA) ||183.70 ||144.69 |
|Less: Depreciation ||36.91 ||40.54 |
|Profit before Interest and Tax ||146.79 ||104.15 |
|Less: Interest ||3.21 ||10.37 |
|Profit before Tax ||143.58 ||93.78 |
|Less: Provision for Taxation: || || |
|Current Tax ||50.00 ||29.40 |
|Deferred Tax Liability/(Asset) ||4.33 ||0.68 |
|Tax for earlier years ||1.39 ||(0.33) |
|Profit for the year after Tax ||87.86 ||64.03 |
|Profit brought forward from last year ||113.31 ||79.98 |
|Profit available for appropriation ||201.17 ||144.01 |
|Transfer to General Reserve ||5.40 ||4.00 |
|Interim Dividends for the year (1st and 2nd) ||27.73 ||22.18 |
|Dividend Distribution Tax ||5.65 ||4.52 |
|Balance Profit carried to Balance Sheet ||162.39 ||113.31 |
|Basic and Diluted Earnings per Equity Share of Rs 2/- each ||1.90 ||1.39 |
Y our Company achieved a total turnover Rs 608.41of Million as compared to Rs 540.19Million in the previous year registering a growth of 12.63% on a year to year basis. Thisincrease was achieved without any expansion in room or food and beverage facilities anddespite a sharp fall in the value of the Great British Pound (GBP) to the Indian Rupee.Your Company had signed contracts in GBP and had this sharp fall not occured the totalincome would have been higher.
EARNINGS BEFORE INTEREST DEPRECIATION TAX AND AMORTISATION (EBIDTA):
The Gross Profit before Depreciation Finance Costs and Tax increased by 26.95%from Rs 144.69 Million to Rs 183.70 Million.
Interest costs have reduced significantly from Rs 10.37 Million to Rs 3.21 Million. Theresult was achieved by lowering term loans from banks from Rs 55.2 Million to Zero.
PROFIT BEFORE TAX:
Profit before Tax has increased by 53.10% from Rs 93.78 Million to Rs 143.58 Million.
PROFIT AFTER TAX:
Profit for the year After Tax has increased by 37.22% from Rs 64.03 Million to Rs 87.86Million.
2. INDIAN ACCOUNTING STANDARDS (IND AS) IFRS CONVERGED STANDARDS:
Y our company has adopted Indian Accounting Standards (Ind AS) with effect from 1stApril 2017 pursuant to the Ministry of Corporate Affairs' notification of the Companies(Indian Accounting Standard) Rules 2015.
In F.Y. 2016-17 the company has substantially completed the assessment of the impactof the change to Ind AS on reported reserves and surplus and on the reported profit forthe relevant periods. The Company has also completed the modification of accounting andreporting systems to facilitate the changes. The implementation of Ind AS in 2017 will bea major process change. The Company is well positioned to ensure a seamless transition onthe back of early completion of impact assessment.
The Company paid two interim dividends of 10% (Rs 0.20 per Equity Share of Rs 2 each)& 20% (Rs 0.40 per Equity share of Rs 2 each) aggregating to 30% or Rs 0.60 per equityshare during F Y 2016-17 against 24% or Rs 0.48 per equity share during F Y 2015-16. Thetotal outgo for the current year amounts to Rs 33.4 Million (including dividenddistribution tax of Rs 5.7 Million) as against Rs 26.7 Million (including dividenddistribution tax of Rs 4.5 Million) in the previous year. The Board of Directors hasdecided to treat the interim dividends as final dividend for the financial year 2016-17.
4. TRANSFER TO RESERVES:
W e propose to transfer Rs 5.4 Million to the General Reserve out of the amountavailable for appropriation. An amount of Rs 162.4 Million is proposed to be retained assurplus in the Statement of Profit and Loss.
5. CHANGE OF BRAND:
The Board decided not to renew the license agreement with Wyndham Hotels for the Ramadabrand. Our hotel was renamed the "Caravela Beach Resort Goa" with effect from1st February 2017.
6. UPGRADATION AND ADDITIONS:
Part of the original flooring of the lobby was replaced in 2016-17. A section of theflooring in the outdoor portion of the All Day Dining Restaurant is to be replaced in2017-18. The non operational Goa Nugget Casino is to be converted to serve both as apre-function to the existing Banquet Hall or as an independent Conference Room. The Carpetof the existing Banquet Hall is to be replaced. A new Banquet Hall an additional swimmingpool and a Kids Club are planned in 2018 to increase our sales in the future. A new DieselGenerator is currently being installed. New Golf buggies have been purchased. Severallandscaping improvements have taken place. Over 30 new Lenovo computers have been procuredto replace old machines. New Toyota Innova vehicles have been procured and a purchaseorder for a new soft-mounted steam powered washer-extractor machine for the laundry hasbeen placed.
7. SUBSIDIARY / HOLDING COMPANY ETC.:
The Company does not have any Subsidiary Holding Company Associate or Group VentureCompany.
8. SUST AINABLE DEVELOPMENT:
Sustainability has been deeply embedded into the Company's business and has become anintegral part of its decision making process while considering social economic andenvironmental dimensions.
9. CORPORATE SOCIAL RESPONSIBILITY (CSR) INITIATIVES:
The Board of Directors at its meeting held on 14th November 2015 approved theCorporate Social Responsibility (CSR) Policy of the Company. This was duly reviewed andrecommended by CSR Committee in accordance with Section 135 of the Companies Act 2013read with the Companies (Corporate Social Responsibility Policy) Rules 2014.
The thrust areas of CSR Policy inter alia are livelihood healthcare animal welfareand sanitation. CSR Policy approved by the Board is available on the website of theCompany.
Disclosures on CSR activities as required under Rule 9 of the (Corporate SocialResponsibility Policy) Rules 2014 are reported in "Annexure A" forming part ofthis report.
10. HUMAN RESOURCES DEVELOPMENT:
The Company has continuously adopted a structure that helps attract good externaltalent and incentivize internal talent to higher roles and responsibilities. AHRIL'speople centric focus providing an open work environment fostering continuous improvementand development helped several employees realise their career aspirations during theyear.
The Company's Health and Safety Policy is a commitment to provide a healthy and safework environment to all employees. The Company's progressive workplace policies andbenefits employee engagement and welfare initiatives have addressed stress management andpromoted work life balance.
11. BUSINESS RISK MANAGEMENT:
The Company has a Business Risk Management (BRM) framework to identify evaluatebusiness risks and opportunities. This framework seeks to create transparency minimizeadverse impact on the business objectives and enhance the Company's competitive advantage.The business risk framework defines the risk management approach across the enterprise atvarious levels including documentation and reporting. Risk management forms an integralpart of the Company's Mid-Term Planning cycle.
12. P ARTICULARS OF LOANS GUARANTEES AND INVESTMENTS:
The Company has not granted any loans or provided any guarantees or made investments.Hence no disclosures which are required under Section 186 of the Companies Act 2013 areapplicable for the year.
13. VIGIL MECHANISM:
Fraud and corruption free culture has been the core of the company. The Company hasestablished a vigil mechanism for reporting of genuine concerns through the Whistle BlowerPolicy. This Policy inter alia provides a direct access to the Chairman of the AuditCommittee of the Company. The Whistle Blower Policy is posted on the Company's website atwww.caravelabeachresortgoa.com.
14. DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP):
(a) Appointment\Reappointment: The Board of Directors pursuant to the recommendationsof the Nomination & Remuneration Committee have reappointed Mr. Prahlad S. Advani asWhole Time Director for a period of 5 years subject to the approval of the members at theensuing Annual General Meeting.
(b) Retirement by rotation: In accordance with the provisions of the Companies Act2013 Mrs. Menaka S. Advani Director of the Company retires by rotation and is eligiblefor re-appointment.
Further details about the Directors are given in the Corporate Governance Report aswell as in the Notice of the ensuing Annual General Meeting being sent to the shareholdersalong with the Annual Report.
(c) Independent Directors Declaration : The Independent Directors have submitted theDeclaration of Independence as required pursuant to Section 149 of the Companies Act2013 and provisions of the SEBI Listing Regulations stating that they meet the criteriaof independence as provided therein.
(d) Evaluation of the Board's performance: In compliance with the Companies Act 2013and Regulation 17 of the SEBI
Listing Regulations the performance evaluation of the Board and its Committees werecarried out during the year under review. More details on the same are given in theCorporate Governance Report.
(e) Policy on Directors appointment and remuneration: The Nomination & RemunerationCommittee of Directors has approved a Policy for Selection Appointment and Remunerationof Directors which inter-alia requires that the Directors shall be of high integrity withrelevant expertise and experience so as to have a diverse Board. The Policy also lays downthe positive attributes/ criteria while recommending the candidature for the appointmentas Director. The Company follows a Policy on Remuneration of Directors KMP and SeniorManagement Employees. The policy is approved by the Nomination & RemunerationCommittee and the Board. The main objective of the said policy is to ensure that the leveland composition of remuneration is reasonable and sufficient to attract retain andmotivate the Directors KMP and senior management employees. The Remuneration Policy forthe Directors and senior management employees is given in the Corporate Governance Report.
(f) Familiarization Programme for Independent Directors: In compliance with theRegulation 25(7) of the SEBI Listing Regulations the familiarization programme aims toprovide Independent Directors with the hospitality industry scenario the socio-economicenvironment in which the Company operates the business model the operational andfinancial performance of the Company significant developments etc so as to enable themto take well informed decisions in a timely manner. The familiarization programme alsoseeks to update the Directors on the roles responsibilities rights and duties under theAct and other statutes.
The policy on company's familiarization programme for Independent Directors and thedetails of familiarization programmes imparted to Independent Directors including thenumber of hours spent by each Independent Director in such programmes is posted on thecompany's website at www.caravelabeachresortgoa.com.
(g) Key Managerial Personnel: There is no change in the Key Managerial Personnel of theCompany during the year.
15. CORPORATE GOVERNANCE:
The Company has complied with the corporate governance requirements under the CompaniesAct 2013 and as stipulated under the SEBI listing regulations. A separate section oncorporate governance under the listing regulations along with a certificate from theauditors confirming the compliance is annexed and forms part of this Annual Report.
16. INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY:
The Company has designed and implemented a process driven framework for InternalFinancial Controls (IFC) within the meaning of the explanation in Section 134(5)(e) of theCompanies Act 2013.
The Company's internal controls system has been established on values of integrity andoperational excellence. The formal and independent evaluation of internal controls andinitiatives for remediation of deficiencies by the Internal Auditors has resulted in asound framework for Internal Controls commensurate with the size and complexity of thebusiness.
The internal control framework essentially has two elements: (1) structures policiesand guidelines designed to achieve efficiency and effectiveness in operations andcompliance with laws and regulations; (2) an assurance function provided by InternalAuditors.
The Company also has well-documented Standard Operating Procedures (SOPs) for variousprocesses which are periodically reviewed for changes warranted due to business needs. TheInternal Auditors continuously monitor the efficiency of the internal controls/compliancewith SOPs with the objective of providing to Audit Committee and the Board of Directorsan independent objective and reasonable assurance of the adequacy and effectiveness ofthe organization's risk management control and governance processes. This formalizedsystem of internal control facilitates effective compliance of Section 138 of CompaniesAct 2013 and the SEBI Listing Regulations.
The Audit Committee meets regularly to review reports including significant auditobservations and follow up actions thereon. The Audit Committee also meets the company'sstatutory auditors to ascertain their views on financial statements including thefinancial reporting system compliance to accounting policies and procedures the adequacyand effectiveness of internal control system.
The Internal Auditor also assesses opportunities for improvement in the businessprocesses designed to add value to the organization and follow ups on the implementationof corrective actions and improvements in the business process after review by the AuditCommittee.
For the year ended March 31 2017 the Board is of the opinion that the Company hassound IFC commensurate with the nature and size of the business operations whereincontrols are in place and operating effectively and no material weaknesses exist. TheCompany has a process in place to continuously monitor the existing controls and identifygaps if any. It can implement new and / or improved controls wherever the effect of suchgaps would have a material effect on the Company's operations.
During the year ended March 31 2017 there were no reportable incidents of fraud asdefined in Section 143(12) of the Companies Act 2013.
17. DIRECTORS' RESPONSIBILITY STATEMENT:
Pursuant to the provisions of Section 134(5) of the Companies Act 2013 the Board ofDirectors to the best of their knowledge and ability confirm that:
(i) In the preparation of the accounts for the financial year ended March 31 2017 theapplicable Accounting Standards have been followed and there are no material departures;
(ii) They have selected such accounting policies and applied them consistently and madejudgments and estimates made that are reasonable and prudent so as to give a true and fairview of the state of affairs of the Company as at March 31 2017 and of the profit andloss of the Company for the year ended March 31 2017;
(iii) They have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act for safeguardingthe assets of the Company and for preventing fraud and other irregularities;
(iv) They have prepared the annual accounts for the financial year ended March 31 2017on a "going concern" basis; (v) They have laid down internal financial controlsto be followed by the Company and that such internal financial controls are adequate andwere operating effectively; (vi) They have devised proper systems to ensure compliancewith the provisions of all applicable laws and that such systems were adequate andoperating effectively.
Based on the framework of internal financial controls and compliance systemsestablished and maintained by the Company work performed by the internal statutory andsecretarial auditors and external consultants including audit of internal financialcontrols over financial reporting by the statutory auditors and the reviews performed bymanagement and the relevant board committees including the audit committee the board isof the opinion that the
Company's internal financial controls were adequate and effective during FY 2016-17.
18. ST ATUTORY AUDITORS:
M/s. J. G. Verma & Co. Chartered Accountants (ICAI's Firm Registration No.111381W) have been the Statutory Auditors of the company since inception of the companyand have completed around 30 years as statutory auditors of the company. The presentauditors were last re-appointed as the Statutory Auditors of the Company for a period ofthree years at the 27th Annual General Meeting (AGM) of the Company held on September 242014 to hold the office from the conclusion of the twenty seventh Annual general Meetingtill the conclusion of this thirtieth Annual General Meeting.
As per the provisions of Section 139 of the Companies Act 2013 no listed company shallappoint or reappoint an audit firm (including its affiliate firms) as auditors for morethan two terms of five consecutive years. The Act also provided for additional transitionperiod of three years from the date of commencement of the act i.e. 1st April 2014 tocomply with this requirement.
The Company is proposing to appoint M/s. Amar Bafna & Associates CharteredAccountants (ICAI Firm Registration No.114854W) as Statutory Auditors for a period of 5years commencing from the conclusion of the 30th Annual General Meeting till theconclusion of the 35th Annual General Meeting. M/s. Amar Bafna & Associates haveconsented to the said appointment and confirmed that their appointment if made would bewithin the limits mentioned under Section 141(3)(g) of the Companies Act 2013 and theCompanies (Audit and Auditors) Rules 2014. As required under SEBI (LIDOR) Regulations2015 M/s. Amar Bafna & Associates Chartered Accountants have confirmed that theyhold a valid certificate issued by the Peer Review Board of the Institute of CharteredAccountants of India.
The Audit Committee and the Board of Directors recommend the appointment of M/s. AmarBafna & Associates Chartered Accountants as Statutory Auditors of the company fromthe conclusion of the 30th Annual General Meeting till the conclusion of the 35th AnnualGeneral Meeting.
The Board places on record its appreciation for the contribution of M/s. J. G. Verma& Co. Chartered Accountants during their tenure as the Statutory Auditors of yourcompany. The Auditors' Report to the Shareholders for the year under review does notcontain any qualification.
The observations and comments given in the Auditors' Report read together with thenotes to the accounts are self explanatory and hence do not call for any furtherinformation and explanation under Section 134(3) of the Companies Act 2013.
19. SECRETARIAL AUDIT:
Pursuant to the requirements of the Companies Act 2013 the Company has appointed Mr.Virendra G. Bhatt Practicing Company Secretary to undertake the Secretarial Audit of theCompany whose report dated May 23 2017 is attached separately to this report as"Annexure B".
20. FIXED DEPOSITS:
The Company has not accepted any deposits from the public/members under Section 73 ofthe Companies Act 2013 read with Companies (Acceptance of Deposits) Rules 2014 duringthe year.
21. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE COURTS OR REGULATOR:
There are no significant material orders passed by the Regulators / Courts which wouldimpact the Going Concern' status of the Company and its future operations. Howevermember's attention is drawn to the statement on contingent liabilities in the notesforming part of the financial statements.
22. CODE OF BUSINESS CONDUCT:
As per the Listing Agreement the Board has a Code of Conduct' in place wherebyall Board Members and Senior
Management have declared and complied with the said Code. A declaration to this effectsigned by the Chairman & Managing Director has been obtained.
23. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREX EARNINGS AND OUTGO:
As required under Section 134(3)(m) of the Companies Act 2013 read with Rule 8 (3) ofthe Companies (Accounts) Rules 2014 the particulars relating to conservation of energytechnology absorption and foreign exchange earnings and outgo are given in "AnnexureC" hereto and forms part of this Report.
24. TRANSFER OF UNCLAIMED DIVIDEND
During the year it was not required to transfer any amount to the Investor Education& Protection Fund (IEPF).
25. DISCLOSURES UNDER THE COMPANIES ACT 2013 AND LISTING REGULATIONS
(i) EXTRACT OF ANNUAL RETURN:
The details forming part of the extract of the Annual Return in form MGT-9 is annexedherewith as "Annexure D".
The Board of Directors met 5 (five) times in the financial year 2016-17. The details ofthe board meetings and the attendance of the Directors are provided in the CorporateGovernance Report. The gap between the Board Meetings was within the period prescribedunder the Companies Act 2013.
(iii) AUDIT COMMITTEE:
The Board has constituted the Audit Committee which comprises of Mr. Prakash Mehta asthe Chairman and Mr. Vinod Dhall Mr Adhiraj Harish and Mrs. Menaka S. Advani as members.More details pertaining to Committee are included in the Corporate Governance Reportwhich forms part of the Annual Report.
(iv) RELATED PARTY TRANSACTIONS:
All the related party transactions are entered on arm's length basis in the ordinarycourse of business and are in compliance with the applicable provisions of the CompaniesAct 2013 and the Listing Regulations. There are no materially significant related partytransactions made by the Company with Promoters Directors or Key Managerial
Personnel etc. which may have potential conflict with the interest of the Company atlarge or which warrants the approval of the shareholders. Accordingly no transactions arebeing reported in Form AOC-2 in terms of Section 134 of the Act read with Rule 8 of theCompanies (Accounts) Rules 2014. However the details of the transactions with
Related Party are provided in the Company's financial statements in accordance with theAccounting Standards.
All Related Party Transactions are presented to the Audit Committee and the Board. Astatement of all related party transactions is presented before the Audit Committee on aquarterly basis specifying the nature value and terms and conditions of thetransactions. The statement is supported by the certificate from the MD and the CFO. TheRelated Party Transactions Policy as approved by the Board is uploaded on the Company'swebsite at: www.caravelabeachresortgoa.com.
(v) POLICY ON SEXUAL HARASSMENT OF WOMEN AT WORKPLACE:
The Company has zero tolerance towards sexual harassment at the workplace and towardsthis end has adopted a policy in line with the provisions of Sexual Harassment of Womenat Workplace (Prevention Prohibition and Redressal) Act 2013 and the Rules there under.All employees (permanent contractual temporary trainees) are covered under the saidpolicy. An Internal Complaints Committee has also been set up to redress complaintsreceived on sexual harassment.
During the financial year under review the Company has not received any complaints ofsexual harassment from any of the women employees of the Company.
26. P ARTICULARS OF EMPLOYEES:
The disclosure pertaining to remuneration and other details as required under Section197(12) of the Companies Act 2013 read with Rule 5(1) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 are annexed to this report as"Annexure E".
Further a statement showing the names and other particulars of employees drawingremuneration in excess of limits as set out in the Rules 5(2) and 5(3) of the aforesaidrules forms part of this report.
27. MA TERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY:
There have been no material changes and commitments affecting the financial position ofthe Company which have occurred between the end of the financial year of the Company towhich the financial statements relate and the date of this report.
Y our Directors appreciate the assistance provided by our bankers the Ministry ofFinance Tourism and the Goa
Government. We thank our dear Shareholders our valued clients and our tour operatorsfor their continued support. Your Directors also greatly appreciate the contributions madeby all employees to improve the operations of the Company.
| ||For and on behalf of the Board of Directors |
| ||SUNDER G. ADVANI |
|Place: Mumbai ||Chairman & Managing Director |
|Date: August 14 2017 ||(DIN 00001365) |