Kamat Hotels (India) Ltd.
|BSE: 526668||Sector: Services|
|NSE: KAMATHOTEL||ISIN Code: INE967C01018|
|BSE 10:45 | 21 Jan||47.30||
|NSE 10:34 | 21 Jan||47.60||
|Mkt Cap.(Rs cr)||112|
|Mkt Cap.(Rs cr)||111.53|
Kamat Hotels (India) Ltd. (KAMATHOTEL) - Director Report
Company director report
Your Directors are pleased to present the 31st Annual Report together withthe Audited Financial Statements (Standalone and Consolidated) of the Company for thefinancial year ended 31st March 2018.
The financial summary for the year under review is as below:
(Rupees in lakhs)
The average occupancy level of The Orchid Mumbai was around 80%. The averageoccupancy level of VITS Mumbai was around 74%. The Average Room Rate during the yearunder review was at ' 5869/- at The Orchid Mumbai as compared to '5883/- in the previous year and at ' 4325/- at VITS Mumbai as compared to' 4102/- in the previous year.
FIRST-TIME ADOPTION OF IND AS
The financial statements for the year ended 31st March 2018 are the firstfinancial statements of the Company has prepared in accordance with Ind AS. For periodsupto and including the year ended 31st March 2017 the Company prepared itsfinancial statements in accordance with accounting standards notified under section 133 ofthe Companies Act 2013 read together with paragraph 7 of the Companies (Accounts) Rules2014 ("Indian GAAP" or "previous GAAP").
Accordingly the Company has prepared financial statements which comply with Ind ASapplicable for periods ending on 31st March 2018 together with the comparative perioddata as at and for the year ended 31st March 2017. In preparing thesefinancial statements the Company's opening balance sheet was prepared as at 1stApril 2016 the Company's date of transition to Ind AS.
The total revenue from operations of the Company for the year was recorded at '16852.23 Lakhs (of which the turnover of ' 10016.66 lakhs pertains to TheOrchid Mumbai ' 3361.10 lakhs pertains to VITS Mumbai and '3474.47 lakhs pertains to other units) as against '15466.91 lakhs in the previous yeara increase of around 8.96% over the last year. The Company's profit after tax is '3789.03 lakhs as compared to ' 3817.95 lakhs of previous year.
MANAGEMENT / FRANCHISEE CONTRACTS / OTHERS:
During the year under review the agreements entered for Management of the Orchid HotelPune and VITS Bhubaneswar continued. Also the arrangement under Business ContractAgreement for operation of Mahodadhi Palace continued.
During the year under review the Hon'ble Supreme Court of India had dismissed theSpecial Leave Petition filed by Royal Orchid Hotels Limited and also refused to leaveappeal for using of the word "Orchid" and recognized that the Company is priorused of the word "Orchid".
With view to conserve resources of the Company for future operations the Directorshave not recommended any dividend for the Financial Year ended 31st March2018.
TRANSFER TO RESERVES:
The Company has not transferred any amount to the General Reserve for the financialyear ended 31st March 2018.
During the year under review there was no change in the Authorised or Paid up ShareCapital of the Company. As on 31st March 2018 the Authorised Share Capital ofthe Company was ' 3425.00 lakhs divided into 34250000 equity shares of '10/- each whereas the issued subscribed and paid up capital stood at '2358.40 lakhs divided into 23584058 equity shares of ' 10/- each.
MATERIAL CHANGES AND COMMITMENTS:
There have been no material changes and commitments affecting the financial position ofthe Company between the end of the financial year and date of this report. There has beenno change in the nature of business of the Company.
REPORT ON THE PERFORMANCE AND FINANCIAL POSITION OF EACH OF THE SUBSIDIARIESASSOCIATES AND JOINT VENTURE COMPANIES IN TERMS OF RULE 8(1) OF COMPANIES (ACCOUNTS)RULES 2014:
In accordance with the provisions of the Companies ("the Act") SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 ("ListingRegulations") and Ind AS 110 the Audited Consolidated Financial Statement forms partof the Annual Report.
A copy of Audited Financial Statements of the Subsidiaries/Associates/Joint Venturesshall be made available for inspection at the Registered Office of the Company duringbusiness hours. Any shareholder interested in obtaining a copy of separate FinancialStatement of the Subsidiaries/ Associates/Joint Ventures shall make specific request inwriting to the Corporate Secretarial Department of the Company.
The Audited Financial Statements of the Subsidiaries/ Associates/Joint Ventures arealso available on the website of the Company. In view of this the Balance SheetStatement of Profit and Loss and other related documents of the Subsidiaries/ Associates/Joint Ventures are not attached in this Annual Report. However the statement containingthe salient features which is required to be given in Form AOC -1 are provided in page no.163 to the Consolidated Financial Statement of the Company hence not repeated for thesake of brevity. As on 31st March 2018 the Company had the followingSubsidiaries / Joint ventures / Associate Company:
1. Orchid Hotels Pune Private Limited (OHPPL)
2. Mahodadhi Palace Private Limited (MPPL) (Formerly known as Fort MahodadhinivasPalace Private Limited)
3. Kamats Restaurants (India) Private Limited (KRIPL)
4. Fort Jadhavgadh Hotels Private Limited (FJHPL)
5. Orchid Hotels Eastern (I) Private Limited (Formerly known as Green Dot RestaurantsPrivate Limited)
JOINT VENTURE COMPANY / ASSOCIATE COMPANY:
Ilex Developers & Resorts Limited (IDRL)
During the year the Company had not sold or liquidated any of its Subsidiaries /Associates /Joint Ventures and no Subsidiaries/Associates/ Joint Ventures became/ ceasedto be Subsidiaries/Associates/Joint Ventures of the Company and allSubsidiaries/Associates/Joint Ventures are operative.
The Directors state that applicable Secretarial Standards i.e. SS-1 and SS-2 relatingto Meetings of the Board of Directors' and General Meetings' respectivelyhave been duly followed by the Company.
DETAILS OF DIRECTORS AND KEY MANAGERIAL PERSONNEL APPOINTED OR RESIGNED DURING THEYEAR:
In accordance with the provisions of the Act and the Articles of Association of theCompany Mr. Bipinchandra C. Kamdar (DIN 01972386) Director of the Company retire byrotation at the ensuing Annual General Meeting. By the Notification dated 9thMay 2018 Securities and Exchange Board of India ("SEBI") amended the ListingRegulations 2015 by incorporating Regulation 17(1A) in the Listing Regulations 2015 tobe effective from 1st April 2019. According to the said Regulation no listedcompany shall appoint or continue the directorship of a person who has attained age of 75years unless special resolution is passed to that effect. Mr. Bipinchandra C. Kamdar is 89years as on date and therefore a special resolution is proposed in ensuing Annual GeneralMeeting for continuation of holding office of Non- Executive Director of the Company byMr. Bipinchandra C. Kamdar who will be above the age of 75 years as on 1stApril 2019 to comply with the above amendment.
Similarly Mr. S. S. Thakur have also attained the age of more than 75 years.Therefore it is proposed to pass special resolutions at the ensuing AGM of the Company.Necessary resolutions for re-appointment/continuation of Directorship past the age of 75years of aforesaid Directors have been included in the notice of the ensuing AGM andrequisite details have been provided in the explanatory statement of the notice. The Boardrecommends their re-appointment/ continuation as Directors of the Company.
The term of office of Mr. Dinkar D. Jadhav (DIN 01809881) expired on 31stMarch 2018 and the term of office of Ms. Himali H. Mehta (DIN 07037244) will expire on 31stMarch 2019 as Independent Directors. The Board of Directors on recommendation of theNomination and Remuneration Committee has recommended re-appointment of Mr. Dinkar D.Jadhav and Ms. Himali H. Mehta as Independent Directors of the Company for a second termof 5 (five) consecutive years on the expiry of their current term of office.
The Company has received declarations from all the Independent Directors of the Companyconfirming that they meet the criteria of independence prescribed under the Act and theListing Regulations.
During the year Mrs. Smita Nanda was appointed as Chief Financial Officer of theCompany w.e.f. 26th May 2017 and apart from this there is no change in theposition of other KMPs/ Directors of the Company.
FAMILIARISATION PROGRAMMES FOR INDEPENDENT DIRECTORS:
The Company constantly endeavours to familiarize its Independent Director on thefunctioning of the Company so that they are aware of the functions of the Company andtheir expertise can be utilized for the good of the Company. In this view the Company hasconducted Familiarisation Programmes to familiarize the Independent Directors of theCompany. Details of the same are disclosed on the website of the Company and the weblinkof the same is http://www.khil.com/investors/policies.html
EXTRACT OF ANNUAL RETURN:
An extract of Annual Return in Form MGT-9 as provided under sub-section (3) of Section92 of the Companies Act 2013 is enclosed as "Annexure A" formingpart of this Annual Report.
NUMBER OF MEETINGS OF THE BOARD:
During the financial year under review five meetings of the Board of Directors wereheld. The intervening gap between two Board meetings was not more than 120 days. Theparticulars of meetings held and attended by each Director are detailed in the CorporateGovernance Report which forms part of this Report.
DIRECTORS' RESPONSIBILITY STATEMENT:
Your Directors state that:
1. in the preparation of the annual accounts for the year ended 31st March2018 the applicable accounting standards read with requirements set out under ScheduleIII to the Act have been followed and that there are no material departures from the same;
2. they have selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the Company as at 31st March 2018 and of the profitof the Company for the financial year ended on that date;
3. they have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;
4. the annual accounts have been prepared on a going concern basis;
5. the Directors have laid down Internal Financial Controls to be followed by theCompany and that such Internal Financial Controls are adequate and are operatingeffectively; and
6. proper systems have been devised to ensure compliance with the provisions of allapplicable laws and that such systems are adequate and are operating effectively.
NOMINATION AND REMUNERATION POLICY:
In terms of Section 178 (3) of the Companies Act 2013 and Listing Regulations apolicy on Nomination and Remuneration of Directors and Senior Management Employeesincluding inter alia criteria for determining qualifications positive attributesindependence of directors and policy on Board diversity was formulated by the Nominationand Remuneration Committee and has been adopted by the Board of Directors. The said policyis enclosed as "Annexure B" to this Report. The said policy isalso made available on the website of the Company www.khil.com and its weblink is http://www.khil.com/investors/policies.html
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186:
Particulars of loans given guarantees given Investments made and securities providedby the Company under Section 186 of the Companies Act 2013 are given as under:
(' In lakhs)
However during the year under review no new loans guarantees or investments weremade or provided by the Company.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTY:
In line with the requirements of the Companies Act 2013 and Listing Regulations yourCompany has formulated a Policy on Related Party Transactions which is also available onCompany's website at www.khil.com/policies . The Policy intends to ensure that properreporting approval and disclosure processes are in place for all transactions between theCompany and Related Parties. All transactions entered by the Company with Related Partieswere in ordinary course of business and at arm's length basis.
The Audit Committee has granted omnibus approval for the transactions (which arerepetitive in nature) and the same was reviewed by the Audit Committee and Board ofDirectors.
There was no materially significant transaction with related parties during theFinancial Year 2017-18 and none of the transactions with any of related parties were inconflict with the Company's interest. Particulars of contracts/ arrangements with relatedparties as referred to in subsection (1) of section 188 of the Companies Act 2013 andLODR are given in Form AOC 2 and the same is annexed as "Annexure C"hereto and forms a part of this report.
Suitable disclosure as required under AS-18/Ind-AS-24 has been made in Notes to theFinancial Statements.
STATEMENT OF ANNUAL PERFORMANCE EVALUATION OF BOARD COMMITTEES AND DIRECTORS:
The Company has established the procedure for performance evaluation of the BoardCommittees and other individual Directors (including Independent Directors) which includecriteria for performance evaluation of Non-executive Directors and Executive Directors.The performance evaluation process inter-alia considers attendance of Directors at Boardand Committee Meetings acquaintance with business communication inter se board memberseffective participation domain knowledge compliance with code of conduct vision andstrategy.
The Board carried out an annual performance evaluation of the Board CommitteeIndividual Directors and the Chairperson. The Chairman of the respective Committees sharedthe report on evaluation with the respective Committee members. The performance of eachCommittee was evaluated by the Board based on evaluation report received from respectiveCommittees.
The report on performance evaluation of the individual Directors was reviewed by theChairman of the Board and feedback was given to Directors.
MEETING OF INDEPENDENT DIRECTORS :
The Meeting of Independent Directors was conducted in an informal and flexible mannerto enable the Independent Directors to discuss matters pertaining to inter alia review ofperformance of Non-Independent Directors and the Board as a whole review the performanceof the Executive Chairman of the Company (taking into account the views of the Executiveand Non- Executive Directors) review the performance of the Company assess the qualityquantity and timeliness of flow of information between the Company Management and theBoard which is necessary for the Board to effectively and reasonably perform their duties.
The meeting of Independent Directors for the Financial Year under review was held on 26thMay 2017.
The Chairman of the meeting of Independent Directors apprises the Chairman of theCompany regarding the views/concerns if any of Independent Directors.
VIGIL MECHANISM :
The Company has established a Vigil Mechanism for Directors and employees to reportgenuine concerns. The Vigil Mechanism enable the Directors employees and all stakeholdersof the Company to report genuine concerns and provides for adequate safeguards againstvictimization of person who use Vigil Mechanism and also makes provision for direct accessto the Chairman of the Audit Committee.
The detail of Vigil Mechanism is put on the Company's website and can be accessed atwww.khil.com and its weblink is http://www.khil.com/ investors/policies.html
AUDIT COMMITTEE :
The composition of the Audit Committee as required to be disclosed under Section 177(8)of the Companies Act 2013 is given in Corporate Governance report which forms part ofthis Annual Report. During the year under review all the recommendation made by the AuditCommittee were accepted by the Board.
RISK MANAGEMENT :
Your Company has a well defined Risk Management framework which is designed to enablerisk to be identified assessed and mitigated appropriately. A quarterly review report oncompliance with Risk Management framework of the Company is placed before the AuditCommittee of the Company.
During the year under review no risk threatening the existence of the Company wasidentified.
DISCLOSURE OF PECUNIARY RELATIONSHIP :
During the year there was no pecuniary relationship or transactions betweennon-executive directors and the company. No payment except sitting fees was given tonon-executive directors of the Company. No convertible instruments are held by any of thenon-executive directors.
DETAILS OF SHARES ISSUED WITH DIFFERENTIAL VOTING RIGHTS AND SWEAT EQUITIES :
During the year under review the company has not issued any shares with differentialvoting rights as to dividend voting or otherwise and sweat equity shares.
EMPLOYEE STOCK OPTION SCHEME:
During the year under review no option was granted or vested to any employee orDirectors of the Company.
PROVISION OF MONEY BY COMPANY FOR PURCHASE OF ITS OWN SHARES BY EMPLOYEES OR BYTRUSTEES FOR THE BENEFIT OF EMPLOYEES :
The Company does not have any scheme of provision of money for the purchase of its ownshares by employees or by trustee for the benefit of employees.
The Company did not accept any deposits within the meaning of Section 73 of theCompanies Act 2013 and Rules made there under at the beginning of the year. During theyear under review the Company has neither invited nor accepted any deposit under Section73 of the Companies Act 2013 and the rules made there under and no deposit was remainingunpaid or unclaimed as at the end of the year.
SECRETARIAL AUDITOR :
In terms of the provision of the Section 204 of the Companies Act 2013 read withCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 the Boardhad appointed M/s. V. V. Chakradeo & Co. Practising Company Secretaries to conductthe Secretarial Audit for the financial year ended 31st March 2018.
The Secretarial Audit Report for the Financial Year ended 31st March 2018issued by M/s. V. V.Chakradeo & Co. Practising Company Secretaries is annexedherewith marked as "Annexure D"to this Annual Report.
DETAILS AS PER SECTION 197(12) READ WITH RULE 5 OF COMPANIES (APPOINTMENT ANDREMUNERATION OF MANAGERIAL PERSONNEL) RULES 2014 AND FORMING PART OF THE BOARD'S REPORTFOR THE YEAR ENDED 31st MARCH 2018 :
Disclosures relating to remuneration of Directors Key Managerial Personnel (KMPs) andemployees as required under Section 197(12) of the Act read with Rule 5(1) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 are given in "AnnexureE" to this Report.
During the year under review there were no employees falling under the criteriaspecified under section 197(12) of the Companies Act 2013 and rule 5(2) of the of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014. Howeverother information as required under said rule may be obtained by the members by writing tothe Company Secretary of your Company and the same be furnished on request and is alsomade available on the Company's website i.e.www.khil.com .
PARTICULARS OF CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGEEARNINGS AND OUTGO:
Conservation of Energy:
(i) the steps taken or impact on conservation of energy;
(ii) the steps taken by the company for utilising alternate sources of energy;
(iii) the capital investment on energy conservation equipments;
The Company continued energy conservation efforts during the year. It has closelymonitored power consumption and running hours on day to day basis thus resulting inoptimum utilization of energy. The hotels are fitted with energy saving devices toconserve energy in the long run.
a) Technology Absorption:
(i) the efforts made towards technology absorption : The activities of the Company atpresent do not involve technology absorption and research and development.
(ii) the benefits derived like product improvement cost reduction product developmentor import substitution; N.A.
(iii) in case of imported technology (imported during the last three years reckonedfrom the beginning of the financial year)
(a) the details of technology imported; N.A.
(b) the year of import; N.A.
(c) whether the technology been fully absorbed; N.A.
(d) if not fully absorbed areas where absorption has not taken place and the reasonsthereof; N.A. and
(e) the expenditure incurred on Research and Development. N.A.
The activities of the Company at present do not involve technology absorption andresearch and development.
b) Foreign exchange earnings and outgo:
Earnings: ' 2012.80 Lakhs (Previous Year ' 1949.08 Lakhs)
Utilization (including import of capital goods): ' 180.34 Lakhs (Previous Year ' 269.93Lakhs)
DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS ORTRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE:
During the year under review no significant or material orders were by passed by theregulators or courts or tribunals which impact going concern status of the company and itsoperations in future.
DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THEFINANCIAL STATEMENT:
Your Directors have devised a framework for Internal Financial Controls as per therequirements of Section 134(5)(e) of the Companies Act 2013 and incorporates measuresthat ensure adequate and continuing operating effectiveness of internal financialcontrols.
Furthermore in accordance with Section 149(8) read with the Code for IndependentDirectors laid down under Schedule IV Clause II (4) of the Companies Act 2013 theIndependent Directors have satisfied themselves on the integrity of financial informationand have ensured that Financial Controls and systems are robust and secure.
In order to enable the Directors to meet these responsibilities the Board has devisedthe necessary systems frameworks and mechanisms within the Company. The Board hasempowered the Audit Committee to periodically review and confirm that the mechanismremains effective and fulfil the objectives for which they have been created.
DISCLOSURES RELATING TO UNCLAIMED SUSPENSE ACCOUNT AS PER REGULATION 34(3) READ WITHSCHEDULE V(F) OF THE SEBI (LISTING OBLIGATIONS AND DISCLOSURE REQUIREMENTS) REGULATION2015:
The voting rights on the shares in unclaimed suspense account shall remain frozen tillthe rightful owner of such shares claims the shares.
CORPORATE SOCIAL RESPONSIBILITY :
The Company understands the importance of the society in smooth functioning of thebusiness. Thus to acknowledge the constant support provided by the society the Companyinvolves itself in different corporate social responsibility activities.
The details of CSR Expenditure are given in the prescribed format and forms part ofthis Report as the same is annexed as "Annexure F". The company continuesto actively support deserving social causes for improvement and upliftment of varioussections of the society as has been its practice for past several years.
However the provisions of Section 135(1) and 135(5) of the companies Act 2013regarding spending of at least 2% of average net profit are not applicable to the Companysince its average net profit is negative. The Company is however been actively andconstantly undertaking several initiatives voluntarily towards its social responsibilityand endeavours the field of environment and the upliftment of the society.
The CSR Committee on the continuous basis manifests the activities through which it canhave positive impact on the society and be beneficial for larger good of the people.
MANAGEMENT DISCUSSION AND ANALYSIS :
Management's Discussion and Analysis Report for the year under review as stipulatedunder the Securities and Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulations 2015 ("Listing Regulations") is given as "AnnexureG".
CORPORATE GOVERNANCE :
The Company is committed to maintain the highest standards of Corporate Governance andadhere to the Corporate Governance requirements set out by the Securities and ExchangeBoard of India (SEBI). The Report of Corporate Governance as stipulated under the ListingRegulations is annexed as "Annexure H". The requisite Certificate fromthe M/s. Kaushik Joshi & Co. Practicing Company Secretaries confirming compliance withthe conditions of Corporate Governance is attached to the report on Corporate Governance.
IMPLEMENTATION OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITION ANDREDRESSAL) ACT 2013 :
The Company has constituted Internal Complaints Committee at all the units of theCompany under the Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013. During the year under review no instance of Sexual Harassment ofWomen under the said Act has been reported in any of the units of the Company.
STATUTORY AUDITORS :
M/s. N. A. Shah Associates LLP Chartered Accountants Mumbai were appointed asStatutory Auditors of your Company at the Annual General Meeting held on 22ndSeptember 2017 for a term of five consecutive years. As per the provisions of Section 139of the Companies Act 2013 the appointment of Auditors is require d to be ratified byMembers at every Annual General Meeting. In accordance with the Companies (Amendment) Act2017 enforced on 7th May 2018 by the Ministry of Corporate Affairs theappointment of Statutory Auditors is not required to be ratified at every Annual GeneralMeeting.
EXPLANATION ON QUALIFICATION MADE BY STATUTORY AUDITORS / SECRETARIAL AUDITOR:
With regard to qualification as mentioned in Consolidated Independent StatutoryAuditors' Report 4(a) and (b) of Auditor's report the Board states that in respect ofbank guarantee invoked by the bank in earlier years Company had applied for waiver ofinterest liability amounting to ' 134 Lakhs (including for the year ended31st March 2018 of ' 25.59 Lakhs) payable on the total amount of bankguarantee by the bank and therefore the same is not accounted in the books of account.
Further during the current year the lender i.e. Asset Reconstruction Company IndiaLimited (ARCIL) has initiated the process of recovery of its dues by inviting expressionof interest for selling the Company. The offers received are under consideration andnegotiations are at advanced stage. In the opinion of management based on offersreceived the expected one-time settlement value would be lower than principal andinterest liability already accounted upto 30th September 2013 and hence nofurther interest liability is required to be accounted for the period 1st October2013 to 31st March 2018.
EMPLOYEE RELATIONS :
The Management realizes the role and importance of its employees for growth of thebusiness. Therefore the Company continuously strive to maintain cordial relationship withits employees. They are also given opportunities to rise and have impact on the working ofthe Company.
The Directors place on record their appreciation for the sincere and whole heartedco-operation extended by all concerned particularly Company's Bankers FinancialInstitutions Asset Reconstruction Companies Security Trustees Stock ExchangesDepartment of Tourism Municipal authorities the Government of Maharashtra Goa andOdhisa the Central Government Suppliers Clientele and the employees of the Company andlook forward to their continued support. The Directors also thank the shareholders forcontinuing their support and confidence in the Company and its management.
By Order of the Board of Directors of KAMAT HOTELS (INDIA) LIMITED
Dr. Vithal V. Kamat
Place: Mumbai DIN 00195341
Date: 29th June 2018
Executive Chairman and Managing Director