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Benares Hotels Ltd.

BSE: 509438 Sector: Services
NSE: N.A. ISIN Code: INE664D01019
BSE 00:00 | 18 May 1225.00 1.00






NSE 05:30 | 01 Jan Benares Hotels Ltd
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52-Week high 1350.00
52-Week low 1131.35
Mkt Cap.(Rs cr) 159
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OPEN 1225.00
CLOSE 1224.00
52-Week high 1350.00
52-Week low 1131.35
Mkt Cap.(Rs cr) 159
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Benares Hotels Ltd. (BENARESHOTELS) - Director Report

Company director report


The Directors hereby present the Forty Eighth Annual Report of the Company togetherwith the Financial Statement (Audited Statements of Account) for the year ended 31stMarch2019.


(Rs. Lakhs) (Rs. Lakhs)
2018-19 2017-18
Income 6038.80 4827.52
Gross Profit for the year 1816.40 1214.48
Less: Depreciation 522.88 417.31
Less: Interest 75.80 12.32
Profit before tax 1217.72 784.85
Less: Provision for Tax:
- Current Tax 271.54 301.30
- Deferred Tax 73.89 (157.00)
- Provision oftax ofearlier years ( Net ) - (7.74)
Profits after Taxes 872.29 648.29
Add: Other Comprehensive Income (Net of Taxes) 2.13 1.07
Total Comprehensive Income 874.42 649.36
Add: Balance brought forward from previous year 4232.84 3818.18
Balance available for appropriations 5107.26 4467.54
Less: Dividend Paid 195.00 195.00
Less: Tax on Dividend 40.10 39.70
Less: Amount transferred to General Reserve - -
Balance Carried forward 4872.16 4232.84


The Gateway Hotel Ganges Varanasi has been re-branded as Taj Ganges Varanasi afterextensive renovation which will enhance the positioning of the hotel leading to higherprofitability and revenues. The Hotel has completed two phases of renovation starting from2017/18 in which 96 rooms Lobby and the Tea Lounge have been completely renovated.

During the year your Company added a new Banquet Hall with the size of seating capacityapproximately 7700 square feet to its facilities at Taj Ganges Varanasi to cater to theenhanced demand for meetings and conventions. This is the largest banquet venue in a fivestar deluxe hotel in Varanasi.

The Total Income for the year ended 31st March 2019 at Rs. 6039 lakhs represents agrowth of 25% over the previous year. The room revenue increased by 18% driven by growthin rooms per day & average room rate. The Food & Beverage Revenues increased by36% over the previous year largely driven by Banquet Revenue.

Taj Ganges Varanasi has improved its performance owing to increase in Room Revenue onaccount of increase in ARR post renovation and Increase in F&B Revenue majorly fromBanquets. The overall Revenue of The Gateway Hotel Gondia has improved significantly. Thetotal revenue for Taj Nadesar Palace has however marginally improved over the previousyear. The Gross Operating Profit (EBIDTA) achieved by the Company for the year wasatRs.1816.40 lakhs i.e an increase of50% over the previous year.


The total borrowings (Inter Corporate Deposits) stood at Rs. 5.00 crores as atMarch312019 at the same level as last year borrowed at 9% from United Hotels Limited.


Finance cost for the year ended 31st March 2019 was Rs.75.8 lakhs (PreviousyearRs.12.32Lakhs).


The Profit before Tax for the year was at Rs. 1217.72 Lakhs as compared to Rs. 784.85lakhs for the previous year. The Profit after Tax for the year was at Rs. 872.29 lakhs ascompared to Rs. 648.29 Lakhs for the previous year.


Keeping in view of the performance of the Company and the planned capital expenditurefor the year 2019-20 your Directors recommend the payment of dividend @ 150 % i.e. Rs.15/- per equity share (previous year Rs. 15/- per equity share). The dividend on equityshares if approved by the Members would involve a cash payout of Rs. 235.08 lakhsincluding dividend distribution tax of Rs. 40.08 Lakhs.


The Company had no employees during the year who were in receipt ofremunerationaggregating to:

(a) Not less than Rs. 102.00 Lakhs for the year if employed throughout the financialyear or

(b) Not less than Rs. 8.50 Lakhs per month if employed for part ofthe financial year.


During the year under report Mr. Shriraman resigned from the directorship of theCompany with effect from June 19 2018. The Directors place on record their appreciationof the services rendered by Mr. Shriraman during his tenure as Director of the Company.

In accordance with Section 149 of the Act and SEBI (LODR) Regulations 2015 (SEBIListing Regulations) Mr. Puneet Raman was appointed as Additional Director of the Companyin the capacity of Independent Director effective September 17 2018 on the recommendationof the Nomination & Remuneration Committee.

In terms of Section 161 of the Act and Article 122 of the Articles of Association ofthe Company Mr. Raman holds office up to the date of the Annual General Meeting of theCompany. It is proposed to

appoint Mr. Raman as an Independent Director of the Company at the ensuing AnnualGeneral Meeting (AGM) for a period of 5 years commencing from September 172018.

The term of appointment of Mrs. Rukmani Devi as an Independent Director is expiring onAugust 27 2019. It is proposed to re-appoint Mrs. Rukmani Devi as an Independent Directorfor a further period of five years w.e.f. August 28 2019 upto August 27 2024.

Pursuant to Section 152 and other applicable provisions of the Act and the Articles ofAssociation of your Company one-third of the Directors (other than Independent Directors)as are liable to retire by rotation shall retire every year and if eligible offerthemselves for re-appointment at every AGM. Consequently Mr. Rohit Khosla (DIN 07163135)Director of the Company is liable to retire by rotation and being eligible seeksreappointment in accordance with provisions ofthe Act.

The approval of the shareholders for their appointments/re-appointment as Directors hasbeen sought in the Notice convening the AGM of your Company. The disclosures pertaining toDirectors being appointed/ re-appointed as required pursuant to Regulation 36 of theListing Regulations Clause 1.2.5 of the Secretarial Standards 2 are given in theexplanatory statement to the Notice convening the AGM forming part ofthe Annual Report.

The approval of the shareholders for their appointments/ re-appointment as Directorshas been sought in the Notice convening the AGM of your Company.

Further during the year under review the non executive Directors of the Company hadno pecuniary relationship of transactions with the Company other than sitting feescommission and reimbursement of expenses incurred by them for the purpose of attendingmeetings of the Board/Committee and general meeting ofthe Company.


Mr. Vijay Partap Shrikent Chief Executive Officer (CEO) Mr. Sopan KediaChiefFinancial Officer (CFO) and Ms. Vanika Mahajan Company Secretary of the Company are theKey Managerial Personnel of the Company in terms of Section 203 of the Companies Act 2013


The information pursuant to Rule 5 of The Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 is given in Annexure 1.


The Company does not have any subsidiary company.


The Indian Hotels Company Limited (IHCL) is the Ultimate Holding Company ofthe Company.


During the year under review five Board Meetings were held and the intervening gapbetween the meetings did not exceed the period of one hundred and twenty days the detailsof which are given in the Corporate Governance Report.


Your Company has an Audit Committee with Mr. Moiz Miyajiwala Mrs. Rukmani Devi and Mr.Rohit Khosla as its members. During the year under report Mr. Shriraman ceased to be themember of the Audit Committee consequent to his resignation from the Directorship oftheCompany.

In line with the Tata Code of Conduct ('TCOC') your Company believes in the conduct ofthe affairs of its constituents in a fair and transparent manner by adopting the higheststandards of professionalism honesty integrity and ethical behavior.

Your Company has a Whistleblower Policy establishing vigil mechanism to provide aformal mechanism for the Directors and employees to report their concerns about unethicalbehavior actual or suspected fraud or violation of the Company's Code of Conduct orethics policy. The policy provides for adequate safeguards against victimization ofDirectors and employees who avail of the mechanism and also provided them direct access tothe Chairman of the Audit Committee. It is affirmed that no personnel of the Company hasbeen denied access to the Audit Committee. The policy is in line with the provisions ofSection 177(9) of the Act and Regulation 22 of the SEBI listing Regulations. The saidPolicy can be accessed on your Company's website at policies/Whistle_Blower.pdf


In terms of Section 135 of the Companies Act 2013 (the Act) your Company has theCorporate Social Responsibility (CSR) Committee of the Board with Dr. Anant Narain SinghMrs. Rukmani Devi and Mr. Rohit Khosla as the members of the Committee. This Committee hasalso responsible for sustainability and is now known as CSR & SustainabilityCommittee. The Company has in place a CSR policy in line with schedule VII of the Act. Thebrief outline of the CSR Policy of your Company and the initiatives undertaken by yourCompany on CSR activities during Financial Year 2018-19 are set out in "Annexure 2''of this Report in the format prescribed in the Companies (Corporate Social ResponsibilityPolicy) Rules 2014. The CSR policy is available on the website of your Company athttps:// policies/CSR%20POLICY.pdf


In terms of Section 178(1) of the Companies Act 2013 (the Act) the Company has aNomination and Remuneration Committee (NRC) of the Board with Mr. Moiz Miyajiwala Dr.Anant Narain Singh and Mrs. Rukmani Devi as the members of the Committee. During the yearunder report Mr. Shriraman ceased to be a member of the Nomination & RemunerationCommittee consequent to his resignation from the Directorship of the Company. TheCommittee met three times during the year on May102018 August 72018 andMarch 142019.

The Company has a policy relating to the payment of remuneration for the directorsKMPs and other senior employees pursuant to the provisions ofsection 178(3) and SEBIListing Regulations. The key features of the said policy are:

- Overall remuneration (sitting fees and Commission) should be reasonable andsufficient to attract retain and motivate directors aligned to the requirements oftheCompany;

- Overall remuneration practices should be consistent with recognized best practices;

- Within the parameters prescribed under the law the payment of sitting fees andcommission will be recommended by NRC and approved by the Board;

- The aggregate commission payable to the Directors will be recommended by NRC to theBoard based on company performance profits return to investors shareholder valuecreation and any other significant qualitative parameters as may be decided by the Board;

- The quantum of commission for each director shall be recommended by NRC to the Boardbased upon the outcome of the evaluation process drive by various factors includingattendance and time spent in the Board and committee meetings individual contributions atthe meetings and contributions made by the Directors other than in meetings.

It is affirmed that the remuneration paid to Directors KMP and all other employees isas per the Remuneration policy of your Company. The Remuneration policy for Directors KMPand other employees is uploaded on the website of your Company athttps://www.benareshotels limited .com


Your Company has zero tolerance for sexual harassment at its workplace and has adopteda policy on prevention prohibition and redressal of sexual harassment at the workplace inline with the provisions of the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013 ('POSH Act') and the Rules thereunder for preventionand redressal of complaints of sexual harassment at workplace.

The Company has an ‘Internal Complaints Committee' (ICC) under The SexualHarassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013 for theprevention and redressal ofcomplaints ofsexual harassment and for the matters concernedconnected or incidental thereto.

During the financial year 2018-19 the Company received one complaint at Nadesar Palaceon sexual harassment. The said complaint was appropriately addressed and closed and theaccused employee has resigned from the Company and no case remains pending as on March312019.

An ICC has been constituted in accordance with the provisions of the POSH Act toredress complaints received regarding sexual harassment and all the provisions regardingthe constitution are complied with.


In terms of Section 149 of the Act and Regulation 16(1) of the Listing RegulationsMrs. Rukmani Devi Mr. Moiz Miyajiwala and Mr. Puneet Raman are the Independent Directorsof the Company as on March 31 2019. The Independent Directors have submitted adeclaration that each of them meets the criteria for independence as laid down underSection 149(6) of the Act read with Rules framed thereunder and Regulation 16 of theListing Regulations and that they are not aware of any circumstance or situation whichexists or is anticipated that could impair or impact their ability to discharge theirduties with an objective independent judgment without any external influence as requiredunder Regulation 25 of Listing Regulations.


The Company has an ongoing familiarization programme for the Independent Directors withrespect to their roles rights responsibilities in the Company nature of the industry inwhich the Company operates business model of the Company etc. All the Board members ofthe Company are afforded every opportunity to familiarize themselves with the Companystatutory changes impacting the Company its Management and its operations and all theinformation /documents sought by them is/are shared with them for enabling a goodunderstanding of the Company its various operations and the industry of which it is apart. The details of the familiarization programme for Independent Directors are disclosedon the Company's website under the weblink: directors/Familiarization%20Programme%20-%20BHL.pdf


The Company has not given any loans or guarantees nor has made any investments underSection 186 of the Act during the year under review.


Pursuant to the provisions of the Section 204 of the Act and the Companies (Appointmentand Remuneration of Managerial Personnel) Rules 2014 the Board of Directors haveappointed Arvind Kohli & Associates Company Secretaries to undertake the SecretarialAudit of your Company for the financial year 2018-19. The secretarial audit report isattached to this Report as Annexure 3. The report does not contain any qualificationsreservation disclaimers or adverse remarks.


The details forming part of the extract of the Annual Return in Form MGT-9 as perSections 92(3) and 134(3) of the Act read with the Rules framed thereunder are given asAnnexure IV which forms part of this Report. The Annual Return for Financial Year 2018-19is also available on the Company's website at


All related party transactions that were entered into during the financial year underreport were at arm's length basis and in the ordinary course of business.

The Company has developed a Related Party Transactions Framework under the Policy onRelated Party Transactions which policy is also available at Company's website:https://www.benareshotels for the purpose of identification and monitoring of suchtransactions. Prior omnibus approval of the Board is obtained for transactions which areof a foreseen and repetitive nature. The transactions entered into pursuant to the omnibusapproval so granted and a statement giving details of all the related party transactionsis placed before the Audit Committee for its approval on a quarterly basis.

Other than transactions entered into in the normal course ofbusiness the Company hasnot entered into any materially significant related party transactions during the yearwhich could have a potential conflict of interest between the company and its promotersDirectors Management and/or relatives save and except that the transaction with TheIndian Hotels Co. Ltd. the ultimate holding company during the year exceeded 10% of theannual gross turnover of the Company for the previous year the approval for which wastaken from the shareholders by way of a special resolution at the AGM held on August 212015.


As required by SEBI Listing Regulations the report for the year 2018-19 on ManagementDiscussion and Analysis and Corporate Governance along with the Auditors' Certificateregarding compliance of conditions of Corporate Governance norms as stipulated inRegulation 34 read along with Schedule V of the SEBI Listing Regulations forms part of theAnnual Report.


There are no material changes affecting the financial position of the Companysubsequent to the close of the Financial year 2018-19 till the date of this report.


During the year under report there were no significant and material orders passed bythe regulators or courts or tribunals impacting the going concern status and the Company'soperations.


Although not mandatory your Company has aligned Risk Management with Audit Committeeas a measure of good governance. The Risk Management Committee is tasked with theresponsibility to frame implement and monitor the risk management plan for the Company.The Committee is responsible for reviewing the risk management plan and ensuring itseffectiveness. The details of the Committee and its term of reference are set out in theCorporate Governance Report.

Your Company has a Risk Management Policy pursuant to the provisions of Section 134 ofthe Act to identify and evaluate business risks and opportunities for mitigation of thesame on a continual basis. This framework seeks to create transparency minimize adverseimpact on business objective and enhance your Company's competitive advantage. The riskmanagement framework defines the risk management approach across the enterprise at variouslevels including documentation and reporting.

The framework enables risks to be appropriately rated and graded in accordance withtheir potential impact and likelihood. The two key components of risks are the probability(likelihood) of occurrence and the impact (consequence) of occurrence if the risk occurs.Risk is analyzed by combining estimates of probability and impact in the context ofexisting control measures.

Existing control measures are evaluated against Critical Success Factors (CSFs) and KeyPerformance Indicators (KPIs) identified for those specific controls. Guiding principlesto determine the risk consequence (impact) probability of occurrence (likelihood factor)and mitigation plan effectiveness have been set out in Risk Register.

The Key business risks identified by the Company and its mitigation plans are as under:

Strategy Risks: Risk of erosion of market dominance by losing market share whichoriginates from the choices we make on markets resources and delivery models that canpotentially impact our competitive advantage in the medium and long term. Loss of F&Battractiveness on account of pricing/design/ competition.

Industry and Economic Risks: High dependence on US Europe and East Asian markets forforeign tourists arrival. The economic situation in these parts of the world has apotential impact on the entire tourism industry. Risks arising from the development in theregulatory environment that could impact the Hotel/Tourism Industry. Risks due togeographic concentration of business primarily in the city of Varanasi.

Operational Risks: High dependence on several technology platforms & systems tooperate business both Internal & External. Cost overruns/delays in completion ofprojects. Loss of critical/sensitive data due to leakage/loss/hacking. Increase in fixedcost elements beyond entity control. Highly litigious nature of the industry/adverseconsequences of litigation against company. non-renewal of key licenses and NOCs.

Safety and Security Risks: Risks arising from factors such as Fire AccidentsElectricity mishaps etc. Business interruption on account of natural calamities/act ofGod/ riots & strikes/ political instability and terrorism.

Resources: Risks arising from sub-optimal succession planning and retention of talentpool. Inappropriate utilization of financial capital talent and infrastructure.


Risk Identification and Impact Assessment: Risk assessment enables risks to beappropriately rated and graded in accordance with their potential impact and likelihood.The two key components of risks are the probability (likelihood) of occurrence and theimpact (consequence) if the risk occurs. Risk is analyzed by combining estimates ofprobability and impact in the context of existing control measures and included in therisk register. Apart from risk register internal audit findings also provide input forrisk identification and assessment which is carried out on an annual basis across allfunctions.

Operational risks are assessed primarily on three dimensions namely strength ofunderlying controls compliance to policies and business procedure effectiveness.

Risk reporting and Disclosure: Risks to the achievement of key business objectivestrend line of risk level impact and mitigation actions impact and mitigation action arereported and discussed. The escalation of risk information is timely accurate and givescomplete coverage of the key risks to support management decision making at all levels.

Risk Mitigation and Monitoring: Each Manager creates a risk mitigation plan byemploying an effective system of internal controls & checks and balances to mitigatethe risks in the most effective manner including designating responsibilities andproviding for upward and onward communication of any significant issues that may meritattention or escalation. All employees actively engage in risk management within their ownareas of responsibility.

Integration with Strategy and Business Planning:

Identified risks to the business objectives in the near term medium term and long termare used as one of the key inputs for the development of strategy and annual businessplan. Key strategic initiatives are identified to mitigate specific risk.


PKF Sridhar & Santhanam LLP Chartered Accountants (Registration No.003990S/S200018) were appointed as the Statutory Auditors of the Company by the Membersfor a term of five consecutive years from the conclusion of 47thAGM till the conclusionof the 52nd AGM of the Company under Section 139(1) of the Act and the rules framedthereunder furnished a certificate oftheir eligibility.

The report of the Statutory Auditors along with the Notes to Schedules forms part ofthe Annual Report and contains an unmodified opinion without any qualificationreservation disclaimer or adverse remark.

The Statutory Auditors of the Company have not reported any fraud as specified inSection 143 (12) of the Act.


The Company is not required to maintain cost records as specified by the CentralGovernment under sub - section (1) of Section 148 of the Act.


During the year 2018-19 the Company has complied with the Secretarial Standards issuedby The Institute of Company Secretaries of India on Board Meetings and General Meetings.


The Company has always been conscious of the need for conservation of energy and hasbeen sensitive in making progress towards this end. The Company is in the process ofinstalling Solar Power Generation equipment at the Hotel in Varanasi. The Company hasimplemented following energy conservation initiatives at the hotel:

- Installation of New Diesel Generator with higher efficiency for saving of dieselconsumption

- Replacement of old kitchen equipment with energy efficient Equipments.

- Replacement of cold rooms in kitchen which are energy efficient.

- Installation of FCU and LED lights in renovated rooms with higher efficiency.

- Installation of LED lights in back office area in place of CFL


The activities of the Company do not involve the absorption of technology as envisagedto be furnished pursuant to The Companies (Accounts) Rules 2014.


In terms of the provisions of Section 134(3)(f)(m) of the Act read with Rule 8(3)(C)of The Companies

(Accounts) Rules 2014 the foreign exchange earned in terms of actual inflows duringthe year and the foreign exchange outgo during the year in terms of actual outflows isfurnished below:-

2018-19 2017-18
Rs. Lakhs Rs. Lakhs
a) Value of Imports
Stores Supplies and Spare Parts for Machinery 0.44 8.04
Value of Imports (CIF) Capital Imports 73.85 240.07
b) Expenditure in Foreign Currency
Professional and Consultancy Fees 7.36 11.73
Other Expenditure in Foreign Currency 16.47 22.48
c) Earnings in Foreign Currency
Earnings in Foreign Exchange 818.45 726.57


The annual evaluation process of the Board of Directors individual Directors andCommittees was conducted in accordance with the provisions of the Act and the ListingRegulations.

Based on the review conducted by the Nomination & Remuneration Committee the BoardofDirectors has made the annual evaluation of its own performance and that of itscommittees and individual directors by assessing the questionnaires furnished by thedirectors/members of various committees in respect of their self-assessment as well as theassessment of the Board/Committees followed by the discussions with the directors/membersofthe Committees.


Your Company has an Internal Control System commensurate with the size scale andcomplexity of its operations. The scope and authority of the Internal Audit function iswell defined in the organization. To maintain its objectivity and independence theInternal Audit function reports to the Chairman ofthe Audit Committee ofthe Board.

The Internal Auditors monitors and evaluate the efficacy and adequacy of internalcontrol systems in the Company its compliance with operating systems accountingprocedures and policies at all locations of the Company. Based on the report of InternalAudit function process owners undertake corrective action in their respective areas andthereby strengthen the controls. All significant audit observations and corrective actionssuggested are presented to the Audit Committee of the Board for review. The internalfinancial controls as laid down are adequate and were operating effectively during theyear under review.

In addition as required under Section 143 of the Act the Statutory Auditors haveevaluated and expressed an opinion on the Company's internal financial controls overfinancial reporting based on the audit for the FY 2018-19. In their opinion the Companyhas in all material respects adequate internal controls over financial reporting andsuch internal financial controls over financial reporting were operating effectively asonMarch312019.


Based on the framework of internal financial control and compliance systems establishedand maintained by the Company work performed by the internal statutory and secretarialauditors including audit of internal financial controls over financial reporting by thestatutory auditor and the reviews performed by the Management and the relevant BoardCommittees including the Audit Committee the Board is of the opinion that the Company'sinternal financial controls were adequate and effective during the financial year 2018-19.

Accordingly pursuant to Section 134(5) of the Act the Board of Directors to the bestof their knowledge and ability confirms that:

a) . In the preparation of the annual accounts for the

year ended March 31 2019 the applicable accounting standards have been followed andthat there are no material departures;

b) . they have selected such accounting policies and

applied them consistently and made judgments and estimates that are reasonable andprudent in order to give a true and fair view of the state of affairs of the Company as atMarch 31 2019 and of the profit of the Company for that period;

c) . they have taken proper and sufficient care to the

best of their knowledge and ability for the maintenance of adequate accounting recordsin accordance within the provisions of the Act for safeguarding the assets of the Companyand for preventing and detecting fraud and other irregularities;

d) . they have prepared the annual accounts for the financial year ended March 31 2019on a going concern basis;

e) . they have laid down internal financial controls for the Company which are adequateand are operating effectively; and

f) . they have devised proper systems to ensure compliance with the provisions of allapplicable laws and such systems are adequate and are operating effectively.


The Board places on record its appreciation of the services rendered by the employeesof the Company during the year under report.

On behalf of the Board of Directors

Dr. Anant Narain Singh


Place : Mumbai

Date : 24th April 2019