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Arambhan Hospitality Services Ltd.

BSE: 539403 Sector: Services
NSE: N.A. ISIN Code: INE800S01017
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OPEN 35.00
52-Week high 51.50
52-Week low 17.10
Mkt Cap.(Rs cr) 18
Buy Price 34.50
Buy Qty 5000.00
Sell Price 36.90
Sell Qty 5000.00
OPEN 35.00
CLOSE 35.00
52-Week high 51.50
52-Week low 17.10
Mkt Cap.(Rs cr) 18
Buy Price 34.50
Buy Qty 5000.00
Sell Price 36.90
Sell Qty 5000.00

Arambhan Hospitality Services Ltd. (ARAMBHANHOSPIT) - Director Report

Company director report


The Members

Arambhan Hospitality Services Limited

We are delighted to present the report on our business and operations for the yearended March 31 2016.


A summary of your Company’s financial performance is given below:

(Rs. in ‘000’)
Particulars For the F.Y. ended For the F.Y. ended
March 31 2016 March 31 2015
Audited Audited
Revenue from Operations 709764.01 638084.32
Other Income 13247.85 3644.47
Total Income 723011.86 641728.79
Raw Materials consumed 433590.68 338749.52
Employee Benefit Expenses 120351.36 124801.51
Other Expenses 118551.88 114251.72
Total Expenditure 672493.92 577802.75
Profit/Loss before Interest & Depreciation 50517.94 63925.74
Finance costs 23721.44 24811.83
Depreciation and amortization expense 8612.68 9840.14
Profit/Loss before exceptional and extraordinary items 18183.82 29273.77
and Tax
Exceptional and Extraordinary items - 12819.22
Profit/Loss before Tax 18183.82 16454.55
Tax – Current Tax 6702.86 3773.78
Profit/Loss after Tax 11480.96 12680.77
Basic/Diluted Earnings per equity share 2.30 2.54


During the year 2015-2016 the total revenue of our company increased to Rs.723011860 as against Rs. 641728790 in the year 2014-15 representing a increase of12.51 % of the revenue from the operations.


Your company further expanded into the restaurant space again with a view to enter thecash sale business and broad base its revenue base. The Fun Dining brand"MeSoHappi" (MSH) was curated and very well received by the food criticsbloggers and media. The first outlet was established on the high street area of LinkingRoad Khar at a considerable high rental for establishing the brand. Food sales wasencouraging even without a Bar Licence. Weekly licence has not shown any significantgrowth prospects for Bar Sales. A Quick Service Restaurant format (QSR) was alsoestablished in the upmarket opposite sea face promenade of Carter Road Bandra.

A third outlet for MSH alongside a new Fine Dine Sea Food Speciality restaurant"The Captain’s Table" (TCT) was curated at BandraKurla Complex (BKC)Bandra. This outlet has a Licence to operate a full fledged bar.

Your company decided to broad base itself and foray into the Onshore retail cateringmarket. Accordingly continued with the services at the Willingdon Catholic Gymkhana (WCG)and the Catholic Gymkhana (CGS) in Mumbai. Sales in both these gymkhanas dippedtremendously due to internal differences between committee members and a section of themembers. In WCG there were several raids from the Municipality Health Fire and Excisedepartments for irregularities resulting in the closure of two outlets for service andsevere restriction on the bar sale areas. In CGS similar fights and differences lead toclosure of a banquet hall and severe restrictions placed on guest members entries. Duringthis entire period not only was overall sales effected but there was no increase in menusale prices despite inflation.

Despite the above constraints we were able to get new clients in Rajasthan and fewsupply contracts in Mumbai and were also able to succeed in winning a tender for Catering& Housekeeping Contract on 3 rigs of the Oil & Natural Gas Company India (ONGC).The contract is for a 3 year duration and is totally valued at INR 20.67 Crores. Thisadded to the turnover and profit.

Your company successfully listed in the SME platform of the Bombay Stock Exchange witha modest Offer for Sale of Rupees One Crore and Eighty six Lacs and twenty thousand. Thestock was oversubscribed by two times for a premium of Rupees Four per share. In a fewweeks time the market pushed the price to a high of Rupees Forty Four per share. Yourscrip was the proud recipient of the Bombay Stock Exchange award for exceptionalperformance of a new entrant in the SME sector.


Going ahead there is a possibility that lower oil prices may sustain for the next fewyears. However the Company is optimistic of managing industry downtrends on account ofthe robustness of its business model. The Company believes that it is attractivelypositioned to address the slowdown on the back of its operational effectiveness andincipient ability to rein in costs.

We intend to expand our catering and house- keeping services into onshore marketsegment as we believe that there is potential market for providing corporate meals ataffordable price to corporate offices near Andheri and Bandra Kurla complex area inMumbai. As such our Company is planning to have centralized kitchen to cater such segment.We believe that this potential market will aid in our expansion in times to come.

Your Company has taken on long lease an independent Ground plus two-storey structurewith open land and it is planning to establish a warehouse cum food processing unit inTaloja in New Mumbai.

As a part of our growth plans the Company is exploring various possibilities to expandinto the Catering Housekeeping Facilities Management and Restaurant space includingOffshore and Remote sites in the Middle-east . Accordingly Your company has establishedan 100% subsidiary "CBCS International Ltd." In the Jebel Ali Free Zone Area(JAFZA) of the UAE. CBCS International has entered into a Joint Venture with a localcatering company "Mohammed Al Neyadi Catering Services" with a 49% shareholdingin the JV. The name of the company is proposed to be changed to "Arambhan Al NeyadiCatering Services"

All above growth plans into diversified segments and geography of the food sectoritself is planned to achieve stability and alternate lines of revenue. However a closewatch will be maintained for profitability stability and growth

Continuous improvement in Human Resource development efficiency in processes andcontrols will be at the centre stage of activity lead by a dedicated and experiencedmanagement


There has been no change in the nature of business of the Company during the year underreview.


During the year 2015-2016 the total Reserves & Surplus of our company decreased toINR 79250440 as against INR 105908860 in the year 2014-15. The decrease was mainlydue to the Issue of fully paid up Bonus Equity Shares to the Shareholders of the Companyof INR 37500000.


With a view to conserve resources your Directors do not recommend Dividend for theyear under review.


As a part of our growth plans the Company is exploring various possibilities to expandinto the Catering Housekeeping Facilities Management and Restaurant space includingOffshore and Remote sites in the Middle-east . Accordingly Your company has establishedan 100% subsidiary "CBCS International Ltd." In the Jebel Ali Free Zone Area(JAFZA) of the UAE. CBCS International has entered into a Joint Venture with a localcatering company "Mohammed Al Neyadi Catering Services" with a 49% shareholdingin the JV. The name of the company is proposed to be changed to "Arambhan Al NeyadiCatering Services"


The Promoter and also Chairman & Managing Director Mr. Alfred Micheal Arambhan(DIN: 00788831) is a first generation entrepreneur having over 28 years of experience inship chandelling and catering industry. With a view to enter into catering andhousekeeping business Mr. Alfred Micheal Arambhan started a partnership firm under thename and style of "M/s. Cawasji Behramji Catering Services" in the year 2003.Further in order to infuse corporate culture in serving our clients our Promoter Mr.Alfred Micheal Arambhan commenced providing the services as offered earlier by thepartnership firm M/s. Cawasji Behramji Catering Services under the newly incorporatedCompany under the name and style of "Cawasji Behramji Catering Services PrivateLimited" in the year 2009.

With the passage of time and with dedicated efforts of Mr. Alfred Micheal Arambhan theoperations of our Company have gradually grown over the years. Apart from offshorecatering the Company has forayed into new business segments of Banquets and also foodretail by opening a multi cuisine restaurant under the name "me so happi".

The Company presently is a unit of Arambhan Group and it is Mr. Alfred MichealArambhan’s vision to enhance the Corporate image of Arambhan Group and accordingly itwas proposed to change the name of the Company to Arambhan Hospitality ServicesLimited.

A fresh Certificate of Incorporation pursuant to the change of name of the Company wasissued by the Registrar of Companies Mumbai on May 17 2016.


During the year under review pursuant to the issuance of Bonus Equity Shares thepaid-up Share Capital of the Company was increased from INR 12500000/- comprising of1250000 equity shares of INR 10/- each to INR 50000000/- comprising of 5000000Equity Shares of the Company of INR 10/- each.


As the Company’s mission statement states we believe in creating invaluablerelationship with all our Stakeholders viz; Suppliers Customers Lenders Shareholdersand Employees. Human Resources continue to be the most valuable assets for your Company.The Company’s recruitment strategy ensured that employee addition was clearly alignedto business demand and their eligibility. Your Company strives to help its employees growprofessionally and to give them opportunities to accomplish their career goals. Alsoconstant efforts are in place towards creating and maintaining an enthusiastic workculture to give an equal opportunity to demonstrate their potential towards achieving thecorporate goals and objectives. Your Company undertakes induction and staff welfareprogrammes for thier employees and helps in built their inner strengths and abilities.


A statement containing the names of every employee employed throughout the financialyear and in receipt of remuneration of INR 1.02 crore or more or employed for part of theyear and in receipt of INR 8.5 lakh or more a month under Rule 5(2) and 5(3) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 is enclosedas Annexure 2 to the Board's report.


The Board of Directors of the Company is duly constituted with proper balance ofExecutive Directors and Independent Directors. The Company is required to appoint 1Independent Director in terms of section 149 due to change in composition of Directors.


Your Directors report that the regular meetings of the Board are held to discuss anddecide on various business policies strategies and other businesses. The Board met 11(Eleven) times during the financial year 2015-16.

Number and dates of meeting of Board held during the year:

Board Meeting
1. April 16 2015
2. April 18 2015
3. April 27 2015
4. May 18 2015
5. May 21 2015
6. June 09 2015
7. June 12 2015
8. July 16 2015
9. August 10 2015
10. October 12 2015
11. January 14 2016

Number of meeting attended by each Director:

Name of Directors Board meeting attended
1. Alfred Micheal Arambhan 11
2. Nalini Maria Arambhan 11
3. Aarathi Alfred Arambhan 11
4. Pooja Alfred Arambhan 2
5. Yateen Madhukar Chodnekar 1
6. Abhijit Pradhan 6
7. John Philipose 2
8. Shashank More 4


i. Audit Committee

The Audit Committee comprises Mr. Shashank More (Chairman) Mr. Abhijit Pradhan and Mr.Alfred Micheal Arambhan as Members. All the recommendations made by the Audit Committeewere accepted by the Board. The Audit Committee met twice during the financial year underreview. The meetings of the Committee were held on 12th October 2015 & 14thJanuary 2015.

The attendance of each Director at the said Committee Meetings is given below:

Name of the Directors No. of Committee Meetings Held No. of Committee Meetings attended
Mr. Shashank More (Chairman) 2 2
Mr. Abhijit Pradhan 2 2
Mr. Alfred Micheal Arambhan 2 2

During the year 2015-16 the Audit Committee met only twice as Company got Listed on 19thOctober 2015.

ii. Nomination and Remuneration Committee

The Nomination and Remuneration Committee comprises Mr. Abhijit Pradhan (Chairman) Mr.JohnPhilipose and Mr. Shashank More as Members. The Nomination and Remuneration Committeemet twice during the financial year under review. The meeting of the Committee was held on12th October 2015 & 14th January 2015.

The attendance of each Director at the said Committee Meetings is given below:

Name of the Directors No. of Committee Meetings Held No. of Committee Meetings attended
Mr. Abhijit Pradhan (Chairman) 2 2
Mr. Shashank More 2 2
Mr. John Philipose 2 1

iii. Stakeholders Relationship Committee

During the financial year 2015-16 no meeting of the Stakeholders RelationshipCommittee was held.


Since your Company does not own any manufacturing facility the particulars relating toconservation of energy and technology absorption stipulated in the Section 134(3)(m) ofthe Companies Act 2013 the Companies (Accounts) Rules 2014 are not applicable. Thedetails of foreign exchange earnings and expenditure of your Company appear in the Notesto Accounts.


Pursuant to sub-section 3(a) of Section 134 and sub-section (3) of Section 92 of theCompanies Act 2013 read with Rule 12 of the Companies (Management and Administration)Rules 2014 the extracts of the Annual Return as at March 31 2016 forms part of thisreport as Annexure 1.


The Company has not accepted fixed deposits from public within the purview of Section74 of the Companies Act 2013 during the year.


Particulars of contracts or arrangements with related parties referred to in Section188(1) of the Companies Act 2013 in the prescribed Form AOC-2 is appended as Annexure4.


Your Directors report that the Company has not granted any Loans Guarantees orInvestment in Securities under Section 186 of the Companies Act 2013.


There are no material changes and commitments affecting the financial position of theCompany which has occurred between the end of the financial year of the Company i.e. March2016 and the date of Director’s Report.


The Company is committed to adhere to the highest standards of ethical moral and legalconduct of business operations and in order to maintain these standards the Companyencourages its employees who have genuine concerns about suspected misconduct to comeforward and express these concerns without fear of punishment or unfair treatment. Themechanism provides for adequate safeguards against victimization of Directors andemployees who has availed the mechanism and Chairman of the Audit Committee shall have adirect access of the complaints and grievances under the mechanism. The details of VigilMechanism/Whistle Blower Policy are available on the website of the Company at


Pursuant to the provisions of Section 152 of the Companies Act 2013 Mr. AlfredArambhan Chairman and Managing Director (DIN: 00788831) retires by rotation at theensuing AGM and being eligible offers himself for re-appointment.

Rajiv Mudaliar was appointed to be Whole-time Key Managerial Personnel of the Companyunder the category of Chief Financial Officer with effect from 21st May 2015.

Alfred Micheal Arambhan was re-appointed as Chairman & Managing Director to be aWhole-time Key Managerial Personnel of the Company in pursuance to the applicableprovisions of the Companies Act 2013.

Pooja Alfred Arambhan resigned on 21st May 2015. However she was againappointed as Executive Director- Legal Compliance & Branding of the Company on 14thJanuary 2016.

Aarathi Alfred Arambhan resigned on 31st March 2016 due to herpre-occupations and other commitments.

Yateen Madhukar Chodnekar was appointed as Executive Director- Human Resource andInformation Technology on 14th January 2016.

Sagar Shah was appointed to be Whole-time Key Managerial Personnel of the Company underthe category of Company Secretary with effect from 21st May 2015.

John Philipose and Abhijit Pradhan were appointed as Independent Directors of theCompany on April 27 2015. Shashank More was appointed as Independent Director of theCompany on 12th June 2015.

David Romeo Arambhan was appointed to be Whole-time Key Managerial Personnel of theCompany under the category of Chief Executive Officer (CEO) with effect from 14THJanuary 2016.

Brief profile of Chairman & Managing Director proposed to be re-appointed asaforesaid is provided in the Exhibit in the Notice of Annual General Meeting forming partof this Annual Report.


The Company has received necessary declaration from each Independent Directors underSection 149(7) of the Act that he meets the criteria of independence laid down in Section149(6) of the Companies Act 2013 and Listing Regulations.


The Independent Directors met on January 14 2016 without the attendance of Non-Independent Directors and members of the Management. The Independent Directors interalia reviewed the performance of Non-Independent Directors and the Board as a whole; theperformance of the Chairman of the Company and assessed the quality quantity andtimeliness of flow of information between the Company Management and the Board that isnecessary for the Board to effectively and reasonably perform their duties.


The Companies Act 2013 stipulates the performance evaluation of the Directors Boardand its Committees. The Company has devised the criteria based on which the annualperformance evaluation of the Directors Board and Board Committees has been carried out.The criteria for performance evaluation of Independent Directors are mainly devised basedupon the parameter for professional conduct role functions and duties laid underSchedule IV of the Companies Act 2013. The Evaluation process focused on various aspectsof the functioning of the Board and Committees such as composition of the Board andCommittees participation in discussions etc. Performance evaluation of individualDirectors was on parameters such as attendance contribution constructive and activeparticipation etc. The Independent Directors at their separate Meeting evaluated theperformance of Non - Independent Directors including Chairperson of the Company and theBoard as a whole; the performance of the Chairman of the Company and assessed the qualityquantity and timeliness of flow of information between the Company Management and theBoard that is necessary for the Board to effectively and reasonably perform their duties.The performance of all directors was also evaluated by the Nomination and RemunerationCommittee. The Board of Directors considered the performance evaluation of the DirectorsBoard and Board Committees. The performance evaluation of the Independent Directors wascarried out by the entire Board excluding the concerned Director being evaluated and basedon the evaluation process the Board had determined to continue the term of all theIndependent Directors.


Pursuant to Section 134(5) of the Companies Act 2013 the Board of Directors of theCompany confirms that-

1. In preparation of the Annual Accounts the applicable accounting standards have beenfollowed along with proper explanations;

2. The Directors had 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 as at 31st March 2016 and ofthe profit or loss of the company for that period;

3. The Directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the company and for preventing and detecting fraud and other irregularities;

4. The Directors had prepared the Annual Accounts on a going concern basis;

5. The Directors had laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively;

6. The Directors had devised proper systems to ensure compliance with the provisions ofall applicable laws and that such systems were adequate and operating effectively.

AUDITORS Statutory Auditors:

M/s. Jagannath H.R. & Co. Chartered Accountants was appointed as the StatutoryAuditors of the Company to hold office for a period of five years i.e. from the conclusionof the Sixth Annual General Meeting of the Company until the conclusion of the EleventhAnnual General Meeting (to be held in the year 2020). However M/s. Jagannath H.R. &Co. resigned from the Company with effect from 18th August 2016. Therefore onthe recommendation of the Audit Committee and subject to the shareholders approval Boardof Directors appointed M/s. S S Rathi & Co. Chartered Accountants (Firm RegistrationNo. 108726W) Mumbai as the Statutory Auditors of the Company to hold office from 18thAugust 2016 until the conclusion of the 7th Annual General Meeting of the Company.

Further pursuant to the recommendation of the Audit Committee it is also proposed toappoint M/s. S S Rathi & Co. Chartered Accountants as Statutory Auditors of theCompany for a period of 5 continuous years i.e. from the conclusion of 7th Annual GeneralMeeting till the conclusion of 12th Annual General Meeting of the Company subject toratification by Shareholders at every Annual General Meeting.

The Auditors have confirmed that their appointment if made would be in accordancewith the Section 139 of the Companies Act 2013 and the rules made there under and thatthey are not disqualified in terms of Section 141 of the Act.


The Auditors Report to the Members on the Standalone and Consolidated FinancialStatements of the Company for the Financial Year ended 31st March 2016 doesnot contain any qualification reservation adverse remark or disclaimer. No frauds havebeen reported by auditors under sub-section (12) of Section 143 of the Companies Act2013.


Pursuant to Section 204 of the Companies Act 2013 the Board has appointed M/s.Abhishek Lakhotia & Co. Practising Company Secretaries as its Secretarial Auditors toconduct the Secretarial Audit of the Company for the financial year 2015-16. TheSecretarial Audit Report for the financial year ended March 31 2016 does not contain anyqualification reservation and adverse remark and is annexed to this report as


The Management Discussion and Analysis Report for the year under review as stipulatedunder Listing Regulations forms part of this Annual Report in Annexure 6


The Company has in place adequate internal financial controls with reference tofinancial statements. During the year no reportable material weakness in the design oroperation was observed in the internal financial controls.


Disclosures of the ratio of the remuneration of each director to the medianemployee’s remuneration and other details as required pursuant to Section 197(12) ofthe Companies Act 2013 read with Rule 5(1) of the Companies (Appointment and Remunerationof Managerial Personnel) Rules 2014 is annexed to this Report as Annexure 5.

None of the Directors of the Company are in receipt of any commission from the Companyor from any Subsidiary of the Company. The details of remuneration paid to the Directorsof the Company are given in ‘Annexure 1’ to this Report.


There are no significant material orders passed by the regulators or courts ortribunals which would impact the going concern status and company’s operations infuture.


Pursuant to the requirement of Section 134 of the Companies Act 2013 the Company hasalready in place a Risk Management Policy. The Company has a robust Risk Managementframework to identify and evaluate business risks and opportunities. The framework seeksto create transparency minimise adverse impact on the business objectives and enhance theCompany’s competitive advantage.


The Nomination and Remuneration Policy recommended by the Nomination and RemunerationCommittee is duly approved by the Board of Directors of the Company and is annexed to thisReport as Annexure 3. The Company for the year under review has not paid any remunerationand sitting fees to Non-Executive Directors.


The Company is in the process of forming the Sexual Harassment Committee. Howeverduring the year under review there were no cases filed pursuant to the Sexual Harassmentof Women at Workplace (Prevention Prohibition and Redressal) Act 2013.


Your Directors place on record their gratitude for the continuing support of clientsCharterers stakeholders Shareholders Investors shipping agents bankers insurancecompanies protection and indemnity clubs consultants and advisors various Governmentauthorities & departments Port trust authorities and Business allies &associatesfor their continuous support and co-operation at all levels. The Board further places onrecord its appreciation for the dedicated services rendered by the employees of theCompany.

Date: 29th August 2016 On Behalf of Board of Directors
Place: Mumbai Sd/-
Alfred Micheal Arambhan
Chairman & Managing Director

Annexure IV to Directors’ Report

i) The ratio of remuneration of each Director to the median remuneration of theemployees of the Company for FY 2015-2016 and the percentage increase in remuneration ofeach Director Chief Financial Officer Chief Executive Officer Company Secretary orManager if any in FY 2015-2016:

Name Designation Ratio of remuneration of each Director to median remuneration of Employees Percentage increase in Remuneration during FY 2015-16
Mr. Alfred Micheal Arambham Chairman Managing Director 56.92 -22%
Mrs. Nalini Maria Arambhan Director 12.49 -25%
Ms. Aarathi Alfred Arambhan Director 6.94 -25%
Ms. Pooja Alfred Arambhan * Director 1.16 --
Mr. Yateen Chodnekar Director 28.37 --
Mr. David Arambhan # Chief Executive Officer -- 11.11%
Mr. Rajiv Venugopal Mudaliar # Chief Financial Officer -- 67.40%
Mr. Sagar Shah # Company Secretary -- 14.29%
Mr. John Philipose ^ Independent Director -- --
Mr. Shashank More^ Independent Director -- --
Mr. Abhijit Pradhan^ Independent Director -- --


^ No remuneration or sitting fees was paid during the year to any of the IndependentDirectors.

* Percentage increase in Remuneration during FY 2015-16 is not applicable as Ms. PoojaAlfred Arambhan Executive Director was appointed w.e.f .14/01/2016.

** Percentage increase in Remuneration during FY 2015-16 is not applicable as Mr.Yateen Madhukar Chodnekar Executive Director was appointed w.e.f. 14/01/2016.

# David Arambhan CEO; Rajiv Mudaliar CFO and Mr. Sagar Shah CS were appointed duringthe FY 2015-2016 and Percentage increase in Remuneration during FY 2015-16 is applicabledue to increase in Salary during FY 2015-2016 itself.

The total number of employees on rolls of the Company as on March 31 2016 was 130.