To the Members
Your Directors have pleasure in presenting the 9 Annual Report of the Company togetherwith the audited financial statements of the Company for the financial year ended 31stMarch 2016.
Your Company's performance for the year ended 31 March 2016 is summarised as under:
|Particulars ||Standalone ||Consolidated |
| ||(Rs. in lacs) ||(Rs. in lacs) |
| ||2015-16 ||2014-15 ||2015-16 ||2014-15 |
|Revenue from operations ||9809.26 ||9952.33 ||19273.40 ||18841.42 |
|Profit before Depreciation and Tax Expenses ||1606.73 ||2804.10 ||1908.49 ||(177.47) |
|Less: Depreciation ||685.33 ||712.00 ||3139.15 ||3151.53 |
|Profit /(Loss) Before Tax ||921.40 ||2092.10 ||(1230.66) ||(3329.00) |
|Less: Current Tax ||171.72 ||679.74 ||173.91 ||679.74 |
|Deferred Tax ||(50.56) ||(107.58) ||(50.56) ||(107.58) |
|MAT Credit ||(40.97) ||- ||(43.16) ||- |
|Others ||22.05 ||16.50 ||22.05 ||16.26 |
|Profit after tax before adjustment of minority interest ||819.16 ||1503.44 ||(1332.90) ||(3917.42) |
|Add: Share of loss transferred to minority interest ||- ||- ||691.15 ||1728.80 |
|Profit for the year ||819.16 ||1503.44 ||(641.75) ||(2188.62) |
|Add: Balance in profit & loss account ||18978.96 ||18512.78 ||9892.68 ||13118.56 |
|Less: Transferred to General Reserve ||150.00 ||150.00 ||150.00 ||150.00 |
|Others ||- ||611.87 ||- ||611.87 |
|Proposed Dividend on Equity Shares ||228.81 ||228.81 ||228.81 ||228.81 |
|Tax on Dividend ||46.84 ||46.58 ||46.84 ||46.58 |
|Closing Balance ||19372.47 ||18978.96 ||8825.28 ||9892.68 |
TRANSFER TO RESERVES
During the financial year 2015-16 an amount of Rs. 150 lacs (Rs. 150 lacs last year)has been transferred to General Reserve out of amount available for appropriations.
The Board of Directors are pleased to recommend a dividend @ 20% i.e. Rs. 2/- perequity share (previous year Rs. 2/- per equity share) on 11440585 equity shares of Rs.10/- each for the year ended 31 March 2016. The total cost to the Company on account ofdividend payment will be
Rs. 275.65 lacs including dividend distribution tax of Rs. 46.84 lacs resulting in apayout of 33.65 % of the standalone profits after tax of the Company.
BUSINESS OVERVIEW AND OPERATING PERFORMANCE
During the financial year 2015-16 Hyatt Regency Kolkata (the hotel) has beensuccessful in securing major project based business and could sustain its leading positionin wedding related business in the city. Major achievement has been in the field ofmedical conferences held during the year. Further your hotel could secure long stayingprojects business from the service sector repeated relating business of Indian SuperLeague (ISL) and outdoor catering business.
New hotels opening in the city had a major impact on the pricing policies of your hotelas their pricing strategy in the beginning was very aggressive and put all the existinghotels in Kolkata under pressure. Considering the influx in supply which your Company isanticipating in the year 2016-17 adding value to our customer experience is becomingcrucial. This is measured by the hotel online surveys where the hotel could achieve in2015-16 at 47.8% in Net Promoter Score. Satisfaction of the hotel's customers was thesatisfaction index for the hotel which was at a very high rate with 4.69% for two yearsmeasured by Gallup and also for the "Great places to work" resulted in HyattRegency Kolkata achieving together with Hyatt India a ranking under the top 10. Therewere no material changes and commitments affecting financial position of the Company whichhave occurred between the end of the financial year of the Company to which the financialstatements and this report relate. However the Company has repaid in full the short termloan of Rs. 165 crores to ICICI Bank Ltd. and accordingly as on the date of this Reportthere is no outstanding loan of the Company.
The Company has two subsidiaries namely GJS Hotels Limited a wholly owned and amaterial non-listed Indian Subsidiary Regency Convention Centre and Hotels Limited andone step-down subsidiary namely Robust Hotels Private Limited. There has been nosignificant developments in the matters concerning the subsidiaries during the year underreview.
With reference to GJS Hotels Limited your Board is exploring various options to builda luxury 5 star deluxe hotel at Bhubaneswar Odisha. Present plot of land at Bhubaneswaris not suitable for such hotel. Feasibility study findings are being reviewed to explorevarious possibilities. During the year the loan amount invested in Robust Hotels PrivateLimited Chennai through GJS Hotels Limited was repaid in full out of the redemptionproceeds of the mutual funds of the Company.
With reference to Regency Convention Centre and Hotels Limited during the year yoursubsidiary has entered into an agreement with Mumbai International Airport Pvt. Limited(MIAL) for alternate pocket of land admeasuring 9775.95 sq. mtrs. at CSI Airport Mumbai.Your Board is hopeful of a positive outcome.
Robust Hotels Private Limited (Robust) at Chennai has shown improved performance duringthe year under review. Revenue has increased to Rs.95.07 crores as against Rs.89.34 croresin the previous year. Room occupancy has increased to 67% as compared 59% in the previousyear. EBDITA has increased to Rs. 25.18 crores from Rs.21.50 crores. Robust could meet theprincipal re-payment of the lender amounting to Rs.4.70 crores out of internal accrualsduring the year. Robust has for the first time since commencing business made cash profit(PBDT) of Rs.2.92 crores. Your directors are hopeful of better performance of Robust inthe current financial year also.
In terms of proviso to sub section (3) of Section 129 of the Companies Act 2013 areport on the performance and financial position of each of the subsidiaries of theCompany is annexed herewith marked as Annexure I to this Report.
None of your subsidiary company has ceased to be subsidiaries during the year and nocompany has become the new subsidiary company during the financial year.
In respect of the Scheme of Amalgamation (the Scheme) of Forex Finance Private Limitedwith your Company pursuant to the Sections 391-394 of the Companies Act 1956 the Schemeis pending before the High Court at Calcutta for sanction. Your Board is hopeful thatduring the current financial year 2016-17 the Scheme would be sanctioned by the Court.
AUDITORS & AUDITORS' REPORT
M/s S.S. Kothari Mehta & Co. Chartered Accountants Kolkata (Firm RegistrationNo. 000756N) was appointed as Statutory Auditors of the Company at the Annual GeneralMeeting held on 30 July 2014 for 3 consecutive years subject to ratification in everyannual general meeting by way of passing of an ordinary resolution. Their appointment wasratified at the Annual General Meeting held on 31 July 2015. Therefore ratification ofappointment of Statutory Auditors is being sought from the members of the Company at theensuing Annual General Meeting.
M/s KSMN & Co. Chartered Accountants has expressed its unwillingness to beappointed as an Internal Auditor of the Company for the financial year 2016-17. Your Boardis looking for new internal auditors for the financial year 2016-17. Your Boardappreciated the service rendered by M/s. KSMN & Co. Chartered Accountants as theinternal auditor of the Company during its tenure.
The Board has appointed M/s. D. Raut & Associates Practicing Company Secretariesto conduct Secretarial Audit under the provisions of Section 204 of the Companies Act2013 for the financial year 2015-16. The Secretarial Audit Report for the financial yearended 31 March 2016 is annexed herewith marked as Annexure II to this Report. TheSecretarial Audit Report does not contain any qualification reservation or adverseremark.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
Mr. Radhe Shyam Saraf (DIN No. 00017962) Director retires by rotation and beingeligible offers himself for reappointment at the ensuing Annual General Meeting.
No Director or Key Managerial Personnel was appointed or resigned during this yearexcept Ms. Rita Bhimani whose appointment was regularised at Annual General Meeting heldon 31 July 2015 as an Independent Director. Details of Directors seeking re-appointmentas required under Regulation 36(3) of SEBI (Listing Obligations & DisclosureRequirements) Regulation 2015 are given in the notice calling Annual General Meeting ofthe Company.
The Company has received declarations from all the Independent Directors of the Companyconfirming that they meet the criteria of independence as prescribed under Section 149(6)of the Companies Act 2013.
BOARD EVALUATION AND NOMINATION & REMUNERATION POLICY
During the year pursuant to Section 134(3)(p) Schedule IV (VIII) of the CompaniesAct 2013 and Regulation 17(10) and 19(4) of the Securities and Exchange Board of India(Listing Obligations and Disclosures Requirements) Regulations 2015 (Listing Regulations)the performance evaluation of Directors Board and Committee was done at three levels bythe Independent Directors at a separate meeting Nomination and Remuneration Committee andBoard. Firstly the independent directors of the Company at their meeting held on 10thMarch 2016 had already carried out the evaluation of performance of the non-independentdirectors the Board and the Chairman of the Company as per the prescribed criteriaadopted by the Board at its meeting held on 30th October 2015. Secondly the Nominationand Remuneration Committee carried out evaluations as appropriate and whenever requiredas per the prescribed criteria adopted by the Board. Lastly the Board of Directors hascarried out an annual evaluation of performance of independent directors its own theCommittees and individual directors based on the evaluation marking by the Directors. Theperformance was evaluated by the Board on the basis of the criteria such as thecomposition of Board and Committee and structure effectiveness of Board and committeeprocesses information and functioning. The performance was considered satisfactory. ThePolicy on performance evaluation of Directors can be accessed on the Company's website:www.ahleast.com. The Nomination & Remuneration Policy of the Company is annexedherewith and marked as Annexure III to this Report.
A diverse Board enables efficient functioning through differences in perspective andskill and also fosters differentiated thought processes at the back of varied industrialand management expertise gender knowledge and geographical background. Your Boardrecognises the importance of a diverse composition and has adopted a Board DiversityPolicy which sets out the approach to diversity. The Board diversity policy is availableon our website www.ahleast.com.
DIRECTORS' RESPONSIBILITY STATEMENT
The Board of Directors acknowledges the responsibility for ensuring compliance with theprovisions of Sections 134(3)(c) and 134(5) of the Companies Act 2013 in the preparationof the annual accounts for the financial year ended 31 March 2016 and state that:
a) in the preparation of the annual accounts for the year ended 31 March 2016 theapplicable accounting standards have been followed along with proper explanation relatingto materials 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 underreview and of the profit or 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 are operatingeffectively; and
f) the Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems are adequate and operating effectively.
PARTICULARS OF ENERGY CONSERVATION TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGSAND OUTGO
The information required pursuant to Section 134(3)(m) of the Companies Act 2013 readwith Rule 8(3) of the Companies (Accounts) Rules 2014 pertaining to conservation ofenergy technology absorption and foreign exchanges earning and outgo to the extentpossible in the opinion of your Directors is annexed hereto being Annexure IV andforming part of this Report. The Company's earnings and outgo in foreign exchange for theyear under review were Rs. 2489.96 lacs/Rs. 987.38 lacs respectively.
PARTICULARS OF EMPLOYEES
As per Rules 5(2) & (3) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 a statement showing the names and other particulars ofthe employees drawing remuneration in excess of the limits set out in the said rules areprovided as Annexure V and forming part of this Report.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
There were no contracts or arrangements entered into by the Company in accordance withthe Section 188 of the Companies Act 2013 and no material related party transactions interms of Regulation 23 of the Listing Regulations. All related party transactions thatwere entered by the Company during the financial year were in the ordinary course ofbusiness and on arm's length basis. All related party transactions are presented to theAudit Committee and the Board for approval.
The Policy on materiality of related party transactions and dealing with related partytransactions as approved by the Board can be accessed on the Company's website :www.ahleast.com. The details of the transactions with related parties are provided in theaccompanying financial statements.
MANAGEMENT DISCUSSION AND ANALYSIS AND CORPORATE GOVERNANCE
Pursuant to Schedule V of Regulation 34(3) of the Listing Regulations Report onManagement Discussion and Analysis as Annexure- VI and Corporate Governance as Annexure-VIIand Compliance Certificate on Corporate Governance are annexed to this Report.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
As required under Section 135 of the Companies Act 2013 during the financial year2015-16 your Company has spent Rs. 50 lacs being 2% of average net profit of the Companymade during three (3) immediately preceding financial years on the SuperspecialityHospital Project at Dehradun Uttarakhand undertaken by a registered society. The AnnualReport on CSR activities is annexed and marked as Annexure -VIII to this report.The same is also displayed on the Company's website : www.ahleast.com.
Besides the above Hyatt Regency Kolkata (the hotel) has also been involved in many CSRactivities under our "Hyatt Thrive" umbrella. The focus area during the yearunder review has been the immediate community area of your hotel and Kathmandu Nepal forthe earthquake. Also the hotel is continuously involved with "Ek Tara" a girlseducation and women empowerment initiative where your hotel explain and offer some of thewomen the "Hunar se rozgar" program to get an introduction to hospitality andfor possible future employment. Further your hotel has organized a blood donation Campwith the Lion's Club and also helped the start of a new slum school in Salt Lake"Hope Center" run by an Australian couple and provided support as and whenrequired. Also during the Christmas time the hotel first time supported the "JungleCrows" a NGO working with children and teenagers teaching them Rugby a team sportwhich educates social skills and confidence. As a part of community service the hotelcontinues to support "Tiljala Shed" with "Clothes for a Cause" incollaboration with its corporate clients.
INTERNAL FINANCIAL CONTROL POLICY AND ITS ADEQUACY
The Board has adopted an Internal Financial Control Policy to be followed by theCompany and such policies and procedures adopted by the Company for ensuring the orderlyand efficient conduct of its business including adherence to Company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information. The Audit Committee evaluates the internal financialcontrol system periodically. The observation and comments of the Audit Committee areplaced before the Board.
Your Board reviews and observes risk management and minimization procedures followed bythe Company which are adequate and operating effectively. Although risk management policyand risk management committee is not applicable to your Company under the purview of thelaw the system established in the Company to identify assess manage monitor andmitigate risk and control is considered sufficient and adequate. Risk Management is anintegral part of the Company's business process. In your Company risks are carefullymapped and a risk management framework is involved.
A) EXTRACT OF ANNUAL RETURN
Extract of Annual Return of the Company is annexed herewith as Annexure-IX tothis Report.
B) MEETINGS OF THE BOARD
During the financial year 2015-16 the Board of Directors had four (4) meetings. Thesewere held on 28 May 2015 31 July 2015 30 October 2015 and 4 February 2016.
C) COMPOSITION OF AUDIT COMMITTEE
The Audit Committee comprises of three (3) Directors amongst which two (2) areIndependent Non-Executive Directors namely Mr. A. C. Chakrabortti and Mr. Rama ShankarJhawar and one (1) is Joint Managing Director namely Mr. Umesh Saraf. All therecommendations made by the Audit Committee were accepted by the Board.
D) VIGIL MACHANISM/WHISTLE BLOWER POLICY
Pursuant to Section 177 of the Companies Act 2013 read with Regulation 22 of theListing Regulations the Board of Directors at its meeting held on 30 October 2015 hasadopted a vigil mechanism/whistle blower policy of the Company. The policy provides aframework for directors and employees to report genuine concerns about unethical behavioractual or suspected fraud or violation of the Company's code of conduct or ethics policy.Protected disclosures can be made by a whistle blower through an email or to the Chairmanof the Audit Committee. The vigil mechanism/whistle blower policy can be accessed on theCompany's website : www.ahleast.com
E) DISCLOSURE AS PER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013
The Company has zero tolerance towards sexual harassment at workplace and has anInternal Complaints Committee to consider and redress complaints of sexual harassment& also adopted a policy on prevention prohibition and redressal of sexual harassmentat workplace in line with the provisions of Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013 and the rules framed thereunder. Duringthe financial year 2015-16 the Company has received no complaints on sexual harassment.
F) PARTICULARS OF LOANS GIVEN INVESTMENT MADE GUARANTEES GIVEN AND SECURITY PROVIDED
The particulars of loans guarantees and investments have been disclosed in thefinancial statements.
G) PARTICULARS OF REMUNERATION
Disclosures pertaining to managerial remuneration and other details as required underSection 197(12) of the Companies Act 2013 read with Rule 5(1) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 are provided as Annexure-Xto this report.
Your Directors state that no disclosure or reporting is required in respect of thefollowing items as there were no transactions on these items during the financial year2015-16 under review:
1. Details relating to deposits covered under Chapter V of the Companies Act 2013.
2. Issue of equity shares with differential rights as to dividend voting or otherwise.
3. Issue of shares (including sweat equity shares) to employees of the Company underany scheme.
4. The Joint Managing Directors of the Company did not receive any remuneration orcommission from any of its subsidiaries.
5. No significant or material orders were passed by the Regulators or Courts orTribunals which impacted the going concern status and Company's operations in future.
Your Directors wish to place on record their appreciation towards all associatesincluding customers the Government of India Government of West Bengal GovernmentAgencies Hyatt Hotels Corporation USA Bankers Suppliers Shareholders Employees andothers who have reposed their confidence in the Company.
| ||For and on behalf of the Board of Directors || |
|Place: Kolkata ||Umesh Saraf ||Rama Shankar Jhawar |
|th || || |
|24 May 2016 ||Joint Managing Director ||Director |