Your Directors present the 9th Annual Report of the Board of Directors of your Companyalong with the Balance Sheet Statement of Profit and Loss Account and Cash Flow Statementfor the year ended March 31 2018.
SUMMARY OF FINANCIAL HIGHLIGHTS
The standalone performance of the Company for the financial year ended March 31 2018is summarized below:
(Rs. In Lakhs)
| ||Financial Year ended March 31 2018 ||Financial Year ended March 31 2017* |
|Total Revenue ||23727.91 ||23959.38 |
|Profit/ (Loss) before tax ||(15517.43) ||(15300.35) |
|Tax Expenses || || |
|- Current Tax ||- ||- |
|- Deferred Tax ||- ||3586.78 |
|Profit/ (Loss) after tax ||(15517.43) ||(11713.57) |
*The figures for the previous year has been regrouped/rearranged wherever necessary toconfirm with current periods classification.
For the financial year 2017-18 at standalone level your Company reported a growth of3% in EBITDA vis-a-vis FY 2016-17. EBIDTA increased to ` 6267.45 Lakhs from ` 6084.53Lakhs for the corresponding period. Revenues held ground at ` 23628.77 Lakhs from `23907.65 Lakhs despite a significantly higher indirect tax regime. The revenue and EBITDAnumbers do not include 100 % SGST refund on the ticket sales during the year amounting toapproximately ` 1046.00 Lakhs.
The mechanics of the said refund are being finalized by the State government and itwould fiow into EBITDA as a refund item. Thus EBITDA should improve by as much amount ofapproximately ` 1046.00 Lakhs for FY 2017-18. Considering the GST refund amountthe EBITDA would be higher by approximately 20%.
During the year under review your Company has recorded its highest ever footfallwith 17.22 Lakhs visitors up from the previous year number of 15.44 Lakhs resulting in agrowth of 14%.
During the year under review your Company announced debt reduction plans andaccordingly had presented an overall plan to its lenders. Relevant approvals from lendersare awaited.
The outstanding secured loan as on March 31 2018 aggregate to ` 105514.50Lakhs.
THE STATE OF COMPANY AFFAIRS
Your Company owns & operates an Integrated Entertainment Holiday Destination"IMAGICA" which is built to match global standards and includes a theme park awater park a snow park a hotel and other associated activities such as retail &merchandise food and beverages etc.
Detailed information on the afiairs of the Company has been given as part of ManagementDiscussion and Analysis forming part of this Report.
TRANSFER/ SALE OF BUSINESSES
Your Company is in the process of transferring its hotel business undertakingNovotel Imagica Khopoli with underlying land of 6.1 acres and additionalsurplus land of 8.9 acres together with all specified tangible and intangible assets toBright Star Investments Private Limited for an overall consideration of ` 212.50 Crorepursuant to the approval received from the shareholders by passing a special resolutionthrough postal ballot on December 29 2017.
ISSUE OF SECURITIES AND SHARE CAPITAL
During the year under review Company issued and allotted on preferential basis:
1) 1248684 equity shares of face value of ` 10/- (Rupees Ten Only) per share at apremium of ` 85/- (Rupees Eighty Five Only) per share for an aggregate consideration of `118624980/- (Rupees Eleven Crore Eighty Six Lakhs Twenty Four Thousand Nine Hundred andEighty only) to Bennett Coleman and Company Limited (BCCL) on June 20 2017.
2) 6915629 equity Shares of face value ` 10/- (Rupees Ten only) per equity share at apremium of ` 62.30/- (Rupees Sixty Two and Thirty Paise Only) per equity share for anaggregate consideration equal to ` 499999977/- (Rupees Forty Nine Crore Ninety NineLakhs Ninety Nine Thousand Nine Hundred and Seventy Seven Only) to Shaan Agro and RealtyIndia Private Limited (Formerly Shaan Agro Private Limited) on December 15 2017.
Pursuant to allotment of equity shares the paid up equity share capital of the Companywas increased to ` 880621230/- as at March 31 2018 as compared to ` 798978100/- asat March 31 2017.
During the year under review Company issued and allotted 5 (Five) Convertible Warrantsof ` 23725000/- (Rupees Two Crore Thirty Seven Lakhs Twenty Five Thousand Only) each onpreferential basis to BCCL on June 20 2017 pursuant to receipt of 25% upfront paymentconsideration from BCCL. The convertible warrants are to be converted in to such number ofequity shares with such warrants carrying an option / entitlement to subscribe to equityshares of the face value of ` 10/- (Rupees Ten Only) per share for cash at a pricewhichever is higher of the following aggregating to ` 118625000/- (Rupees Eleven CroreEighty Six Lakhs Twenty Five Thousand Only) on receipt of balance 75% of theconsideration: a) ` 95/- (including premium of ` 85/-) per share; or b) price per shareequal to the average of the weekly high and low of the volume weighted average price ofthe equity share of the Company as quoted on the National Stock Exchange of India Ltd.during the 26 (twenty six) weeks preceding any day of the 17th (seventeenth) month fromthe date of allotment of warrant.
EXTRACT OF ANNUAL RETURN
Extract of annual return is enclosed as Annexure 1.
DIVIDEND & TRANSFER TO RESERVES
In view of the loss for the financial year ended March 31 2018 no amount is proposedto be transferred to the reserves and your Directors have not recommended payment of anydividend for the year under review.
NUMBER OF BOARD MEETINGS
During the financial year ended March 31 2018 the Board of Directors met 8 (eight)times viz. on April 27 2017 May 25 2017 June 20 2017 July 26 2017 August 282017 November 7 2017 December 15 2017 and February 8 2018. The maximum intervalbetween any two meetings did not exceed 120 days.
Details of the meetings of the Board alongwith the attendance of the Directors thereinhave been disclosed as part of the Corporate Governance Report forming part of this AnnualReport.
COMPOSITION OF AUDIT COMMITTEE
The composition of Audit Committee of the Company is as follows: 1. Mr. Steven A.Pinto Chairman; 2. Mr. Ghulam Mohammed; 3. Mr. Kapil Bagla; and 4. Ms. Anjali Seth.
DECLARATION OF INDEPENDENCE BY DIRECTOR
Pursuant to the provisions under Section 134(3)(d) of the Companies Act 2013 (the"Act") with respect to statement on declaration given by Independent Directorsunder Section 149(6) of the Act the Board hereby confirms that all the IndependentDirectors of the Company have given a declaration and have confirmed that they meet thecriteria of independence as provided in the said Section 149(6) and relevant Regulation ofSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.
Pursuant to Section 152 of the Act Ms. Pooja Deora Director of the Company retiresby rotation and being eligible ofiers herself for re-appointment at the ensuing AnnualGeneral Meeting.
Pursuant to the recommendation of Nomination and Remuneration Committee the Board inits meeting held on May 17 2018 re-appointed Mr. Manmohan Shetty as Chairman of theCompany subject to the approval of Members at the ensuing Annual General Meeting for aperiod of 5 (five) years commencing from September 2 2018 to September 1 2023.
Re-appointment of Mr. Kapil Bagla as Whole-time Director of the Company was approved bythe Members at the Annual General Meeting held on July 26 2017 for a period of 3 (three)years commencing from July 6 2017 to July 5 2020.
Further Mr. Kapil Baglas designation was changed from Whole-time Director to NonExecutive Director w.e.f. September 1 2017.
KEY MANAGERIAL PERSONNEL
The Key Managerial Personnel (KMP) in the Company as per Section 2(51) and 203 of theAct are as follows:
|Mr. Ashutosh Kale ||: Executive Director and Joint Chief Executive Oficer |
|Mr. Dhimant Bakshi ||: Joint Chief Executive Oficer |
|Mr. Mayuresh Kore ||: Chief Financial Oficer |
|Ms. Madhulika Rawat ||: Company Secretary |
During the year under review Mr. Kapil Bagla resigned as Chief Executive Oficer ofthe Company with efiect from September 1 2017 and Mr. Ashutosh Kale and Mr. DhimantBakshi were designated as Joint Chief Executive Oficers and KMPs of the Company withefiect from September 1 2017.
During the year under review Blue Haven Entertainment Private Limited became a whollyowned subsidiary of your Company w.e.f. November 16 2017.
Your Company had taken an approval from shareholders by passing special resolutionsthrough postal ballot on December 29 2017: a) for sale or transfer or otherwise disposeof its 100% investments/ shareholding in Walkwater Properties Private Limited("WPPL") which is a wholly owned subsidiary company and Surplus Land of 67acres of the Company to another wholly owned subsidiary company of the Company Blue HavenEntertainment Private Limited ("BHEPL") for a consideration by way of take-overof the debt of the Company aggregating to `150 Crore (Rupees One Hundred and Fifty CroreOnly) and on such terms and conditions as may be agreed between the Board and BHEPL.
However as the lenders to the Company have not shown willingness for transfer of debtfrom the Company to BHEPL the Board in its meeting held on May 17 2018 approved to sell100% investments / shareholding of the Company in WPPL and surplus land of approximately65 acres to Shaan Agro and Realty Private Limited at a total consideration of `150 Crorein cash subject to approvals consents permissions and/or sanctions from appropriateauthorities and approval of Members at the ensuing Annual General Meeting.
b) to sell or transfer or otherwise dispose of its 100% investments and/or shareholdingin BHEPL a wholly owned subsidiary company of the Company to Shaan Agro and Realty IndiaPrivate Limited for a minimum consideration of ` 100000/- (Rupees One Lakh) or suchhigher value to be determined by an independent valuer/chartered accountant to bedischarged in the form of cash.
The abovementioned sale or transfer of investments is yet to be concluded.
A separate statement in terms of Section 129(3) of the Act containing salient featuresof the financial statements of the subsidiary companies of your Company in Form AOC 1forms part of this Annual Report. Pursuant to the Section 136 of the Act companies areexempted from attaching the Annual Reports and other particulars of its subsidiarycompanies along with Annual Report of the Company. Therefore the Annual Report of thesubsidiary companies are not attached with this Annual Report.
The financial statements of the subsidiary companies and related information shall beuploaded on the website of your Company which can be accessed using the linkwww.adlabsimagica.com/investorfi docs/ Annual%20 Accounts%202017-18.pdf and the same isalso available for inspection by the Members at the registered ofice of your Companyduring business hours on all working days up to the date of the Annual General Meeting asrequired under Section 136 of the Act. Any Member desirous of obtaining a copy of the saidfinancial statements may write to the Company Secretary at the registered ofice address ofyour Company.
Your Company has approved a policy for determining material subsidiaries and the sameis uploaded on the Companys website which can be accessed using the linkhttps://www.adlabsimagica. com/investorfidocs/Material%20Subsidiary%20Policy.pdf.
During the year under review your Company has not accepted any fixed deposits from thepublic falling under Section 73 of the Act read with the Companies (Acceptance ofDeposits) Rules 2014. Therefore as on March 31 2018 there were no deposits which wereunpaid or unclaimed and due for repayment.
M/s. A. T. Jain & Co. Chartered Accountants were appointed as Statutory Auditorsof your Company at the 8th Annual General Meeting of the Company to hold ofice for aperiod of 2 (two) consecutive years i.e. from the conclusion of the 8th Annual GeneralMeeting until the conclusion of the 10th Annual General Meeting of the Company. As per theprovisions of Section 139 of the Companies Act 2013 the appointment of Auditors wasrequired to be ratified by Members at every Annual General Meeting.
As per the Companies (Amendment) Act 2017 enforced on May 7 2018 by the Ministry ofCorporate Afiairs the appointment of Statutory Auditors is not required to be ratified bythe Members at every Annual General Meeting.
The observations and comments given by Auditors in their report read together withnotes to Accounts are self explanatory and hence do not call for any further commentsunder Section 134 of the Act. The Auditors Report does not contain anyqualification reservation or adverse remark.
Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 the Company had appointed M/s. Aabid& Co. Company Secretaries to undertake the Secretarial Audit of the Company for thefinancial year 2017-18. The Report of the Secretarial Audit in Form MR 3 for the financialyear 2017-18 is annexed as Annexure 2 to the Report. There are no qualificationsreservations or adverse remarks made by Secretarial Auditor in his report.
The Board has appointed M/s. Aabid & Co. Company Secretaries as SecretarialAuditors for the financial year 2018-19.
TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND
The provisions of Section 125(2) of the Act do not apply as there was no dividenddeclared and paid by the Company.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALSIMPACTING THE GOING CONCERN STATUS AND COMPANYS OPERATIONS IN FUTURE
During the year under review there were no such orders passed by the regulators orcourts or tribunals impacting the going concern status and Companys operations infuture.
ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS
The Company has adequate internal control procedures commensurate with its size andnature of business. The business control procedures ensure eficient use and protection ofCompanys resources and compliance with policies procedures and statutoryrequirements. Further internal auditors are appointed to carry audit assignments and toperiodically review the transactions across the divisions and evaluate efiectiveness ofinternal control systems.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF THE ACT
During the year under review there were no guarantees given under Section 186 of theAct. Particulars of loans and investments have been disclosed as part of the financialstatements of your Company for the year under review in Note 5 and Note 12 respectively.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES REFERRED TO INSUB-SECTION (1) OF SECTION 188 OF THE ACT IN THE PRESCRIBED FORM
All contract(s) / arrangement(s) / transaction(s) entered into by your Company with itsrelated parties during the year under review were:
in "ordinary course of business" of the Company;
on "an arms length basis"; and
not "material" as per the provisions of Section 188(1) of the Actread with Companies (Meetings of Board and its Powers) Rules 2014. Accordingly FormAOC-2 prescribed under the provisions of Section 134(3)(h) of the Act and Rule 8 of theCompanies (Accounts) Rules 2014 for disclosure of details of related party transactionswhich are "not at arms length basis" and also which are "material& at arms length basis" is not provided as an annexure of theDirectors Report.
However details of the related party transactions entered into during the year underreview and as on March 31 2018 are disclosed as part of the financial statements of yourCompany for the year under review as Note 37. Further pursuant to the provisions of theAct and the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015Board has approved and adopted a Policy on related party transactions. The said policy isavailable on your Companys website viz. www.adlabsimagica.com.
MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY
There have been no material changes and commitments afiecting the financial positionof the Company which occurred between the end of the financial year to which the financialstatements relate and the date of this report.
Board has constituted a Risk Management Committee of the Board to assist the Boardwith regard to the identification evaluation and mitigation of operational strategic andexternal risks. Risk Management Committee works towards identifying internal and externalrisks and implementing risk mitigation steps. On quarterly basis status updates areprovided to the Board of Directors of the Company. More details on risks and threats havebeen disclosed in the section "Management Discussion and Analysis".
CORPORATE SOCIAL RESPONSIBILITY (CSR)
CSR is a Companys sense of responsibility towards the community and environmentin which it operates. It is the continuing commitment by business to behave ethically andcontribute to economic development of the society at large and building capacity forsustainable livelihoods. The Company believes in conducting its business responsiblyfairly and in a most transparent manner. It continually seeks ways to bring about anoverall positive impact on the society and environment where it operates and as a part ofits social objectives.
CSR policy has been formally formulated and adopted in terms of Section 135 of the Actand Rules framed thereunder to undertake CSR activities. The Company has always madeconsistent efiorts to maintain an active corporate social responsibility portfolio.
The Company has duly constituted CSR Committee comprising of Mr. Steven A. Pinto Mr.Ashutosh Kale and Mr. Manmohan Shetty. The responsibilities of the CSR Committee include:
1. Formulating and recommending to the Board of Directors the CSR Policy and indicatingactivities to be undertaken.
2. Recommending the amount of expenditure for the CSR activities.
3. Monitoring CSR activities from time to time.
In view of the losses for the year under review your Company was not required to spendany amount towards the CSR activities as per the applicable provisions of Section 135 ofthe Act. Accordingly the details of the CSR activities during the year under review arenot provided in this Report.
NOMINATION AND REMUNERATION POLICY
The Company follows a policy on nomination and remuneration of Directors and SeniorManagement Employees. The Policy is approved by the Nomination and Remuneration Committee.The policy on the above is attached as Annexure 3.
FORMAL ANNUAL EVALUATION
The Company has devised a policy for performance evaluation of its individualdirectors the Board and the Committees constituted by it which includes criteria forperformance evaluation.
In line with the requirements of the Companies Act 2013 and SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015 the Board has carried out an annualevaluation of its own performance working of the Committees and the Directorsindividually.
The Board performance was evaluated based on inputs received from all the Directorsafter considering criteria such as Boards efiectiveness in decision making inproviding necessary advice and suggestions to the Companys management etc.
A separate meeting of the Independent Directors was also held during the year forevaluation of the performance of the Non Independent Directors the Board as a whole andthat of the Chairman.
The Nomination and Remuneration Committee has also reviewed the performance of theindividual directors based on their knowledge level of preparation and efiectiveparticipation in meetings contribution towards positive growth of the Company etc.
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to the requirement under Section 134 (5) of the Act with respect to theDirectors Responsibility Statement it is hereby confirmed that:
a) in the preparation of the annual accounts the applicable accounting standards havebeen followed along with proper explanation relating to material 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 afiairs of the Company at the end of the financial year and ofthe profit and loss of the Company for that period;
c) the directors have taken proper and suficient 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 were operatingefiectively; and
f) the directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating efiectively.
CONSOLIDATED FINANCIAL STATEMENTS
The Consolidated Financial Statements of the Company are prepared in accordance withrelevant Indian Accounting Standards issued by the Institute of Chartered Accountants ofIndia and forms an integral part of this Report.
Pursuant to Section 129(3) of the Companies Act 2013 read with Rule 5 of the Companies(Accounts) Rules 2014 a statement containing salient features of the financialstatements of subsidiary company is given in Form AOC-1 and forms an integral part of thisReport.
The Company has established a Vigil Mechanism that enables the Directors and Employeesto report genuine concerns. The Vigil Mechanism provides for (a) adequate safeguardsagainst victimization of persons who use the Vigil Mechanism; and (b) direct access to theChairperson of the Audit Committee of the Board of Directors of the Company in appropriateor exceptional cases.
Details of the Vigil Mechanism policy are made available on the Companys websitewww.adlabsimagica.com.
PARTICULARS OF EMPLOYEES
Disclosures with respect to the remuneration of Directors and employees as requiredunder Section 197 (12) of the Act and Rule 5(1) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 are provided separately as Annexure 4to this Report.
Details of employee remuneration as required under provisions of Section 197(12) of theAct and Rule 5(2) & 5(3) of Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 will be made available at the registered ofice of the Companyduring working hours pursuant to the provisions of the first proviso to Section 136(1) ofthe Act and any Member interested in obtaining such information may write to the CompanySecretary and the same will be made available to any such Member on request.
FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTORS
All new Independent Directors (IDs) inducted into the Board are given an orientation.Presentations are made by Executive Directors (EDs) and Senior Management giving anoverview of the Companys operations to familiarize the new IDs with theCompanys business operations. The new IDs are given an orientation on our productsgroup structure and subsidiary company Board constitution and procedures mattersreserved for the Board and the Companys major risks and risk management strategy.The Policy on the Companys Familiarisation Programme for IDs can be accessed athttps://www.adlabsimagica. com/investorfidocs/Familiarisation%20programme%20for%20Independent%20Directors.pdf.
The Company regards human resources as a valuable asset. The Company encourages aperformance driven culture and enables the employees with focused training at regularintervals. Further the training needs at all divisions are periodically assessed andtraining programmes are conducted using internal resources and/or engaging externalfacilitators and trainers. The total number of permanent employees on the rolls of theCompany as on the year end were 733.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The particulars relating to conservation of energy technology absorption foreignexchange earnings and outgo as required to be disclosed under the Act are provided in Annexure5 to this Report.
CORPORATE GOVERNANCE AND COMPLIANCE OF SECRETARIAL STANDARDS
The Company has complied with the corporate governance requirements under the CompaniesAct 2013 and as stipulated under the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015. A separate section on corporate governance under the SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 along with thecertificate from the Practicing Company Secretary confirming the compliance is annexedand forms part of this Annual Report.
The Company has complied with the Secretarial Standards issued by Institute of CompanySecretaries of India on Meeting of Board of Directors and General Meetings.
MANAGEMENT DISCUSSION & ANALYSIS
Management Discussion and Analysis is annexed as Annexure 6.
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013
The Company has always believed in providing a safe and harassment free workplace forevery individual working in the Companys premises through various interventions andpractices. The Company always endeavours to create and provide an environment that is freefrom discrimination and harassment including sexual harassment.
The Policy on Prevention of Sexual Harassment at Workplace has been formulated by theCompany. The policy aims to develop a harmonious and productive working environment freefrom sexual harassment. The Company also ensures all allegations of sexual harassment areinvestigated and dealt with efiectively and appropriately.
During the year under review the Company received NIL complaints pertaining to sexualharassment.
Your Directors would like to express their sincere appreciation for the co-operationand assistance received from shareholders bankers financial institutions regulatorybodies and other business constituents during the year under review. Your Directors alsowish to place on record their deep sense of appreciation for the commitment displayed byall executives oficers and stafi of the Company during the financial year.
| ||For and on behalf of the Board of Directors |
| ||Manmohan Shetty |
|Place: Mumbai ||Chairman |
|Date: May 17 2018 ||(DIN: 00013961) |