To the Members
Your Directors are pleased to submit their Fortieth (40th) Report togetherwith the Audited Financial Statements for the financial year ended 31st March2021.
FINANCIAL RESULTS & THE STATE OF COMPANY'S AFFAIRS
(on a standalone basis)
(Rupees in Crore)
|Particulars ||FY 2020-21 ||FY 2019-20 |
|Revenue from Operations (Net) ||72.58 ||252.39 |
|Other Income ||1.87 ||14.56 |
|Total Income ||74.45 ||266.95 |
|Profit/(Loss) before exceptional items and tax ||(125.98) ||(73.95) |
|Exceptional Items ||569.15 ||0 |
|Profit/(Loss) before Tax ||(695.12) ||(73.95) |
|Provision for Tax (net of write backs) including Deferred Tax Assets (Net) ||(0.77) ||10.82 |
|Net Profit/(Loss) ||(695.14) ||(63.13) |
|Earning per share - Basic & Diluted (Rs.) ||(357.34) ||(32.45) |
Total revenue from operations for the financial year 2020-21 was lower at Rs. 72.58crore as compared to Rs. 252.39 crore in the prior financial year showing a decrease of71.24 % over the prior financial year.
Combined revenue from Food & Beverage including Wines & Liquor registered asignificant decrease of 70.73% and the room revenue declined by 73.42 % during the yearunder review as compared to the prior financial year.
On a standalone basis the Total Income for this year was Rs. 74.45 crore which waslower by 72.11% than the previous year's Total Income of Rs. 266.95 crore. The decline inTotal Income is caused primarily due to COVID-19 outbreak. In FY 2020-21 the pandemiclanded a severe blow to the hospitality industry and AHNL is no exception. Consequentlythe Company reported a Net Loss of Rs.695.14 crore in this year in comparison to the NetLoss of Rs. 63.13 crore for prior financial year.
The lockdown by the Government to curb the spread of COVID-19 gave plenty of time tothe authorities to plan accordingly. However the pandemic has severely affected thebusiness of the hospitality sector. With social distancing quarantine measures travelbans etc. it is expected that the hospitality sector will take a longer time to revive.This sudden decline in revenues has had an immediate effect on the Company's financials.Even though the Company's revenue has taken a hit due to COVID-19 widespread andsubsequent lockdown the Company has shown revival signs post lifting of lockdown andtravel restrictions as demand for staycations and domestic travels increases.
Transfer to Reserves/Dividend
In view of the loss suffered by the Company your Directors are constrained not torecommend any dividend during/for the year under review.
Further no amount was transferred to the General Reserve for the year under review.
Material changes and commitments if any affecting the financial position of theCompany during the year under review and between the end of the financial year underreview to which the financial statements relate and the date of this Report.
During the major part of the year the business of the Company was significantlyimpacted due to COVID-19. Hotel was not operating for the first six months on account ofrestrictions imposed due to lockdowns; with lifting of lockdown restrictions hotel startedfrom second half of the year.
The Company has assessed the impact of COVID-19 on the future cash flow projections.The Company has also prepared a range of scenarios to estimate financing requirements. TheCompany has also assessed the potential impact of COVID-19 on the carrying value ofproperty plant & equipment investments trade receivables inventories and othercurrent assets appearing in the financial statements of the Company. Based on the currentindicators of future economic conditions the Company expects to recover the carryingvalue of these assets. The impact assessment of COVID-19 is a continuous process given theuncertainties associated with its nature and duration and actual results may differmaterially from these estimates.
The Covid-19 outbreak and subsequent nationwide lockdown have adversely impacted thebusiness operations of financial year ended March 31 2021 (and continuing) in terms ofroom occupancy as well as food beverages and other income of Hotel "Hyatt RegencyDelhi" owned by the Company. Further Commercial Real Estate Sales ("CRE")activity of the company has also come to halt during this period.
The major reasons for stress due to outbreak of Covid -19 are:
1. Travel Restriction announced on domestic as well as international travel throughoutthe globe.
2 Substantial decline in room occupancy level
3. Substantial decline in F & B and other support services income
4. Decline in income of restaurants
5. Increase in level of Debt due to regular interest application as fixed expenses
6. CRE activity of company also came to halt during pandemic period due to generaleconomic slowdown in the country
As a result of abovementioned reasons there were severe cash flows mismatch which hasimpacted the financial performance and liquidity position of the Company. Due to creationof Provision of Diminution in the Value of Investment in the subsidiary the net worth ofthe Company has taken a hit. However the Management has drawn plans for revival and forimproving the profitability and cash flows of the Company. Further majority lenders haveinvoked the One Time Restructuring (OTR) wherein the Company will get extra leverage forrepayment of its existing and future principal and interest obligations. These factors andexpected future improvement in business operations will be critical for the Company tocontinue as a Going Concern.
In respect of Ultimate Subsidiary Company i.e. Leading Hotels Limited an Order undersection 7 of Insolvency & Bankruptcy Code 2016 read with rule 4 of the Insolvency& Bankruptcy (Application to Adjudicating Authority) Rules 2016 has been passed onJune 25 2021 for initiating Corporate Insolvency Resolution Process (CIRP). Due to theuncertainty related to realization of amount from the Insolvency process the value ofinvestment is fully impaired during the year by creation of provision for diminution inthe value of the investment.
The Company will continue to monitor the material changes in future economic conditionsand would recognize any significant impact of these changes affecting the Company in thefinancial statements as and when these conditions arise.
Save as otherwise stated above with regard to the adverse impact caused by the COVID-19pandemic your Directors would like to inform that no other material changes andcommitments have occurred between the end of the financial year under review and the dateof this report that may adversely affect the financial position of the Company.
In a significant decision your Directors in their meeting held on 23rd May2020 decided to revoke all existing license agreements in respect of the shops in HotelHyatt Regency's shopping arcade. It was felt for a long time that the shopping arcade wasoperating in a very precarious condition as the licensees had added lots of electric wireswhich had become a major fire risk endangering the lives of people and loss of property.Your Directors took this decision also to ensure better commercial utilization andoperational efficiency and safety of the area forming the shopping arcade within thepremises of Hotel Hyatt Regency Delhi.
In pursuance of the aforesaid decision revocation notices were issued to all thelicensees and as expected the licensees moved to the Delhi High Court. The status quocontinues as the matter is still pending for adjudication before Honorable Delhi HighCourt.
As mentioned above in the wake of the prevailing Covid-19 situation performance ofthe Company has been impacted substantially which has resulted in cash flow constraints.
Based on the recommendation of the Audit committee the Board of Directors of theCompany in its meeting held on 12th November 2020 considered and approved thesubmission of draft restructuring plan to its bankers.
The company filed application regarding OTR of its credit facilities with all thelenders subsequently invocation of OTR was done on 9th December 2020 and InterCreditor Agreement was signed on 23rd December 2020 by all the lenders.
Bank of Maharashtra being the Lead Bank has completed requisite formalities andcirculated to all the lenders through e-mails respective lenders had approached theirsanctioning authority and given the decisions which are summarised as below.
|S. No. Name of Bank ||Sanctioned Amount ||Outstanding Amount on 01.03.2020 ||%of shares in total O/S loan ||Status of decision ||Majority by value ||% |
|1 Punjab National Bank ||146.2 ||140.04 ||21% ||Sanctioned ||140.04 ||21% |
|2 Yes Bank-I ||55 ||43.94 ||27% ||Sanctioned ||181.55 ||27% |
|Yes Bank-II ||125 ||104.61 || || || || |
|Yes Bank-OD Limit ||33 ||33 || || || || |
|3 IndusInd Bank ||100 ||95.71 ||15% ||Sanction not received || || |
|4 Bank of Maharashtra-I ||197.75 ||192.8 ||35% ||Sanctioned ||235.34 ||35% |
|Bank of Maharashtra-II ||43.66 ||42.54 || || || || |
|5 Axis Bank OD limit ||13 ||13 ||2% ||Sanctioned || ||2% |
|Grand Total ||717.61 ||669.64 ||100% || || || |
|Calculation of Majority Decision of all lenders who has signed ICA || || || || || || |
|3 60% In Number ||75% in value ||502.23 || || ||556.93 ||85% |
Lead Banker "Bank of Maharashtra" had issued the letter ref no ATI4/AHNL/2021-22/433 dated 7th June 2021 by which they have intimated the Companyand other lenders of consortium regarding the approval of one time restructuring of creditfacilities availed by the Company.
With reference to the above your Directors are pleased to announce that Our One-timerestructuring plan have been approved and implemented by the consortium of Bankers andthe same has been updated by the Company in its Board meeting held on 5th July2021.
In addition to the above the Company had also filed for the extension inSCOD/restructuring for its subsidiary Leading Hotels Ltd to Yes Bank where the bank hasdeclined the extension to Leading Hotels Limited.
Significant and Material Orders passed by the Regulators or Courts or Tribunals
During the year under review or between the end of that financial year and the date ofthis report no significant or material orders were passed by the Regulators or Courts orTribunals which may impact the going concern status and future operations of the Company.
Consolidated Financial Statements and Auditors' Report thereon
In accordance with the provisions of Section 129 of the Companies Act 2013 ("theAct") read with rules thereunder and SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 ("the Listing Regulations") your Directors havepresented the stand-alone financial statements of the Company and consolidated financialstatements comprising financials of the Company and its subsidiaries for the financialyear 2020-21 as part of this Annual Report.
In accordance with the provisions of Section 136 of the Act individual balance sheetstatement of profit & loss cash flow statement statement of changes in equity andnotes to accounts together with the report of Board of Directors and report of Auditors ofeach of the subsidiaries are open for inspection by the Members at the registered officeof the Company copies of which may be furnished if desired by any Member. Further thesedocuments are also uploaded on the website of the Company.
Auditors' Report on the Consolidated Financial Statements for the year under review iswith modified opinion.
The Statutory Auditors M/s. V V Kale & Co in their report dated 5thJuly 2021 on the Consolidated Financial Statements had expressed modified opinion on thesaid financial statements stating that with respect to a subsidiary namely Leading HotelsLimited:
i) The Company has not provided provision of interest liability amounting to Rs. 1518Lakhs for FY 2020-21 and Rs. 3284.60 Lakhs in aggregate till 31.03.2021 relating to InterCorporate Deposits and other financial commitments. The non-provisioning of interest hasresulted in understatement of CWIP to the extent of Rs. 3284.60 Lakhs as at March 312021.
In response to the above qualification your Directors clarify that in view of thecurrent financial crunch being faced by the Subsidiary provisions for interest liabilityamounting to Rs. 3284.60 Lakhs was not provided. This has however no impact on thecurrent profit/ (loss) of the Subsidiary as well as on the consolidated financialstatements of the Company since this would have been otherwise formed part of the capitalwork in progress in respective financial statements.
ii) The Company has defaulted in making principal and interest payments to its Bankers. Due to the ongoing litigation on tenancy related and other issues and consequent courtorders there is a substantial delay in development of villa hotel complex and a 18 hole72 par championship golf course in its subsidiary "Leading Hotels Limited". Thishas resulted in shortage of funds in the subsidiary whereby the Company has defaulted ininterest repayment obligations amounting to Rs. 842.72 Lakhs for the period September 2020to February 2021 and principle amounting to Rs. 280 Lakhs and has not made provision forinterest payable on ICD lenders aggregating to Rs. 3284.60 Lakhs (which includes interestpayable for the previous year of Rs. 1767.04 Lakhs). The financial statements indicate netcurrent liabilities of this Subsidiary at Rs. 15213.62 Lakhs as on March 312021. Furtheron June 25 2021 an Order under section 7 of Insolvency & Bankruptcy Code 2016 readwith rule 4 of the Insolvency & Bankruptcy (Application to Adjudicating Authority)Rules 2016 has been passed for initiating Corporate Insolvency Resolution Process (CIRP).These factors cast a doubt of the ability of the subsidiary to continue as a GoingConcern. Since the outcome of the recently commenced insolvency process cannot beestimated as of now the financial statements are drawn on a reasonable basis whichmaintains the status-quo of the operations as it is. These events put together indicate amaterial uncertainty regarding going concern of the said subsidiary Leading HotelsLimited.
In response to the above qualification your Directors take this opportunity to informthat Insolvency Proceedings have been initiated for the Subsidiary Company i.e. LeadingHotels Limited vide order dated 25th June 2021 issued under Section 7 of theInsolvency & Bankruptcy Code 2016 read with rule 4 of the Insolvency & Bankruptcy( Application to Adjudicating Authority) Rules 2016.
Since the outcome of the recently commenced Insolvency Process cannot be estimated asof now the financial statements are drawn on a reasonable basis which maintains thestatus - quo of the operations as it is.
No frauds have been reported under Section 143(12) of the Act by the Auditors of theCompany.
Foreign Exchange Receipts
The Company's earnings in foreign exchange for the year under review amounted to Rs.10.32 crore as compared to Rs. 90.30 crore during the prior financial year.
The Authorised Share Capital of the Company is Rs. 700000000 (Rupees Seventy CroresOnly) divided into 40000000 equity shares of Rs. 10 each and 30000000 preferenceshares of Rs. 10 each. The Issued/ Subscribed and Paid up share capital of the Company ason 31 st March 2021 was Rs. 194532290 divided into 19453229 equity shares of Rs.10 each.
There is no change in the Company's capital structure since the last report.
During the year under review the Company has neither issued equity shares withdifferential rights as to dividend voting or otherwise nor has it issued shares to itsemployees under any scheme (including sweat equity shares). The Company does not have anyoutstanding warrants/depository receipts/other convertible securities as on 31stMarch 2021 or the date of this report.
The shares are actively traded on BSE and NSE and have not been suspended from trading.
In terms of Para F of Schedule V to the Listing Regulations the details of Un-claimedShares are as under:
|Particulars ||No. of folios wherein shares are marked as un-claimed ||No. of shares marked as un-claimed |
|Status of un-claimed shares at the beginning of the year i.e. 1st April 2020 ||1 ||1400 |
|Add: No. of claims received during the year ||0 ||0 |
|Less: Number of shares in respect of which dividend entitlements remained unclaimed for seven consecutive years and transferred from the Unclaimed Suspense Account to the IEPF ||1 ||1400 |
|Balance un-claimed shares as at 31.03.2021 ||0 ||0 |
During the year under review 17742 equity shares held by 218 beneficialowners/shareholders of the Company in respect of which dividend for the relevantfinancial year ended 31st March 2013 remained unpaid/unclaimed consecutively for aperiod of seven years up-to 30th October 2020 were transferred to IEPFAuthority in accordance with Section 124(6) of the Act read with the Investor Educationand Protection Fund (Accounting Audit Transfer and Refund) Rules 2016 as amended orre-stated from time to time.
Further the unpaid/unclaimed dividend for the financial year 2013-14 also becameliable to be transferred to the IEPF Authority on 31st October 2021 and theCompany is in the process of transferring the same to IEPF Authority. Accordingly basedon the unpaid/ unclaimed dividend for the year ended 31st March 2014 whichremained unpaid/unclaimed consecutively for a period of seven years up to 31stOctober 2021 the Company has also ascertained that 21435 shares are unclaimed andtherefore are liable to be transferred to the IEPF Authority on or before 30thNovember 2021.
The Company is controlled by the Jatia Group comprising inter-alia Mr. Shiv KumarJatia Mr. Amritesh Jatia and in turn the companies controlled by them namely FinelineHoldings Ltd. Mauritius Yans Enterprises (H.K.) Ltd. Mauritius and Asian Holdings Pvt.Ltd. Such persons directly or indirectly own and control various operating companies ofthe Jatia Group viz. Asian Hotels (North) Limited and Leading Hotels Limited. All the saidconstituents singularly and collectively including the operating companies comprise theJatia Group. Some of the said constituents exercise control over the Company as directorsand/or shareholders.
During the year under review changes occurred in shareholding of the promoters andpromoter group due to invocation of pledge of shares. Consequently shareholding of thepromoters and promoter group came down to 57.98% of the total paid-up capital as on 31stMarch 2021.
Presently the promoters and promoter group stake stands at 57.91% of the total paid-upcapital.
Your Company holds 100% equity as well as preference capital in Fineline Hospitalityand Consultancy Pte. Ltd. Mauritius (FHCPL). FHCPL holds 80% equity stake in Lexon HotelVentures Ltd. Mauritius (Lexon) and Lexon in turn holds 99.76% equity stake in LeadingHotels Limited (Leading) an Indian subsidiary.
Thus FHCPL has 79.81% economic interest in Leading.
Based on the financial statements for the year ended 31st March 2021 ofthe above named subsidiaries and the consolidated financial statements of the Company forthe year ended as on that date each one of FHCPL Lexon and Leading are materialsubsidiaries of the Company.
Further your Directors take this opportunity to inform you that Insolvency Proceedingshave been initiated on the Subsidiary Company
i.e. Leading Hotels Limited vide order dated 25th June 2021 issued underSection 7 of the Insolvency & Bankruptcy Code 2016 read with rule 4 of the Insolvency& Bankruptcy (Application to Adjudicating Authority) Rules 2016.
During the year under review no company became a subsidiary or joint venture orassociate of the Company. Similarly no company ceased to be a subsidiary or joint ventureor associate during the year under review.
Performance and financial position of the subsidiaries
For performance and financial position of individual subsidiaries the members mayrefer to the Statement containing salient features of the financial statements ofCompany's subsidiaries in Form AOC-1 pursuant to Section 129(3) of the Act read with Rule5 of the Companies (Accounts) Rules 2015 annexed to the financial statements.
STATUTORY AUDITORS & THEIR REPORT ON STAND-ALONE FINANCIAL STATEMENTS
M/s. V.V. Kale & Company Chartered Accountants (Firm Registration Number:000897N) were appointed as the statutory auditors of the Company in the 39thAnnual General Meeting to hold office from the conclusion of that meeting till theconclusion of the 44th Annual General Meeting of the Company.
M/s. V.V. Kale & Company Chartered Accountants have conveyed eligibility for theircontinued appointment to act as Statutory Auditors of the Company for the financial year2021 -22.
Statutory Auditors' Report on the Stand-alone Financial Statements for the year underreview is with un-modified opinion.
No frauds have been reported under Section 143(12) of the Act by the Auditors of theCompany.
Internal Financial Controls over Financial Reporting
The Company has in all material respects an adequate internal financial controlssystem over financial reporting and such internal financial controls over financialreporting were operating effectively as at 31st March 2021 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls over Financial Reporting issued by the Institute of CharteredAccountants of India.
In the opinion of the Statutory Auditors of the Company as expressed by them in theirreport the Company has adequate internal financial control systems over financialreporting and such internal financial controls over financial reporting were operatingeffectively as at 31st March 2021.
During the year under review M/s. S. S. Kothari Mehta & Co. Chartered Accountants(FRN: 000756N) New Delhi the internal auditors of the Company conducted periodic auditsof the Company. The Audit Committee reviews the detailed Internal Audit reports submittedby the Internal Auditors and takes note of the actions taken on the observations of andrecommendations made by them.
Your Directors are confident that there are adequate internal control systems andprocedures which are being followed and complied with.
The Company has re-appointed M/s. S. S. Kothari Mehta & Co. Chartered Accountants(FRN: 000756N) as Internal Auditors for the financial year 2021-22.
No frauds have been reported under Section 143(12) of the Act by the Auditors of theCompany.
SECRETARIAL AUDITORS & THEIR REPORT
M/s. Chandrasekaran Associates Company Secretaries the Secretarial Auditors of theCompany have submitted their report for the financial year ended 31st March2021 which is annexed as Annexure A' and forms part of this Report.
Secretarial Auditors' Report for the year under review is with modified opinion.
The Secretarial Auditors in their report dated 7th August 2021 hadexpressed modified opinion in respect of the following points:
1. Pursuant to Regulation 24(1) of the Listing Regulations as the Company has notappointed any one of its Independent Directors in each of its overseas materialsubsidiaries i.e. FHCPL and Lexon on their respective Board.
Pursuant to the above opinion your Directors in their meeting held on 19thFebruary 2021 appointed Ms. Preeti Gandhi Independent Non-Executive Director on therespective Board of the abovenamed subsidiaries.
2. The Audited financial results for the year ended March 312020 were due to besubmitted to the stock exchanges on 31.07.2020. The Board has approved the Auditedfinancial results on 12.08.2020 and submitted thereafter. The Company has received showcause notice from both the Stock Exchanges i.e. National Stock Exchange of India Ltd. andBSE Ltd. imposing penalty of Rs. 59000/- each for the late submission of the said AuditedFinancial Results for the year ended 31st March 2020.
Pursuant to the above opinion your Director in their meeting held on 13thSeptember 2020 informed that the Company has paid the fine as levied by both the StockExchanges and that they were conscious of the fact that Annual audited financial resultsare required to be submitted to the Stock Exchanges within 60 days from the financial yearend i.e 31st May every year and due to CoVID-19 pandemic SEBI had extendedthe time period for submitting the audited financial results for the year ended 31stMarch 2020 up to 31st July 2020. However the Company could not finalize the saidfinancial results within the stipulated time due to disruption of work caused by theprolonged lock-down enforced to contain the prevailing global pandemic CoVID-19. Evenafter the lock-down was relaxed restriction on movement and non availability of publictransportation severely impacted the attendance. Moreover due to the similar reasons theAuditors' offices were also sparsely operational for a long time due to which audit wasalso delayed. Consequently the Board of Directors of the Company could approve theaudited financial results for the year ended 31st March 2020 on 12thAugust 2020. Your Directors emphasize that this instance of non-compliance is an oddoccurrence under difficult circumstances beyond the control of the Company and that theCompany being a law-abiding corporate citizen would ensure that no such instance occurs inthe future.
3. The Statutory Auditors of Leading Hotels Limited material subsidiary of the Companyhas resigned w.e.f. February 08 2021. As per the SEBI Circular dated October 18 2019the Audit Committee must take note of the resignation and views of the Audit Committeemust be disclosed to the stock exchange as soon as possible but not later than twenty fourhours after the date of Audit Committee meeting. However views of the Audit Committeemeeting held on February 13 2021 were not intimated to the Stock Exchange.
Pursuant to the above opinion your Director assure that this omission of intimation tothe Stock Exchanges was a rare occurrence and the Company will make sure no such omissionhappens in the future.
4. As required under Regulation 17(9) of SEBI (Listing Obligation and DisclosureRequirements) Regulations 2015 the Board of Directors has not laid down procedures aboutrisk assessment and minimization procedures.
Pursuant to the above opinion your Directors are conscious of the need to periodicallyundertake the risk assessment and minimization procedures there-for. During the yearunder review your Directors had desired to appoint an outside agency to undertakeEvaluation of Risk Assessment and Management Systems of the Company as of 31stMarch 2021. However during the year under review due to the uncertainties caused by theCOVID-19 pandemic the Company could not make an assessment on the subject. Further yourDirectors would like to inform you that the Board of Directors in its meeting held onAugust 112021 have duly adopted the Risk Management Policy.
5. Under Regulation 30 of SEBI (Listing Obligation and Disclosure Requirements)Regulations 2015 the following intimation shall be made to stock exchange within 24hours of such change however the same has been made beyond 24 hours:
- Mr. Prakash Chandra Sharma Chief Financial Officer resigned from the services of theCompany w.e.f. 30.06.2020; however he was relieved from the office of CFO with effectfrom 12.09.2020. The Company has made intimation to Stock Exchange on 14.09.2020.
- Credit Rating received by the Company from CRISIL Limited on 31.08.2020 was intimatedto Stock Exchange on 30.09.2020.
- Disclosure to Stock Exchange regarding appointment of Preeti Gandhi IndependentDirector of the Company is incomplete as details whether she is not debarred from holdingthe office of Director by virtue of any order of SEBI or any other such authority as perCircular of the BSE Limited and the National Stock Exchange of India Limited dated June20 2018 is missing.
- Outcome of the meeting including the financial results for the Quarter ended December31 2020 were intimated delayed beyond the period of 30 minutes to the Stock exchanges.Board Meeting ended on 11.44 a.m. and intimated to Stock exchange on 12.38 p.m.
In pursuant to above opinions the delay in filings and fragmentary informationdisclosed to the exchange were majorly due to disruption in business operation of theCompany due to widespread of COVID-19 and subsequent lockdowns. Your Directors will ensurethat no such occurrence incur in the future.
In compliance with Section 204 of the Act the Company has re-appointed M/s.Chandrasekaran Associates Company Secretaries as Secretarial Auditors for the financialyear 2021-22.
No frauds have been reported under Section 143(12) of the Act by the Auditors of theCompany.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
In terms of the provisions of the Act and Article of Association of the Company Mr.Amritesh Jatia (DIN: 02781300) retires by rotation at the ensuing annual general meetingand being eligible offers himself for re-appointment. Accordingly an appropriateresolution is proposed at Item No. 2 of the Notice convening the ensuing annual generalmeeting.
Your Directors recommend approving the resolution at Item No. 2 of the accompanyingNotice as Ordinary Resolution.
Considering the recommendations of the Nomination and Remuneration Committee the Boardin its meeting held on 11th August 2021 appointed Dr. Rajeev Uberoi as anAdditional Director under Section 161(1) of the Act in the capacity of Independent Non-Executive Director of the Company for a period of five consecutive years up to 10thAugust 2026
Based on the notice received from a shareholder under Section 160 of the Act andrecommendations of the Nomination and Remuneration Committee in its meeting held on 11thAugust 2021 the Board proposes to appoint him as an Independent Non- Executive Directorsubject to approval of shareholders at the ensuing annual general meeting in pursuance ofSections 149 152 and other applicable provisions of the Act read with rules madethereunder. Though he has enrolled with the Institute of Corporate Affairs but has yet toappear for/qualify the online proficiency self-assessment test the Board is of theopinion that Dr. Rajeev Uberoi fulfills the conditions specified in the ListingRegulations and the Act and is independent of the Management and that he possessesintegrity expertise and experience required for discharging the responsibilities ofIndependent Director and therefore has included an appropriate resolution for hisappointment as proposed at Item No. 3 of the accompanying Notice for the ensuing AnnualGeneral Meeting.
Your Directors recommend approving the resolution at Item No. 3 of the accompanyingNotice as Ordinary Resolution.
The above proposals has been duly approved and consented to by the Nomination andRemuneration Committee and the Board of Directors of the Company.
During the year under review Mr. Dipendra Bharat Goenka Non-Executive Director (DIN:01969285) resigned from the office of Director of the Company with effect from 30thApril 2020. Further Ms. Anita Thapar Executive Director- Administration and CorporateCoordination (DIN: 02171074) of the Company resigned from the said office effective 1stAugust 2020.
Mr. Akhilesh Bhuwalka (DIN: 02764273) was appointed as an Additional Director in thecapacity of Non Executive Director by the Board in its meeting held on 18thJune 2020 and at the 39th AGM held on 24th December 2020 wasappointed as a Director liable to retire by rotation.
Mr. Pinaki Misra Independent Non-Executive Director (DIN: 00568348) resigned beforethe expiry of his tenure effective 3rd September 2020 due to his professionalpreoccupations and confirmed that there was no other material reason whatsoever for hisresignation.
Later Mr. Ranjan Kishore Bhattacharya Independent Non-Executive Director (DIN:00331394) also resigned before the expiry of his tenure effective 7thSeptember 2020 due to unavoidable personal circumstances and confirmed that there was noother material reason whatsoever for his resignation.
Ms. Preeti Gandhi (DIN-08552404) was appointed as an Additional Director in thecapacity of an Independent Non-Executive Director by the Board in its meeting held on 13thSeptember 2020 to hold the office for a term of two consecutive years w.e.f. 13thSeptember 2020 to 12th September 2022 and at the 39th AGM wasappointed as an Independent Non Executive Director.
Subsequent to the end of the year under review Mr. Dinesh Chandra Kothari IndependentNon-Executive Director (DIN: 00195609) resigned from the said office with effect from 10thAugust 2021 before the expiry of his tenure due to unavoidable personal circumstancesand confirmed that there was no other material reason whatsoever for his resignation.
In the opinion of the Board of Directors of the Company all the IndependentNon-Executive Directors as on 31st March 2021 namely Dr. Lalit Bhasin Mr.Dinesh Chandra Kothari and Ms. Preeti Gandhi fulfilled the conditions specified in theListing Regulations and the Act and were independent of the Management during the yearunder review and continue to be independent during their tenure subsequent to the yearunder review.
All the Directors of the Company have also given declarations affirming that they arenot debarred from holding the office of Director by virtue of any order of SEBI or othersuch statutory authority as required under the Circular dated 20th June 2018issued by BSE Limited and National Stock Exchange of India Limited.
Neither the Managing Director nor the whole-time director of the Company receives anyremuneration or commission from any of the Company's subsidiaries except sitting fee tothe then whole-time director.
Mr. Prakash Chandra Sharma Vice President - Corporate Finance and Chief FinancialOfficer of the Company resigned from the services of the Company on 30th June2020 and vacated the said office effective 12th September 2020.
Based on the recommendations of the Nomination and Remuneration Committee and the AuditCommittee Mr. Dinesh Bhalotia designated as Director - Finance & Strategy wasappointed as the Chief Financial Officer of the Company with effect from 13thSeptember 2020. Further he resigned from the said office with effect from 28thJanuary 2021
Based on the recommendations of the Nomination and Remuneration Committee the Board inits meeting held on 13th September 2020 extended the tenure of Mr. DineshKumar Jain Vice-President (Corporate Affairs) & Company Secretary by one yeareffective 1st October 2020.
Subsequent to the end of the year under review Mr. Dinesh Kumar Jain Vice-President(Corporate Affairs) & Company Secretary resigned from the said office with effect from8th June 2021
Based on the recommendations of the Nomination and Remuneration Committee and the AuditCommittee Mr. Ashish Dhanuka designated as Manager (Accounts) was appointed as the ChiefFinancial Officer of the Company with effect from 24th July 2021.
Based on the recommendations of the Nomination and Remuneration Committee Ms. SaumyaGoel was appointed as the Company Secretary & Compliance Officer of the Company witheffect from 11th August 2021.
DIRECTORS' RESPONSIBILITY STATEMENT UNDER SECTION 134(5) OF THE COMPANIES ACT 2013
Pursuant to Section 134(5) of the Act your Directors confirm as under:
- that in the preparation of the annual accounts for the year ended 31stMarch 2021 the applicable Accounting Standards have been followed along with properexplanation relating to material departures if any;
- that the Directors have selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company at the end of thefinancial year under review and of the loss of the Company for that year;
- that the Directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingthe assets of the Company and for preventing and detecting fraud and other irregularities;
- that the Directors have prepared the annual accounts for the Financial year endedMarch 31st 2021 on a going concern basis;
- that the Directors have laid down internal financial controls that are being followedby the Company and that such internal financial controls are adequate and are operatingeffectively; and
- that the Directors have devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems are adequate and are operatingeffectively.
Significant accounting policies followed by the Company and the required disclosuresare detailed in the Notes to the Financial Statements. Further applicable Ind AS andrelated presentation and disclosure norms have been complied with.
INFORMATION REGARDING CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGNEXCHANGE EARNINGS & OUTGO
The information required in terms of Section 134(3)(m) of the Act read with Rule 8(3)of the Companies (Accounts) Rules 2014 pertaining to the conservation of energytechnology absorption and foreign exchange earnings and outgo to the extent possible inthe opinion of your Directors and forming part of this Report is given in AnnexureB'.
PARTICULARS OF EMPLOYEES & DISCLOSURES UNDER SECTION 197(12) OF THE ACT READ WITHRULE 5 OF THE COMPANIES (APPOINTMENT & REMUNERATION OF MANAGERIAL PERSONNEL) RULES2014
The information pursuant to Section 197(12) of the Act read with Rules 5(1) 5(2) and5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014in respect of directors key managerial personnel and employees of the Company is given inAnnexure C' and Annexure D' respectively and forms part of thisReport.
Save as otherwise stated above the Company has complied with the requirements ofcorporate governance as stipulated in the Listing Regulations.
Pursuant to the provisions of the Listing Regulations the Corporate Governance Reporttogether with the Auditors' Certificate thereon is annexed hereto as Annexure E'and Annexure F' respectively.
CORPORATE SOCIAL RESPONSIBILITY
Pursuant to Section 135 of the Act read with the Companies (Corporate SocialResponsibility Policy) Rules 2014 the Company has reconstituted the Corporate SocialResponsibility (CSR) Committee of the Board of Directors which presently comprises offour members viz. Mr. Shiv Kumar Jatia Managing Director who chairs the Committeemeetings and Dr. Lalit Bhasin Dr. Rajeev Uberoi and Ms. Preeti Gandhi IndependentNon-Executive Directors.
In compliance with the provisions of Section 135 of the Act read with the Rules framedthere-under and Schedule VII thereto the CSR Policy of the Company has been uploaded onthe website of the Company and can be accessed at http://www.asianhotelsnorth.com/pdf/CorporateSocialResponsibilityPolicyeffective01042019.pdf
Salient features of the said policy are as under:
- Defines roles and responsibilities of the CSR Committee;
- All designated CSR activities under the policy are permitted activities underSchedule VII to the Act; and
- The policy lays down a detailed execution monitoring and reporting mechanism.
Further the Annual Report on CSR activities in pursuance of Rule 8 of the Companies(Corporate Social Responsibility Policy) Rules 2014 describing inter-alia the detailsabout the policy developed and implemented by the Company on Corporate SocialResponsibility initiatives taken during the year by the Company in implementation of itsCSR Policy the reasons for the unspent amount on CSR if any and Composition of CSRCommittee is enclosed as Annexure G' and forms part of this Report.
Your Directors are conscious of the need to periodically undertake the risk assessmentand minimization procedures there-for.
Your Directors had desired to appoint an outside agency to undertake Evaluation of RiskAssessment and Management Systems of the Company as of 31st March 2021.However due to the ongoing uncertainties caused by the COVID-19 pandemic the Company hasbeen advised to wait for an appropriate time to make an assessment on the subject.
The Board of Directors in its meeting held on 11th August 2021 placed andapproved the Risk Management Policy pursuant to the provisions of Section 134 of theCompanies Act 2013 to identify and evaluate business risks and opportunities formitigation of the same on a continual basis. This framework seeks to create transparencyminimize adverse impact on business objective and enhance Company's competitive advantage.In your company risks are carefully mapped and a risk management framework is involved.The Company is faced with different types of risks each of such risks requires differentapproaches for mitigation. Risk Management Policy lays down the process for identificationand mitigation of risks. The policy is available on the website of the Company under thelink http://www.asianhotelsnorth.com/pdf/RiskManagementPolicy11082021 .pdf.
Further based on the market capitalization of the Company the provisions relating tothe formation of a Risk Management Committee is not applicable to the Company.
MEETINGS OF THE BOARD OF DIRECTORS
During the year under review eight Board meetings were held details of which aregiven in the Corporate Governance Report annexed to this Report as Annexure E'.
VIGIL MECHANISM/WHISTLE BLOWER POLICY
The Company is committed to adhere to the highest standards of ethical moral and legalconduct of business operations. The Company has established a vigil mechanism and theBoard of Directors of the Company had approved and adopted a Whistle Blower Policy'which is uploaded on the website of the Company and can be accessed athttp://www.asianhotelsnorth.com/pdf/ WhistleBlowerPolicyeffective01042019.pdf
The Whistle Blower Policy' provides that all employees and directors of theCompany are eligible to make protected disclosures to the competent authority i.e. theChairman of the Audit Committee with respect to any improper activity concerning theCompany. The policy provides for direct access to the Chairman of the Audit Committee. Themechanism provides for adequate safeguards against victimization of employees anddirectors to avail the mechanism and also provide for direct access to the Chairman of theAudit Committee in exceptional cases.
During the year under review neither any case was reported under the Whistle BlowerPolicy nor was anyone denied access to the said competent authority or the AuditCommittee.
In terms of Section 92(3) of the Act read Section 134(3)(a) thereof draft AnnualReturn of the Company for the year ended 31st March 2021 in the prescribedForm MGT-7 along with draft Certificate there-for issued by M/s. Sunni Gupta &Associates in Form MGT-8 has been uploaded on the website of the Company and can beaccessed at http://www.asianhotelsnorth.com/annual-returns.html
As soon as the aforesaid Annual Return is filed with the Ministry of Corporate Affairspost annual general meeting the final Form MGT- 7 and Form MGT-8 would be uploaded on theCompany's website at the above mentioned link.
The Board followed the following mechanism for evaluating the performance of the Boardits Committees and individual directors including the Chairman of the Company:
a. the Independent Directors through their exclusive meeting evaluate the performanceof Non- Independent Directors the Chairman and the Board as a whole;
b. the Nomination and Remuneration Committee considers the views of the IndependentDirectors through their exclusive meeting regarding the performance of Non-IndependentDirectors and based there-upon makes its recommendations to the Board about theirperformance;
c. the Nomination and Remuneration Committee evaluates the performance of IndependentDirectors and makes its recommendations to the Board about their performance; and
d. the Board finally evaluates the performance of all individual directors theChairman the Board as a whole and Committees thereof. While evaluating the performance ofthe Board it considers the views of the Independent Directors through their exclusivemeeting.
The Board of Directors of the Company has in place an evaluation criteria forassessment of its own performance that of the committees of the Board and the individualdirectors. Leadership abilities understanding the business dynamics strategic planningfor sustainable growth and protection of minority shareholders' interest are theessential criteria of the performance evaluation of the Directors.
The Board in its meeting held on 5th July 2021 has discussed its overallperformance on the parameters as laid down in the Nomination Remuneration and EvaluationPolicy and concluded that the Board and its Committees have been performingsatisfactorily. Further based on the aforesaid policy and the feedback received fromfellow directors the Board also evaluated the performance of the individual directors(including the Chairman) and found it satisfactory.
There was no action required to be taken during the year under review based on theprevious year's observations on the Board Evaluation. Further no action is proposed to betaken based on the observations on the Board Evaluation for the year under review.
The details of the evaluation criteria are enumerated in the Nomination Remunerationand Evaluation Policy which can be accessed at:http://www.asianhotelsnorth.com/pdf/NominationRemunerationandEvaluationPolicyeffective01042019.pdf
DECLARATION BY INDEPENDENT DIRECTORS
During the year under review all the Independent Non-executive Directors haveconfirmed and submitted declaration to the effect that they meet the criteria ofindependence as laid down under Section 149 and 150 of the Act read with rules framedthereunder and other applicable provisions of the Act read with relevant regulations ofthe Listing Regulations. Independent Non-Executive Directors have also submitteddeclarations for the financial year 2020-21 confirming that they continue to meet thecriteria of independence as laid down under aforesaid provisions.
Further they have confirmed that they have obtained registration with the IndianInstitute of Corporate Affairs as an Independent Director and such registration continuesto be valid; and that they shall ensure renewal of such registration within a period ofthirty days from the date of its expiry as applicable; and that they shall pass theOnline Proficiency Self-Assessment Test conducted by the abovenamed institute within aperiod of one year from the date of inclusion of their respective names in the databankif applicable in pursuance of Section 150 of the Act read with the Companies (Appointmentand Qualification of Directors) Rules 2014 and the Companies (Creation and Maintenance ofDatabank of Independent Directors) Rules 2019.
Further in terms of Regulation 25(8) of the Listing Regulations they have confirmedthat they are not aware of any circumstance or situation which exists or may be reasonablyanticipated that could impair or impact their ability to discharge their duties.
Reliance was placed on these confirmations/declarations while ascertaining the adequacyof number of independent directors for the purposes of compliance with Regulation 17 andother applicable regulations of the Listing Regulations.
All the Independent Directors have also confirmed that they have complied with theCompany's code of conduct. In the opinion of the Board all the independent non-executivedirectors fulfill the conditions specified under Section 149 of the Act and the ListingRegulations as amended and that they are independent of the management. The Board alsorecommends their continued association with the Company as independent directors. In theopinion of the Board of Directors of the Company all Independent Directors of the Companyhave integrity expertise experience as prescribed under the Companies (Appointment andDisqualification of Directors) Rules 2014 read with the Companies (Accounts) Rules 2014(including amendment thereof).
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
All contracts arrangements or transactions entered in to by the Company during thefinancial year 2020-21 were in the ordinary course of business and were at an arm'slength basis. Relevant Related Party Disclosures under the provisions of the Act and theListing Regulations as applicable are provided in the Note no. 42 to the stand-alonefinancial statements.
For all foreseeable repetitive related party transactions prior omnibus approval ofthe Audit Committee is obtained as per applicable laws on yearly basis considering thatsuch approval is in the interest of the Company.
During the year under review the Company had not entered into any contractarrangement or transaction with related parties which could be considered material inaccordance with the Company's policy on materiality of related party transactions readwith the provisions of the Listing Regulations. Accordingly there are no transactionswhich are required to be reported in Form AOC-2 in pursuance of Section 188(1) of the Act.
The Policy on the related party transactions is available on the Company's website athttp://www.asianhotelsnorth.com/pdf/Policy_for_Related_Party_Transactions_effective%2001042019.pdf
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
Details of Loans Guarantees and Investments covered under the provisions of Section186 of the Act as applicable are provided in the Note nos. 5 18 and 21 to thestand-alone financial statements.
NOMINATION REMUNERATION AND EVALUATION POLICY
The role responsibilities powers and terms of reference of the Nomination andRemuneration Committee were in conformity with Section 178 of the Act and Rules madethere-under and Regulation 19 of the Listing Regulations and relevant Schedule theretoas amended or re-stated from time to time during the year under review. Moreover theBoard of Directors has ensured that the said policy enumerates the criteria laid down fornomination/selection appointment evaluation and remuneration of the directors and keymanagerial personnel; and determines qualifications positive attributes and independenceof directors and/or key managerial personnel and is uploaded on the website of theCompany at :http://www.asianhotelsnorth.com/pdf/NominationRemunerationandEvaluationPolicyeffective01042019.pdfThe salient features of the said policy are as under:
a) Role of the Nomination and Remuneration Committee
- Ensure diversity of Board;
- Formulate criteria for determining qualifications positive attributes andindependence of a director and recommend to the Board their appointment;
- Identify persons who are qualified to become directors and/or senior managementpersonnel and recommend to the Board their appointment;
- Recommend to the Board a remuneration policy for the directors key managerial/seniormanagement personnel; and
- Specify the manner for effective evaluation of performance of the Board itscommittees and each category of directors
b) Appointment of Directors/KMPs/SMPs as per criteria set-out in the NominationRemuneration and Evaluation Policy
c) Guiding principles for quantum and composition of remuneration remunerationstructure for whole-time directors and non-executive directors
d) Criteria for evaluation of performance of whole-time directors non-executivedirectors and independent non-executive directors
During the year under review the Audit Committee comprised of four members namely Dr.Lalit Bhasin Mr. Dinesh Chandra Kothari and Ms. Preeti Gandhi Independent Non-executiveDirectors and Mr. Shiv Kumar Jatia Managing Director.
Mr. Dinesh Chandra Kothari Independent Non-Executive Director resigned from theoffice of Director of the Company effective 10th August 2021 and accordinglyceased to be member of the Audit Committee. Further Dr. Rajeev Uberoi was appointed as anIndependent Non-Executive Director of the Company on 11th August 2021 andsubsequently on the same day he was co-opted as member of Audit Committee of the Company.
The terms of reference of the Audit Committee and information on the Committee meetingsheld during the year under review are detailed in the Corporate Governance Report annexedas Annexure E' and forms part of this Report.
Further your Directors would like to inform that all the recommendations made by theAudit Committee during the year under review were duly accepted by the Board.
CHANGE IN THE NATURE OF BUSINESS
During the year under review there has been no change in the nature of business of theCompany.
During the year under review the Company has not invited or accepted deposits coveredunder Chapter V of the Act and the Rules made thereunder. Further no deposits areoutstanding on the end of financial year 2020-21.
LISTING ON STOCK EXCHANGES
The equity shares of the Company are listed on The National Stock Exchange of IndiaLimited and BSE Limited. Further your Directors would like to inform that the Company haspaid up to date Annual Listing Fees to the respective Stock Exchanges.
During the year the Company has complied with the applicable Secretarial Standardsissued by the Institute of Companies Secretaries of India (ICSI) and notified by theMinistry of Corporate Affairs.
MANAGEMENT DISCUSSION AND ANALYSIS
Pursuant to Para B of Schedule V to the Listing Regulations the Management Discussionand Analysis Report is given below:
Industry Structure & Developments and Opportunities & Outlook
The year 2020 was a peculiar year marred by the COVID-19 pandemic and consequentnationwide and worldwide lockdown measures implemented since March 2020. Economicactivities came to a grinding halt during the second quarter of 2020. The global economycontracted by 3.5% in 2020.
India implemented an early and stringent lockdown from late March to May to curb thepace of spread of COVID-19. With the economy brought to a standstill for two completemonths the inevitable effect was a 23.9 % contraction in GDP during Q1: FY 2021 and 7.5 %in Q2: FY 2020-21 due to the stringent lockdown imposed during March-April 2020. Theeconomy was gradually unlocked since June 2020 and has experienced a V-shaped recoverysince then.
The contact intensive services sector was severely impacted particularly sub-sectorssuch as tourism aviation and hospitality. The first half of FY 2020-21 saw servicesector contract by almost 16% . Gross Value Added (GVA) of service sector is estimated tocontract by 8.8 per cent in 2020-21 whereas it grew by 5.5 per cent in 2019-20. It ispertinent to note that while the service sector contracted by over 20 per cent in the Q1of FY 2020-21 the contraction narrowed to 11.4 per cent in the Q2 of FY 2020-21. Thispace of recovery is broadly aligned with high frequency indicators that point to a pick ineconomic momentum with the measured opening up of the economy from June 2020.
The Economic Survey project India's real GDP to grow by 11% in 2021-22 providednormalisation of economic activities continues and the rollout of COVID-19 vaccinesgathers traction. (Source - Economic Survey 2020-21)
The rich and varied culture of India makes it a major travel destination for manyinternational tourists. However 2020 turned out to be one of the worst years for thecountry's travel and hospitality sector as a result of the pandemic. Travel restrictionsimposed by the Indian government and fears associated with COVID-19 compelled travellersto cancel their business trips conferences and leisure travels both domestic andinternational. Summer holiday bookings to destinations within India were cancelled. Mostinternational and domestic flights remained suspended during the two month lockdown fromApril to May 2020. The latter half of 2020 saw the resumption of domestic leisure travelto many popular leisure destinations and to staycations in primary cities. Despite thesepositive trends the Indian hotel industry was staring at a loss of Rs. 90000 crore inrevenue by December 2020 due to the continued curb on travel. The occupancy rate fell to18%-20% while Revenue Per Available Room (RevPAR) was down by 80%.
With the travel restrictions and limited international travel the India tourism andhospitality industry is expected to see more of domestic travel and staycations in nearfuture. To boost the sector travel and hospitality industry has come up with new policiesand concepts that prioritise health and hygiene. "Digital" is the new wayforward for the industry as many hotels are adopting contactless methods for check-inscheck-outs and payments.
The Indian tourism and hospitality industry has emerged as one of the key drivers ofgrowth among the service sector in India. Tourism in India has significant potentialconsidering the rich cultural and historical heritage variety in ecology terrains andplaces of natural beauty spread across the country. Another factor is India's emergence asa destination to avail world class medical facilities at competitive cost.
Threats Risks and Concerns
The major threat to the tourism and travel industry is the widespread of COVID-19.Travel restrictions owing to pandemic continue to impact hospitality travel and tourismsectors within India and around the world. The Indian hospitality industry is undoubtedlyone of the biggest casualties of the COVID-19 outbreak as demand has declined to anall-time low. Global travel advisories suspension of Visas coupled with decline inInternational tourists even after relaxation in lockdown guidelines has impacted thebusiness of the Company.
Another challenge to the organized hotel industry is the increasing availability ofand guest preference for the serviced apartments for short-term or long-term stayproviding larger rooms and more space with all the luxuries of a premium hotel at a farmore competitive rate.
Increased competition in the last few years has eroded the market share of theCompany's hotel thus impacting the occupancy levels and room rates. One of the mostcritical developments shaking up the hospitality industry is the growth of the sharingeconomy. Airbnb who paved the way in the accommodations sector of the hospitality industryhas competition and no longer is the only player.
Talent management is a major challenge for the hospitality sector. Inadequate supply ofquality talent and increased competition for talent within the sector and from competingservice sectors has made attrition a significant issue to be dealt with.
Company's strategy for sustained growth in medium to long term
For the sustained growth of an organization it is imperative that the Company keepsexploring newer opportunities of growth either through expansion or venturing into newprojects. In its endeavor for sustained growth the Board of Directors of the Company iscontemplating how to best utilize the additional FAR (Floor Area Ratio) of appox. 30000sq. meters which is available to the Company in respect of land where hotel Hyatt RegencyDelhi is situated subject to payment of requisite charges to the authorities concerned.
Review of Operational and Financial performance
The Company achieved aggregate revenue of Rs. 72.58 crore from operations for the yearended 31st March 2021. The said revenue in the prior year was Rs. 252.39crore. Detailed discussions are given under Financial Results & the State ofCompany's Affairs' hereinabove.
Maintenance of Cost Records
The Company is not required to maintain cost records as per sub-section (1) of Section148 of the Companies Act 2013.
Significant Changes in Key Financial Ratios
Key financial ratios for the year under review vis-a-vis prior year are as under:
|S. No. Key Financial Ratio ||FY 2020-21 ||FY 2019-20 |
|i Operating Profit Margin (%)* ||(27.52) ||21.75 |
|ii Net Profit Margin (%)* ||(933.70) ||(23.65) |
|iii Debtors Turnover ||4.70 ||19.66 |
|iv Inventory Turnover ||12.80 ||24.44 |
|v Current Ratio# ||0.08 ||0.21 |
|vi Debt Equity Ratio ||2.58 ||1.43 |
|vii Interest Coverage Ratio* ||(0.38) ||0.41 |
|viii Return on Net Worth (%)* ||(187.10) ||(9.82) |
* During the year under review the revenue from operations was impacted primarily dueto Covid-19 outbreak resulting in reduced operating profit margin and increased net lossas compared to the prior year. Decrease in profit before interest and depreciation andincrease in interest cost has resulted in reduced Interest Coverage Ratio.
#Increased cash loss during the year under review has adversely impacted the CurrentRatio.
Segment wise performance
During the year under review your Company operated an integrated hotel business atonly one location i.e. New Delhi. Power generation the other business segment beingpursued by the Company is governed by a different set of risks and returns. Your Companyhad two Wind Turbine Generators operating in Maharashtra but the quantum of assets aswell as revenue generated was not significant enough for reporting in terms of theapplicable Accounting Standard.
Internal Control Systems and their Adequacy
The Company has standard operating procedures for each operational area. It has inplace adequate reporting systems in respect of financial performance operationalefficiencies and reporting with respect to compliance of various statutory and regulatorymatters. As detailed above the Internal Auditors have regularly conducted exhaustiveaudits pertaining to different operational areas and their reports detailing theirfindings and observations were periodically placed before the Audit Committee. The AuditCommittee also takes stock of the actions taken on the observations of and recommendationsmade by the Internal Auditors.
The Company has in place adequate internal controls and systems and these are operatingeffectively.
Human Resources and Industrial Relations
An organization's success depends largely on its human resources its management andgood industrial relations. Your Company has always viewed human resource development as acritical activity for achieving its business goals. The Company has maintained cordialindustrial relations during the year and continued to provide comprehensive welfarefacilities to its employees to take care of their health efficiency economic bettermentetc. and to enable them to give their best at the workplace. It has always supportedparticipative culture in the management of the enterprise through a consultative approachwith the collectives establishing a harmonious relationship for industrial peace leadingto higher productivity. Employees' participation is also ensured throughinformation-sharing with collectives and employees on a regular basis while seeking theirsupport suggestions and cooperation.
The Company has in place a Policy against Sexual Harassment and has also formed anInternal Complaints Committee in compliance with the provisions of the Sexual Harassmentof Women at Workplace (Prevention Prohibition and Redressal) Act 2013.
During the year under review no complaint was received in pursuance of the SexualHarassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013.
The Company enjoys harmonious relationship with its employees. The Company had 577employees on its rolls as on 31st March 2021 (previous year end 744)
PROCEEDING UNDER INSOLVENCY AND BANKRUPTCY CODE 2016
The Company has not made any application or any proceeding pending under the Insolvencyand Bankruptcy Code 2016 (31 of 2016) ("IBC Code") during the year. Further atthe end of the year Company does not have any proceedings related to IBC Code.
THE DETAILS OF DIFFERENCE BETWEEN AMOUNT OF THE VALUATION DONE AT THE TIME OF ONE TIMESETTLEMENT AND THE VALUATION DONE WHILE TAKING LOAN FROM THE BANKS OR FINANCIALINSTITUTIONS ALONG WITH THE REASONS THEREOF
During the year under review the Company has not made one time settlement thereforethe same is not applicable
Your Directors place on record their sincere appreciation and gratitude to theCompany's valued customers the Government of India State Government of Delhi and theFinancial Institutions and Banks for their continued support and confidence in theCompany.
Your Directors also place on record their sincere gratitude to Hyatt International fortheir co-operation and guidance.
Your Directors also commend the sincere efforts put in by the employees at all levelsfor the growth of the Company.
FOR AND ON BEHALF OF THE BOARD
| ||SHIV KUMAR JATIA |
| ||Chairman & Managing Director |
| ||DIN: 00006187 |
|Place: New Delhi || |
|Dated : 11th August 2021 || |