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Country Club Hospitality & Holidays Ltd.

BSE: 526550 Sector: Services
NSE: CCHHL ISIN Code: INE652F01027
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VOLUME 7922
52-Week high 22.00
52-Week low 11.68
P/E
Mkt Cap.(Rs cr) 229
Buy Price 13.80
Buy Qty 213.00
Sell Price 14.00
Sell Qty 271.00
OPEN 13.90
CLOSE 13.75
VOLUME 7922
52-Week high 22.00
52-Week low 11.68
P/E
Mkt Cap.(Rs cr) 229
Buy Price 13.80
Buy Qty 213.00
Sell Price 14.00
Sell Qty 271.00

Country Club Hospitality & Holidays Ltd. (CCHHL) - Director Report

Company director report

To

The Members of

M/s. Country Club Hospitality & Holidays Limited

The Directors are pleased in presenting the 26th Annual Report of the Company togetherwith Audited Annual Accounts for the year ended 31st March 2017.

Financial Results:

Consolidated (Mar' 17)

Standalone (Mar' 17)

Particulars Current Previous Current Previous
Year Year Year Year
Total Income 45696.52 53308.11 26038.83 29328.57
Operating profit before interest depreciation and tax 10181.26 12860.25 4781.27 5770.93
Interest and financial charges 4311.18 4814.39 3557.89 3984.69
Depreciation 4540.68 4328.92 1924.30 1971.11
Profit before taxation 1329.40 3716.94 (700.92) (184.87)
Tax 841.12 1016.73 790.13 959.95
Profit after taxation 488.28 2700.20 (1491.05) (1144.82)
Transfer to General Reserves Nil Nil Nil Nil
Provision for dividend Nil Nil Nil Nil
Provision for dividend tax Nil Nil Nil Nil
Surplus carried to Balance Sheet 488.28 2700.20 Nil Nil

Statement of Affairs and Operations:

During the year under review the Consolidated turnover of the Company was Rs. 456.96Crores as compared to Rs. 533.08 Crores for the previous year. The Company is constantlystriving to improve its membership and hopes to achieve better results in the forthcomingyear.

Outlook:

India's travel and tourism industry is one of the most profitable industries in thecountry and also credited with contributing a substantial amount of foreign exchange.Indian tourism offers a potpourri of different cultures traditions festivals and placesof interest.

The country is one of the favorite tourist destinations from the year 2009 and willcontinue to be one of the favorite till 2018 in accordance to world travel and tourismCouncil (WTTC). Further the Travel and Tourism Competitiveness Report by World EconomicForum has ranked India at the sixth place in tourism and hospitality. Key segments of theIndian tourism and hospitality industry are:

• Accommodation and catering

• Transportation

• Attractions

• Travel agents

• Tour operators

The Indian tourism industry has been on an upswing for last few years partially due toan excellent 'Incredible India' campaign and is expected to Rise up to US$ 431.7 billionby the end of 2020.

The presence of world-class hospitals and skilled medical professionals make India apreferred destination for medical tourism. Tour operators are teaming up with hospitals totap this market.

Cruise shipping is one of the most dynamic and fastest growing components of the globalleisure industry. India with its vast and beautiful coastline virgin forests andundisturbed idyllic islands can be a fabulous tourist destination for cruise tourists.

India has potential to develop the rural tourism industry as most of its populationresides in rural areas. This can benefit the local community economically and sociallyand enable interaction between tourists and locals for a mutually enriching experience.

Number of meetings of the board:

8 Board Meetings & 5 Audit Committee Meetings were held during the Financial Year2016-17. The Meetings of the other committees of the Board were held during the year2016-17: 2 Nomination and Remuneration Committee meeting 1 Stake Holders relationshipCommittee 1 Independent Directors Meeting

For details pertaining to dates attendance of Directors for the said Meetings pleaserefer to the corporate governance report which forms part of this report.

Share Capital:

The Paid-up Share Capital of the Company stands at Rs. 326929470 (Rupees Thirty TwoCrores Sixty Nine Lakhs Twenty Nine Thousand Four Hundred and Seventy Only) as on 31stMarch 2017.

The entire Paid-up Share Capital of the Company is listed with both the StockExchange(s) namely M/s. BSE Limited and M/s. National Stock Exchange Of India Limited(NSE).

Management Discussion and Analysis:

Pursuant to Regulation 34 of SEBI (Listing Obligations & Disclosure Requirements)Regulations 2015 a report on the management discussion and analysis is enclosed herewith.

CONSERVATION OF ENERGY TECHNICAL ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:Additional information as required U/s 134 of the Companies Act 2013:

(a) Conservation of energy:
(i) Steps taken on Conservation of energy: The Company is continuously monitoring the consumption of energy and implements wherever necessary the required measures for conserving it.
(ii) Steps taken for utilizing alternate sources of energy:
(iii) Capital Investment on energy conservation equipments:
(b) Technology absorption:
(i) The efforts made towards technology: No technology - indigenous or foreign - is involved.
(ii) The benefits derived like products:
(iii) In case of imported technology imported during the last three years: No technology has been imported during the last three years.
(iv) Research and development (R&D) No research and development was carried out.
(c) Foreign Currency Earnings/Inflow NIL
Foreign Currency Expenditure / Outflow NIL

Extracts of Annual Return and other disclosures under Companies (Appointment &Remuneration) Rules 2014

The Extract of Annual Return in Form No. MGT-9 as per Section 134 (3) (a) of theCompanies Act 2013 read with Rule 8 of Companies Act (Accounts) Rules 2014 and Rule 12 ofCompanies (Management & Administration) Rules 2014 is annexed hereto and forms partof this report.

Particulars of Employees:

Information as per Rule 5(1) of Chapter XIII Companies (Appointment and Remunerationof Managerial Personnel) Rules 2014:

Name of Director Designation Remuneration FY 16-17 Remuneration in FY 15-16 % of remune- ration in 2017 as compared to 2016 Ration of remuneration to MRE
Y. Rajeev Reddy Chairman & Managing Director 8400000 8400000 Nil 70 times
Y.Siddharth Reddy Vice-Chairman JMD & CEO 3000000 3000000 Nil 25 times
Y. Varun Reddy Vice-Chairman JMD & COO 3000000 3000000 Nil 25 times
Key Managerial Personnel other than Directors:
Kudligi Phaneendra Rao Chief Financial Officer 2400000 2400000 Nil 20 times
Sreelatha V Company Secretary 300000 300000 Nil 2.5 times

1. The Median Remuneration of the employees of the Company during the financial yearwas Rs. 120000/-

2. In the financial year there was an increase of 5-10% in the median remunerationemployees.

3. There are 4820 permanent Employees on the Rolls of the Company as on 31st March2017.

4. The key parameters for the variable component of remuneration availed by thedirectors are considered by the Board of Directors based on the recommendations of theNomination and Remuneration Committee.

5. The ratio of the remuneration of the highest paid director to that of the employeeswho are not directors but receive remuneration in excess of the highest paid directorduring the year - N.A. and

6. It is hereby confirmed that the remuneration is as per the remuneration policy ofthe Company.

The remuneration paid to the Key Managerial Personnel of the Company is as perremuneration policy Particulars o f Employees receiving remuneration of Rs.10200000 ormore per annum or Rs.850000/ - or more per month:

Information as per Rule 5(1) of Chapter XIII Companies (Appointment and Remunerationof Managerial Personnel) Rules 2014. The Directors are to report that none of theemployees were in receipt of remuneration of Rs.10200000 or more per annum orRs.850000 or more per month.

Directors:

In accordance with the provisions of the Companies Act 2013 and the Articles ofAssociation of the Company Sri. Y. Rajeev Reddy Chairman & Managing Director of theCompany who retire by rotation at the 26th Annual General Meeting and being eligibleoffer himself for re-appointment.

Brief profile of the Managing Director for variation of terms of remuneration statingthe nature of the expertise in specific functional areas their shareholding along withother relevant details are given at the end of the Notice of the Annual General Meeting.

None of the directors of the Company are disqualified from being appointed as directorsas specified in section 164 of the Companies Act 2013 as amended.

Statement on Declaration given by Independent Directors under Sub-Section (6) ofSection 149 of the Companies Act 2013:

The Independent Directors have submitted the Declaration of Independence as requiredpursuant to Section 149 (7) of the Companies Act 2013 stating that they meet the criteriaof independence as provided in SubSection (6) of section 149 of Companies Act 2013.

Directors' Responsibility Statement:

Pursuant to the requirements under Section 134 of the Companies Act 2013 with respectto the Directors' Responsibility Statement the Board of Directors of the Company herebyconfirms: (a) that in the preparation of the annual accounts for the Financial year ended31st March 2017 the applicable accounting standards have been followed; (b) that thedirectors have selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the Company as at 31st March 2017 and Profit and LossStatement of the Company for that period; (c) that the directors have taken proper andsufficient care for the maintenance of adequate accounting records in accordance with theprovisions of Companies Act 2013 for safeguarding the assets of the Company and forpreventing and detecting fraud and other irregularities; (d) that the directors haveprepared the annual accounts for the financial year ended 31st March 2017 on a goingconcern basis; (e) that the directors have laid down internal controls to be followed bythe Company and that such internal financial controls are adequate and were operatingeffectively; (f) that the directors have devised proper systems to ensure compliance withthe provisions of all applicable laws and that such systems were adequate and operatingeffectively;

Related Party Transactions:

All the related party transactions are entered on arms length basis and are incompliance with the applicable provisions of the Act and the listing regulations. Thereare no materially significant related party transactions made by the Company during theFinancial Year 2016-17 which may have the potential conflict with the interest of thecompany at large.

Thus disclosure in Form AOC-2 is not required.

Auditors:

Pursuant to the provisions of Section 139 of the Companies Act 2013 and Rules madethereunder the term of office of M/s. P. Murali & Co. Chartered Accountants as theStatutory Auditors of the Company will conclude from the close of ensuing Annual GeneralMeeting of the Company. The Board of Directors places on record its appreciation to theservices rendered by M/s. P. Murali & Co. Chartered Accountants as the StatutoryAuditors of the Company. Subject to the approval of the Members the Board of Directors ofthe Company has recommended the appointment of M/s. Chandra Babu Naidu & Co.Chartered Accountants (ICAI Firm Registration Number 016016S) as the Statutory Auditors ofthe Company pursuant to Section 139 of the Companies Act 2013. Accordingly the Boardrecommends the resolution in relation to appointment of Statutory Auditors for theapproval by the shareholders of the Company.

M/s. Chandra Babu Naidu & Co. Chartered Accountants (ICAI Firm Registration Number016016S) have expressed their willingness to get Appointed as the statutory auditors ofthe Company (In place of M/s.P.Murali & Co. Hyderabad) furnished their certificate ofeligibility and consent for their Appointment under section 141 of the Companies Act 2013and the rules framed there under.

The Report given by the Auditors on the financial statements of the Company is part ofthe Annual Report. There has been no qualification reservation adverse remark ordisclaimer given by the Auditors in their Report.

Types of Committees:

The Company has 4 different Committees they are: a) Audit Committee

Composition of the Audit Committee:

The Audit Committee for the year was constituted of the following members:

Name of the Member Category
1. Sri Y. Subba Rao Chairman }
2. Sri D. V. Ratna Kishore Member Independent Directors
3. Sri D. Krishna Kumar Raju Member Non-Executive Director

Mrs. V. Sreelatha Company Secretary has acted as the Secretary to the Committee.

b) Nomination & Remuneration Committee

The Nomination and Remuneration Committee for the year was constituted of the followingmembers:

Name of the Member Category
1. Sri K. Satyanarayana Raju Chairman
2. Sri Y. Subba Rao Member } Independent Directors
3. Sri D. V. Ratna Kishore Member

c) Stakeholders Relationship Committee

The Stakeholders Relationship Committee was constituted of the following Directors:

Name of the Member Category
1. Shri Y. Subba Rao Chairman }
2. Shri Indukuri Venkata Subba Raju Member Independent Directors
3. Shri D. V. Ratna Kishore Member

Mrs. V. Sreelatha Company Secretary has acted as the Secretary to the Committee.

d) Corporate Social Responsibility Committee

The Corporate Social Responsibility Committee was constituted of the followingDirectors:

Name of the Member Category
1. Sri Venkateswara Dontireddy Reddy Chairman }
2. Sri Indukuri Venkata Subba Raju Member Independent Directors

3. Sri Y. Siddharth Reddy Member

Corporate Governance:

As required by Regulation 34 of SEBI(LODR) Regulations 2015 a separate sectioncontaining the Report on Corporate Governance together with the Certificate on thecompliance with the conditions of Corporate Governance issued by the Auditors of theCompany is appended hereto and they form part of this Annual Report.

Secretarial Audit

The Board of Directors have appointed M/s R. & A Associates a firm of practicingCompany Secretaries Hyderabad as the Secretarial Auditor to conduct Secretarial Audit ofthe Company for the Financial year ended 31st March 2017 in compliance with theprovisions of Section 204 of the Companies Act 2013.

The report of the Secretarial Audit Report by M/s. R & A Associates in Form MR-3is enclosed as Annexure to this Report.

Vigil Mechanism/Whistle Blower Policy :

The Board of Directors of the Company has adopted Whistle Blower Policy. This policy isformulated to provide an opportunity to employees and an avenue to raise concerns and toaccess in good faith the Audit Committee to the highest possible standards of ethicalmoral and legal business conduct and its commitment to open communication in case theyobserve unethical and improper practices or any other wrongful conduct in the Company toprovide necessary safeguards for protection of employees from reprisals or victimizationand to prohibit managerial personnel from taking any adverse personnel action againstthose employees.

Details of adequacy of internal financial controls

The company has in place adequate internal financial controls with reference tofinancial statements. In addition the Company has also appointed M/s. B.N & CompanyChartered Accountants as the Internal Auditors of the Company to conduct the regularInternal Audit and place its Report before the Audit Committee. During the year suchcontrols were tested and no reportable material weakness in the design or operation wasobserved.

Change in the Nature of Business:

There has been no change in the nature of business of the Company during the financialyear under review.

The details of significant material orders passed by the regulators or courts ortribunals impacting the going concern status and Company's operations in future:

No significant or material orders were passed by the regulators or courts or tribunalsimpacting the going concern status and company's operations in future during the yearunder review

Material changes and Commitments:

There were no material changes and commitments in the business operations of theCompany from the Financial Year ended 31st March 2017 to the date of signing of theDirector's Report.

Risk Management Policy

The Company has policy for identifying risk and established controls to effectivelymanage the risk. Further the company has laid down various steps to mitigate theidentified risk.

Mechanism for Board Evaluation:

Pursuant to Regulation 17 of the SEBI (LODR) Regulations2015 and section 134 of theCompanies Act 2013 states that the board shall monitor and review the board evaluationframework. The Companies Act 2013 states that a formal annual evaluation needs to be madeby the Board of its own performance and that of its committees and individual directors.Schedule IV of the Companies Act 2013 states that the performance evaluation of theindependent directors shall be done by the entire Board of Directors excluding thedirector being evaluated.

The Directors evaluation was broadly based on the parameters such as understanding ofthe Company's vision and objective skills knowledge and experience participation andattendance in Board/ Committee meetings; governance and contribution to strategy;interpersonal skills etc.

The Board has carried out the annual performance evaluation of its own performance theDirectors individually as well as evaluation of the working of its Board Committees. Astructures questionnaire was prepared covering various aspects of the Board's functioningsuch as adequacy of the composition of the Board and its Committees Board Cultureexecution and performance of specific duties obligations and governance.

A meeting of the Independent Directors was also held which reviewed the performance ofNon-Independent Directors Chairman and the quality quantity and timelines of flow ofinformation between the Company management and Board.

Disclosure pertaining to sexual harassment of women at workplace:

During the Financial year ended 31st March 2017 the Company has neither received anycomplaints nor there are any pending complaints pertaining to sexual harassment.

Subsidiary Companies:

Pursuant to Section 129(3) of the Companies Act 2013 a statement consisting salientfeatures of financial statements of subsidiaries associates and joint venture companiesin Form AOC-1 is attached. The Company has twenty two (22) subsidiary outfits as on 31stMarch 2017:

Domestic Subsidiaries:

1. Aquarian Realtors Private Limited

2. Bush Betta Holiday Ownership Wildlife Adventure Resort Private Limited

3. Bright Resorts Private Limited

4. Chanakyapuri Resorts Private Limited

5. Club Arzee Limited

6. International Country Holidays Private Limited

7. Jade Resorts Private Limited*

8. J J Arts & Entertainments Private Limited

9. Kolet Resort Club Private Limited*

10. Maruti Waterpark and Entertainments Private Limited 11. Country VacationsInternational Limited India

12. Swami Vivekanand Training and Education Centre Private Limited 13. SwimwelInvestment and Trading Private Limited

International Subsidiaries:

1. Country Club Babylon Resort Private Limited Sri Lanka

2. Country Vacations International Limited Dubai

3. Country Vacations International LLC Dubai*

4. Country Vacations International LLC Oman*

5. Country Vacations International LLC Abu Dhabi*

6. Country Vacations International W.L.L Bahrain*

7. Country Club and Vacations WLL Qatar*

8. Country Vacations International SDN BHD Malaysia*

9. Country Vacations International Limited London*

* Has become subsidiary of the Company under Section 2(87) of the Companies Act 2013.

The Ministry of Corporate Affairs (MCA) has through its General Circular No. 2/2011dated 08th February 2011 has granted general exemption to all the Companies from therequirement to attach various documents in respect of Subsidiary Companies as set out inSection 129 of the Companies Act 2013. Accordingly Balance sheet Profit and Loss Accountand other documents of the Subsidiary Companies are not being attached with the balancesheet of the Company.

Further your Company hereby undertakes that Annual Accounts of the Subsidiary Companiesand the related detailed information shall be made available to the Shareholders of theCompany and Subsidiary Companies seeking such information at any point of time. The AnnualAccounts of the Subsidiary Companies shall also be kept open for inspection by theShareholders at the Registered Office of the Company and of the Subsidiary Companiesconcerned. The Company shall furnish a hard copy of details of Accounts of Subsidiaries toany shareholder on demand.

Personnel:

The relationship between the management and the staff was very cordial throughout theyear under review. Your Directors take this opportunity to record their appreciation forthe cooperation and loyal services rendered by the employees.

Deposits:

The Company has not accepted any deposits during the year under review.

Particulars of Loans Guarantees and Investments:

There were no fresh Loans Guarantees and Investments made by the Company under Section186 of the Companies Act 2013 during the year under review.

Acknowledgments:

Your Directors wish to place on record their appreciation for the support extended bygovernment authorities bankers customers and shareholders of the Company.

Your Directors also wish to place on record their appreciation for the sincere servicesrendered by the employees of your Company during the year. Their dedication teamwork andefficiency have been commendable.

For and on behalf of the Board For Country Club Hospitality & Holidays Limited
Date: 11th August 2017 Y. Varun Reddy Y. Siddharth Reddy
Place: Hyderabad Vice-Chairman JMD & COO Vice-Chairman JMD & CEO
DIN: 01905757 DIN: 00815456