Your Directors are pleased to present the 29th Annual Report together withthe Audited financial statement of the Company for the year ended 31 st March2016.
The financial summary for the year under review is as below:
(Rs. in lakhs)
|Particulars ||Year ended March 31 2016 ||Year ended March 31 2015 |
|Total Income ||15816.20 ||13930.63 |
|Profit Before Interest Depreciation & Taxation ||4673.33 ||3316.48 |
|Less: Interest and Finance Charges (net) ||3946.43 ||7948.21 |
|Less: Depreciation ||1280.04 ||1837.84 |
|Profit Before Exceptional Item and Tax ||(553.14) ||(6469.57) |
|Add/(Less): Exceptional Item ||(8092.30) ||- |
|Profit Before Tax ||(8645.44) ||(6469.57) |
|Less: Provision for current tax ||- ||117.18 |
|Prior Period Adjustment Income Tax ||(117.17) ||26.09 |
|Deferred tax ||- ||(541.19) |
|MAT Credit entitlement ||- ||155.96 |
|Profit After Tax but before Adjustments & Appropriations ||(8528.27) ||(5915.69) |
|Less: Prior Period Adjustments (Net) ||- ||- |
|Net (Loss)Profit after tax ||(8528.27) ||(5915.69) |
|Amount proposed to be carried to reserves ||- ||- |
|Add: Surplus / (Deficit) Brought Forward from previous year ||(20603.92) ||(17895.31) |
|Balance carried over to Balance Sheet ||(29132.19) ||(20603.92) |
STATE OF COMPANYS AFFAIRS
The average occupancy level of The Orchid Mumbai was around 79% as compared to 69%in the previous year. The average occupancy level of VITS Mumbai was around 80% ascompared to 72% in the previous year. The Average Room Rate during the year under reviewwas at Rs. 5553/- at The Orchid Mumbai as compared to Rs. 5355/- in the previous yearand at Rs. 3518/- at VITS Mumbai as compared to Rs. 3284/- in the previous year.
The total turnover of the Company for the year was recorded at Rs. 15816.20 lakhs (ofwhich the turnover of Rs. 9000.36 lakhs pertains to The Orchid Mumbai Rs. 2905.08lakhs to VITS Mumbai and Rs.3910.76 lakhs to other units) as against Rs. 13930.63 lakhsin the previous year a increase of around 13.54% over the last year. The Company hasregistered loss after tax of Rs. 8528.27 lakhs as compared to loss of Rs. 5915.69 lakhsin the previous year.
MANAGEMENT / FRANCHISEE CONTRACTS
The Company has franchisee agreement for properties at VITS Aurangabad Vithal KamatsOriginal Family Restaurants at Shahapur Nashik and Solapur.
EXPLANATION AND COMMENTS ON QUALIFICATION MADE BY SECRETARIAL AUDITOR
Due to failure of the CDR mechanism in earlier year on account of and due to financialstringencies the Company could not repay the loans and interest dues to its lendersincluding to those lenders who did not participate in CDR package. Consequently thelenders issued notices Under Section 13(2) of the Securitisation and Reconstruction ofFinancial Assets and Enforcement of Security Interest Act 2002 and recalled the entiredues. IL& FS Financial Services Ltd filed suit for recovery of theentireduesduringthefinancialyear which is pending before the Bombay High
Court and the Company has disputed the claim. In terms of interim orders passed by theHigh Court the Company has been depositing proceeds of its credit card collections withthe Prothonotary & Senior Master of the High Court. The Company has not made provisionfor interest on this loan as per loan agreement and final adjustment will be made ondisposal of the application in due course of time.
In view of loss incurred by the Company during the year under review the Board ofDirectors does not recommend any dividend for the financial year ended 31stMarch 2016 (Previous year NIL).
During the year under review there was no change in the Authorised or Paid up ShareCapital of the Company.
MATERIAL CHANGES AND COMMITMENTS
There have not been any material changes and commitment affecting the financialposition of the Company during the financial year 2015-16.
REPORT ON THE PERFORMANCE AND FINANCIAL POSITION OF EACH OF THE SUBSIDIARIESASSOCIATES AND JOINT VENTURE COMPANIES IN TERMS OF RULE 8(1) OF COMPANIES (ACCOUNTS)RULES 2014
In accordance with the provisions of Companies Act 2013 ("the Act") SEBI(LODR) Regulations 2015 and Accounting Standard (AS) - 21 on Consolidated FinancialStatements the audited consolidated financial statements form part of the
In view of this the Balance Sheet Statement of Profit andLoss and other relateddocuments of the subsidiaries are not attached in this Annual Report. A copy of AuditedFinancial Statements of the Subsidiaries shall be made available for inspection at theRegistered Office of the Company during business hours. Any shareholder interested inobtaining a copy of separate Financial Statements of the subsidiaries shall make specificrequest in writing to the Secretarial Department.
The Audited Financial Statements of the subsidiaries are also available on the websiteof the Company
As on 31st March 2016 the Company had the following subsidiaries / jointventures / associate Company:
1. Orchid Hotels Pune Private Limited (OHPPL)
2. Fort Mahodadhinivas Palace Private Limited (FMPPL)
3. Kamats Restaurants (India) Private Limited (KRIPL)
4. Fort Jadhavgadh Hotels Private Limited (FJHPL)
5. Green Dot Restaurants Private Limited. (GDRPL)
Joint Venture Company / Associate Company:
Ilex Developers & Resorts Limited (IDRL)
A report on the performance and financial position of each of the subsidiariesassociates and joint venture companies as per the Companies Act 2013 is provided in formAOC 1 as at page No.116 and note number 37 to the consolidated financial statementand hence not repeated here for the sake of brevity.
DETAILS OF DIRECTORS AND KEY MANAGERIAL PERSONNEL APPOINTED OR RESIGNED DURING THE YEARAS PER RULE 8(5) OF COMPANIES (ACCOUNTS) RULES 2014
Mr. Vikram V. Kamat resigned from the office of Director of the Company w.e.f. 15thJune 2016 due to his other commitments. The Board of Directors place on record itssincere appreciation for the valuable guidance and co-operation extended to the Company byMr. Vikram V. Kamat during his tenure.
Mr. Vikram V. Kamat was liable to retire by rotation at the ensuing 29th Annual GeneralMeeting however due to his resignation from the office of Director of the Company w.e.f15th June 2016 the Company is left with no other director whose term shall be liable toretire by rotation. Presently the Company has three Directors; Chairman cum ManagingDirector and two Independent Directors all of whose terms are not liable to retire byrotation. Hence none of the Directors of the Company are liable to retire by rotation atthe ensuing 29th Annual General Meeting of the Company.
The Company has appointed Mr. Bipinchandra Chunilal Kamdar as an Additional Director onthe Board of the Company w.e.f 6th August 2016. The term of Mr. Kamdar as an AdditionalDirector will expire on the date of the ensuing 29th Annual General Meeting of theCompany. The Company has received a notice in writing along with requisite securitydeposit under provisions of Section 160 of the Companies Act 2013 from a member proposingthe candidature of Mr. Kamdar as a Director of the Company. The Notice convening the 29thAnnual General Meeting contains necessary resolution for his appointment as a Director ofthe Company.
During the year under review Mr. Kurian Chandy Chief financial Officer and Mr. MaheshKandoi Company Secretary resigned from their respective posts with effect from 13thFebruary 2016. Thereafter on 28th May 2016 the Company appointed Mr. G.N. Shenoy asthe Chief Financial Officer of the Company However Mr. G.N. Shenoy left for heavenlyabode on 5th June 2016.
STATEMENT ON DECLARATION BY INDEPENDENT DIRECTOR:
Mr. D. D. Jadhav and Ms. Himali H. Mehta Independent Directors of the Company havegiven their respective declaration as required under Section 149(7) of the Companies Act2013 to the effect that they meet the criteria of independence as provided in Section149(6) of the Companies Act 2013 which were taken on record by the Board.
FAMILIARISATION PROGRAMMES FOR INDEPENDENT DIRECTORS
The Company has conducted Familiarisation Programmes to familiarize the IndependentDirectors of the Company. Details of the same are disclosed on the website of the Companyand the weblink of the same ishttp://www.khil.com/hospitality-management/Familiarization%20 Programmes.pdf
EXTRACT OF ANNUAL RETURN
An extract of Annual Return in Form MGT 9 as provided under sub-section (3) of Section92 of the Companies Act 2013 is enclosed as Annexure A forming part of theBoards Report.
NUMBER OF MEETINGS OF THE BOARD
During the financial year 2015-16 four meetings of the Board of Directors were held.The dates of Board meetings are given in the Corporate Governance section forming part ofthe Boards Report
DIRECTORS RESPONSIBILITY STATEMENT
As required by Section 134 (3) (c ) and 134 (5) of the Companies Act 2013 theDirectors hereby state that:
1. in the preparation of the annual accounts the applicable accounting standards havebeen followed and that there are no material departures.
2. selected accounting policies were applied consistently and made judgments andestimates that are reasonable and prudent so as to give a true and fair view of the stateof affairs of the Company as at 31st March 2016 and of the loss of the Companyfor the financial year ended on that date.
3. proper and sufficient care has been taken for the maintenance of adequate accountingrecords in accordance with the provisions of the
Companies Act 2013 for safeguarding the assets of the Company and for preventing anddetecting fraud and other irregularities to the best of the Directors knowledge andability.
4. the annual accounts have been prepared on a going concern basis.
5. Internal Financial Controls to be followed by the Company have been laid down andthe said Internal Financial Controls are adequate and are operating effectively and; 6.proper systems have been devised to ensure compliance with the provisions of allapplicable laws and that such systems are adequate and are operating effectively.
NOMINATION AND REMUNERATION POLICY
In terms of Section 178 (3) of the Companies Act 2013 and SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015 (LODR) entered in to with the stockexchanges a policy on Nomination and Remuneration of Directors and Senior ManagementEmployees including inter alia criteria for determining qualifications positiveattributes independence of directors and policy on Board Diversity was formulated by the
Nomination and Remuneration Committee and adopted by the Board of Directors at theirrespective meetings held on 22nd March 2014. However to bring the said policyin line with the new LODR it was further modified at the meeting of the Board held on 7thNovember 2015. The said policy is annexed as Annexure B to the BoardsReport. The said policy is also posted on the website of the Company www.khil.com and itsweblink ishttp://www.khil.com/hospitality-management/NOMINATION%20AND%20REMUNERATION%20POLICY.pdf.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186:
The particulars of Loan given Guarantees given and Investment made by the Companyunder Section 186 of the Companies Act 2013 are given as under: (Rs. in lakhs)
| ||Particulars ||Opening Balance ||During the year ||Closing Balance |
|Loans Given || ||20474.06 || ||20474.06 |
|Guarantee given or ||Guarantee given 20434.00 ||20786.94 ||- ||20786.94 |
|Security Provided ||Security provided 352.94 (given to wholly owned subsidiary) || || || |
|Investment Made || ||9884.53 ||- ||556.24* |
*Net of provision for diminution made during the year.
PARTICIULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTY REFERRED TO IN SUB SECTION(1) OF SECTION 188 OF THE COMPANIES ACT 2013
The Board of Directors of the Company had formulated a policy on related partytransactions and materiality of Related Party Transactions on 28th May 2014and subsequently modified it on 8th November 2014 in terms of Clause 49 VIIand VIII of the listing agreement. However with the Listing Agreement being replaced bythe new LODR the policy was further modified to bring in line with the Regulations atthe meeting of the Board held on 7th November 2015. The said policy isdisclosed on the website of the Company www.khil.com and its weblink is http://www.khil.com/hospitality-management/POLICY%20ON%20RELATED%20PARTY%20TRANSACTION%20AND%20MATERIALITY%20OF%20RELATED%20PARTY%20TRANSACTIONS.pdf
During the year under review no Material Related Party Transactions i.e. transactionsexceeding ten percent of the annual consolidated turnover as per the last auditedfinancial statements were entered by your Company. Accordingly the disclosure of RelatedParty Transactions as required under Section 134(3) (h) of the Companies Act 2013 in FormAOC 2 is not applicable.
STATEMENT OF ANNUAL PERFORMANE EVALUATION OF BOARD COMMITTEES AND DIRECTORS
The Board of directors at its meeting held on 6th February 2016 evaluatedits own performance and that of its committees and individual directors.
The Board was evaluated based on factors like quality of discussion transparency andtimeliness of the information adhering to good corporate governance practices etc.
The individuals were evaluated on factors like leadership quality attitudeinitiatives and responsibility undertaken decision making commitment and achievementsduring the financial year.
The Independent Directors at their separate meeting held on 28th May 2016without the attendance of non- independent directors and members of the managementreviewed the performance of non independent directors including Executive Chairman andManaging Director and the Board as a whole. The meeting also 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 its duties.
Your Company has so far bagged ninety three National and International Awards. Most ofthese awards have been won mainly because of the environmental awareness created by theflagship hotel "The Orchid" Mumbai.
The Company has established a Vigil Mechanism for directors and employees to reportgenuine concerns. The vigil mechanism provide for adequate safeguards againstvictimization of person who use Vigil Mechanism and also provide for direct access to theChairman of the Audit Committee in appropriate and exceptional cases.
The detail of Vigil Mechanism is displayed on the website of the Company. www.khil.comand its weblink ishttp://www.khil.com/hospitality-management/WHISTLE%20BLOWER%20POLICY%20-%20VIGIL%20MECHANISM.pdf
COMPOSITION OF AUDIT COMMITTEE
The composition of the Audit Committee as required to be disclosed under Section 177(8)of the Companies Act 2013 is given in Corporate Governance Section (Annexure G) formingpart of the Boards Report. During the year under review there was no instance wherethe Board has not accepted any recommendation of the Audit Committee.
A quarterly review report on compliance with Risk Management policy of the Company isplaced before the Audit Committee of the Company.
During the year under review no risk threatening the existence of the Company wasidentified.
DISCLOSURE OF PECUNIARY RELATIONSHIP
There was no pecuniary relationship or transactions of the non-executive directorsvis--vis the company during the year. Also no payment except sitting fees was made toany of the non-executive directors of the Company. No convertible instruments are held byany of the non-executive directors.
DETAILS OF SHARES ISSUED WITH DIFFERENTIAL VOTING RIGHTS AND SWEAT EQUITIES :
During the year under review the company has not issued any shares with differentialvoting rights and sweat equities.
EMPLOYEE STOCK OPTION SCHEME
During the year under review no option under Employee Stock OptionScheme-2013 was granted or vested to any employee or directors of the Company.
PROVISION OF MONEY BY COMPANY FOR PURCHASE OF ITS OWN SHARES BY EMPLOYEES OR BYTRUSTEES FOR THE BENEFIT OF EMPLOYEES:
There was no deposit accepted by the Company within the meaning of Section 73 of theCompanies Act 2013 and Rules made there under at the beginning of the year. During theyear under review the Company has neither invited nor accepted any deposit under Section73 of the Companies Act 2013 and the rules made there under and no deposit was remainingunpaid or unclaimed as at the end of the year.
SECRETARIAL AUDIT REORT:
In terms of Section 204 (1) of the Companies Act 2013 a Secretarial Audit Reportissued by M/s. V. V.Chakradeo & Co. Practising Company Secretaries is annexed as AnnexureC of the Boards Report.
DETAILS AS PER SECTION 197(12) READ WITH RULE 5 OF COMPANIES (APPOINTMENT ANDREMUNERATION OF MANAGERIAL PERSONNEL) RULES 2014 AND FORMING PART OF THE BOARDSREPORT FOR THE YEAR ENDED 31ST MARCH 2016.
The details are mentioned in Annexure D to this Report.
INFORMATION REQUIRED UNDER RULE 8 (3) OF THE COMPANIES (ACCOUNTS) RULES 2014.
a) Conservation of Energy:
(i) the steps taken or impact on conservation of energy;
(ii) the steps taken by the company for utilising alternate sources of energy;
(iii) the capital investment on energy conservation equipments;
The Company continued energy conservation efforts during the year. It has closelymonitored power consumption and running hours on day to day basis thus resulting inoptimum utilization of energy. The hotels are fitted with energy saving devices toconserve energy in the long run.
b) Technology Absorption:
(i) the efforts made towards technology absorption : The activities of the Company atpresent do not involve technology absorption and research and development.
(ii) the benefits derived like product improvement cost reduction product developmentor import substitution; N.A.
(iii) in case of imported technology (imported during the last three years reckonedfrom the beginning of the financial year)-
(a) the details of technology imported; N.A.
(b) the year of import; N.A.
(c) whether the technology been fully absorbed; N.A.
(d) if not fully absorbed areas where absorption has not taken place and the reasonsthereof; N.A. and
(iv) the expenditure incurred on Research and Development. N.A.
The activities of the Company at present do not involve technology absorption andresearch and development.
c) Foreign exchange earnings and outgo:
Earnings: Rs. 1507.74 Lakhs (Previous Year Rs. 1491.72 Lakhs)
Utilization (including import of capital goods): Rs. 401.61 Lakhs (Previous Year Rs.150.59 Lakhs)
DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS ORTRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANYS OPERATIONS IN FUTURE.
During the period under review no order had been passed by the regulators/ courts ortribunals which have an effect on the going concern status of the company and itsoperations.
DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THEFINANCIAL STATEMENTS.
The Company has adequate internal control systems relating to Purchase Expensecontrols Sales Recording and Audit and Internal Audit. A report on said systems isquarterly placed before the Audit Committee of the Company for its perusal and todetermine its adequacy. Such control systems are adequate and commensurate with the sizeand nature of the business.
DISCLOSURES RELATING TO UNCLAIMED SUSPENSE ACCOUNT AS PER REGULATION 34(2) READ WITHSCHEDULE V(F) OF THE SEBI (LISTING OBLIGATIONS AND DISCLOSURE REQUIREMENTS) REGULATION2015
|Aggregate number of sharehold- ers and the outstanding shares lying in the Unclaimed Suspense Account at the beginning of the year ||Number of shareholders who approached the issuer for trans- fer of shares from the Unclaimed Suspense Account during the year ||Number of shareholders to whom shares were transferred from the Unclaimed Suspense Account during the year ||Aggregate number of sharehold- ers and the outstanding shares lying in the Unclaimed Suspense Account at the end of the year |
|One shareholder having 500 equity shares ||NIL ||NIL ||One shareholder having 500 equity shares |
The voting rights on the shares in unclaimed suspense account shall remain frozen tillthe rightful owner of such shares claims the shares.
CORPORATE SOCIAL RESPONSIBILITY
The provisions of Section 135(1) and 135(5) of the Companies Act 2013 regardingconstitution of Corporate Social Responsibility (CSR)
Committee and spending of at least 2% of average net profit are not applicable to theCompany. The Company has however been actively and constantly undertaking severalinitiatives voluntarily towards its corporate social responsibility in the field ofenvironment.
Disclosures of Corporate Social Responsibility (CSR) activities of the Company is givenin Annexure "E" forming part of this report.
As per Schedule V of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 a separate section on Management
Discussion and Analysis and Corporate Governance Report together with a certificatefrom the Companys Auditors confirming compliance is given in Annexure"F" and "G" forming part of this report.
IMPLEMENTATION OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITION ANDREDRESSAL) ACT 2013.
The Company has constituted Internal Complaints Committee at all the units of theCompany under the Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013. During the year no instance of Sexual Harassment of Women under thesaid Act has been reported in any of the units of the Company.
M/s. J. G. Verma & Co. Chartered Accountants Mumbai retire at the ensuing AnnualGeneral Meeting and being eligible offer themselves for re-appointment. At the 28thAnnual General Meeting held on 12th September 2015 the Company had appointed M/s. J. G.Verma & Co.
Chartered Accountants as StatutoryAuditorsforaperiod officefrom conclusion of28th Annual General Meeting upto end oneyeartohold of 29th Annual General Meeting.
The Audit Committee and the Board of Directors of the Company have recommended to themembers re-appointment of M/s. J. G. Verma & Co. Chartered Accountants as statutoryAuditors to hold office from the conclusion of this Annual General Meeting upto nextAnnual General Meeting. The Company has received a letter from M/s. J. G. Verma & Co.Chartered Accountants confirming that they are eligible for ratification of appointment
EXPLANATION AND COMMENTS BY THE BOARD ON QUALIFICATION / RESERVATION / ADVERSE REMARK /DISCLAIMER MADE IN THE AUDITORS REPORT
The Auditors Report on Standalone and Consolidated Financial Statements forms part ofthe Annual Report and in respect of Emphasis of matter at point no. 1 to 3 of the Auditreport of the Standalone Financial Statements the same are self explanatory and do notcall for further explanation.
The relations of the management with staff and workers remained cordial during theentire year.
The Directors place on record their appreciation for the sincere and whole heartedco-operation extended by all concerned particularly Companys bankers FinancialInstitutions Asset Reconstruction Companies security trustees Stock ExchangesDepartment of Tourism Municipal authorities the Government of Maharashtra the CentralGovernment suppliers clientele and the staff of the Company and look forward to theircontinued support. The Directors also thank the shareholders for continuing their supportand confidence in the Company and its management.
| ||For and on behalf of Board of Directors |
| ||of KAMAT HOTELS (INDIA) LIMITED |
| ||Dr. Vithal V. Kamat |
|Place : Mumbai. ||(DIN 00195341) |
|Date : 6th August 2016 ||Executive Chairman and Managing Director |