Kamat Hotels (India) Ltd.
|BSE: 526668||Sector: Services|
|NSE: KAMATHOTEL||ISIN Code: INE967C01018|
|BSE 00:00 | 17 Jul||64.15||
|NSE 00:00 | 17 Jul||64.20||
|Mkt Cap.(Rs cr)||151|
|Mkt Cap.(Rs cr)||151.27|
Kamat Hotels (India) Ltd. (KAMATHOTEL) - Director Report
Company director report
Your Directors are pleased to present the 30th Annual Report together withthe Audited Financial Statements of the Company for the year ended 31st March2017.
The financial summary for the year under review is as below:
(Rs. in lakhs)
The average occupancy level of The Orchid Mumbai was almost as per last year i.earound 79% . The average occupancy level of VITS Mumbai was around 78%. The Average RoomRate during the year under review was at ' 5883/- at The Orchid Mumbai as compared to' 5553/- in the previous year and at ' 4102/- at VITS Mumbai as compared to ' 3518/-in the previous year.
The total turnover of the Company for the year was recorded at ' 16452.81 Lakhs (ofwhich the turnover of ' 9386.09 lakhs pertains to The Orchid Mumbai ' 3131.04 lakhs toVITS Mumbai and ' 3935.68 lakhs to other units) as against ' 15817.33 lakhs in theprevious year a increase of around 4.03% over the last year. The Company has registered asharp turnaround from loss of ' 8528.27 lakhs to profit after tax of ' 4057.68 lakhs ascompared to the previous year.
MANAGEMENT / FRANCHISEE CONTRACTS
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.
With view to conserve resources of the Company for future operations the Directorshave not recommended any dividend for the Financial Year ended 31st March2017.
During the year under review there was no change in the Authorised or Paid up ShareCapital of the Company. As on 31st March 2017 the Authorised Share Capital ofthe Company was ' 3425 lakhs divided into 34250000 equity shares of ' 10/- eachwhereas the issued subscribed and paid up capital stood at ' 2358.41 lakhs divided into23584058 equity shares of ' 10/- each.
MATERIAL CHANGES AND COMMITMENTS
There have been no material changes and commitment affecting the financial position ofthe Company during the Financial Year 2016-17.
REPORT ON THE PERFORMANCE AND FINANCIAL POSITION OF EACH OF THE SUBSIDIARIESASSOCIATES AND JOINT VENTURE COMPANIES IN TERMS OF RULE 8(1) OF COMPANIES (ACCOUNTS)RULES 2014
In accordance with the provisions of Companies Act 2013 ("the Act") SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 ("ListingRegulations") and Accounting Standard (AS) - 21 on Consolidated Financial Statementthe Audited Consolidated Financial Statement forms part of 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 theSubsidiaries/Associates/Joint Ventures are not attached in this Annual Report. Howeverthe statement containing the salient features which is required to be given in Form AOC -1are provided under note no 37 (page no 121 to 124) to the Consolidated Financial Statementof the Company. Hence not repeated for the sake of brevity. As on 31 March 2017 theCompany had the following Subsidiaries / 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. Green Dot Restaurants Private Limited. (GDRPL)
Joint Venture Company / Associate Company:
Ilex Developers & Resorts Limited (IDRL)
During the year the Company had not sold or liquidated any of itsSubsidiaries/Associates/Joint Ventures and no Subsidiaries/Associates/ Joint Venturesbecame/ ceased to be Subsidiaries/Associates/Joint Ventures of the Company and allSubsidiaries/Associates/Joint Ventures are operative.
DETAILS OF DIRECTORS AND KEY MANAGERIAL PERSONNEL APPOINTED OR RESIGNED DURING THE YEAR
Mr. Bipinchanndra C. Kamdar (DIN 01972386) retires by rotation at the ensuing 30thAnnual General Meeting and being eligible offers himself for re-appointment. The Boardrecommends his re-appointment.
The Company has appointed Mr. S. S. Thakur (DIN 00001466) as an Additional Director inthe category of Non-Executive Independent Director on the Board of the Company w.e.f 24thSeptember 2016. The term of Mr. S. S. Thakur as a Additional Independent Director willexpire on the date of the ensuing 30th Annual General Meeting of the Company.The Company has received a notice in writing along with requisite security deposit underprovisions of Section 160 of the Companies Act 2013 from a member proposing thecandidature of Mr. S. S. Thakur as an Independent Director of the Company. The Noticeconvening the 30th Annual General Meeting contains necessary resolution for hisappointment as an Independent Director of the Company.
During the year under review Mr. Amit Vyas was appointed as Company Secretary of theCompany w.e.f. 24th September 2016 .
Ms. Smita Nanda was appointed as Chief Financial Officer of the Company w.e.f 26thMay 2017.
STATEMENT ON DECLARATION BY INDEPENDENT DIRECTOR:
Each of the Independent Directors of the Company have given their respectivedeclaration as required under Section 149(7) of the Companies Act 2013 to the effect thatthey meet the criteria of independence as provided in Section 149(6) of the Companies Act2013.
FAMILIARISATION PROGRAMMES FOR INDEPENDENT DIRECTORS
The Company constantly endeavors 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' forming part of this AnnualReport.
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. The datesof Board meetings are given in the Corporate Governance section forming part of thisAnnual Report.
DIRECTORS' RESPONSIBILITY STATEMENT
As required by Section 134(3)(c) and 134(5) of the Companies Act 2013 the Directorshereby state that:
1. in the preparation of the annual accounts the applicable accounting standards havebeen followed and that there are no material departures;
2. they have selected accounting policies were applied consistently and madejudgmentsand estimates that are reasonable and prudent so as to give a true and fair view of thestate of affairs of the Company as at 31 March 2017 and of the loss of the Company forthe financial year ended on that date;
3. they have taken proper and sufficient care has been taken for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities to the best of the Directors' knowledge and ability;
4. the annual accounts have been prepared on a going concern basis;
5. Internal Financial Controls to be followed by the Company have been laid down andthe said Internal Financial Controls are adequate and are operating effectively; and
6. proper systems have been devised to ensure compliance with the provisions of allapplicable laws and that such systems are adequate and are operating effectively.
NOMINATION AND REMUNERATION POLICY
In terms of Section 178 (3) of the Act and Listing Regulations a policy on Nominationand Remuneration of Directors and Senior Management Employees including inter aliacriteria for determining qualifications positive attributes independence of directorsand policy on Board diversity was formulated by the Nomination and Remuneration Committeeand has been adopted by the Board of Directors. The said policy is enclosed asAnnexure B'to this Report. The said policy is also made available on the website ofthe Company www.khil.com and its weblink is
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186:
The particulars of Loan given Guarantees given and Investment made by the Companyunder Section 186 of the Companies Act 2013 are given as under:
(Rs. in lakhs)
* Net of provision for diminution made during the year.
However during the year under review no new loans guarantees or investments weremade or provided by the Company.
PARTICIULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTY
All Related Party Transactions entered into during the year were in the Ordinary Courseof Business and on arms' length basis. Omnibus approval is sought from Audit Committee incase of transactions which are repetitive in nature and in ordinary course of business.During the year under review no Material Related Party Transactions i.e. transactionsnot amounting to ten percent or more of the turnover of the Company as per the lastaudited financial Statement were entered by your Company. Since all related partytransactions entered into by the Company were in the ordinary course of business and onarm's length basis disclosure required in Form AOC-2 is not applicable. The Policy onmateriality of related party transactions and on dealing with related party transactionsas approved by the Board may be accessed on the Company's website at its weblink is
STATEMENT OF ANNUAL PERFORMANCE EVALUATION OF BOARD COMMITTEES AND DIRECTORS
Performance evaluation of all the Directors Board as a whole and of its committee isundertaken annually as prescribed under the Act and Listing Regulations.
Separate sets of detailed questionnaires are circulated to all the Directors comprisingvarious different questions in order to assess the quality quantity and efficiency of theBoard Committees and Directors.
Evaluation of Board is broadly based on factors like quality of discussiontransparency and timeliness of the information adhering to good corporate governancepractices etc.
The individual Directors are evaluated on factors like leadership quality attitudeinitiatives and responsibility undertaken decision making commitment and achievementsduring the financial year.
The process of performance evaluation is derived by the consensus of the Board and isas per the Act.
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 25thMay 2016.
The Chairman of the meeting of Independent Directors apprises the Chairman of theCompany regarding the views/concerns if any of Independent Directors.
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 displayed on the website of the Company
COMPOSITION OF AUDIT COMMITTEE
The composition of the Audit Committee as required to be disclosed under Section 177(8)of the Companies Act 2013 is given in Corporate Governance Section forming part of thisAnnual Report. During the year under review there was no instance where the Board has notaccepted any recommendation of the Audit Committee.
The Company has a well- defined Risk Management Policy which helps to identify manageand mitigate business risks. A quarterly review report on compliance with Risk Managementpolicy of the Company is placed before the Audit Committee of the Company.
During the year under review no risk threatening the existence of the Company wasidentified.
DISCLOSURE OF PECUNIARY RELATIONSHIP
There was no pecuniary relationship or transactions of the non-executive directorsvis-a-vis the company during the year. Also no payment except sitting fees was made toany of the non-executive directors of the Company. No convertible instruments are held byany of the nonexecutive directors.
DETAILS OF SHARES ISSUED WITH DIFFERENTIAL VOTING RIGHTS AND SWEAT EQUITIES
During the year under review the company has not issued any shares with differentialvoting rights and sweat equities.
EMPLOYEE STOCK OPTION SCHEME
During the year under review no option under Employee Stock Option Scheme-2013'was granted or vested to any employee or Directors of the Company.
PROVISION OF MONEY BY COMPANY FOR PURCHASE OF ITS OWN SHARES BY EMPLOYEES OR BYTRUSTEES FOR THE BENEFIT OF EMPLOYEES
There was no deposit accepted by the Company within the meaning of Section 73 of theCompanies Act 2013 and Rules made there under at the beginning of the year. During theyear under review the Company has neither invited nor accepted any deposit under Section73 of the Companies Act 2013 and the rules made there under and no deposit was remainingunpaid or unclaimed as at the end of the year.
In terms of the provision of the Section 204 of the Act read with Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Board hadappointed M/s. V. V. Chakradeo & Co. Practising Company Secretaries as theSecretarial Auditor for conducting the Secretarial Audit of your Company for the financialyear ended 31st March 2017.
The Secretarial Audit Report does not contain any qualification reservation or adverseremark. The Secretarial Audit Report issued by M/s. V. V.Chakradeo & Co. PractisingCompany Secretaries is enclosed as Annexure C'of 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 2017
Disclosures with respect to the remuneration of Directors Key Managerial Personnel(KMPs) and employees as required under Section 197(12) of the Act read with Rule 5(1) ofthe Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 are givenin Annexure D' to this Report.
During the year under review there were no employees falling under the criteriaspecified under section 197(12) and rule 5(2) of the of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014. However other information as requiredunder said rule may be obtained by the members by writing to the Company Secretary of yourCompany and is also made available on the Company's website i.e.
PARTICULARS OF CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGEEARNINGS AND OUTGO
a) Conservation of Energy:
(i) the steps taken or impact on conservation of energy;
(ii) the steps taken by the company for utilising alternate sources of energy;
(iii) the capital investment on energy conservation equipments;
The Company continued energy conservation efforts during the year. It has closelymonitored power consumption and running hours on day to day basis thus resulting inoptimum utilization of energy. The hotels are fitted with energy saving devices toconserve energy in the long run.
b) Technology Absorption:
(i) the efforts made towards technology absorption : The activities of the Company atpresent do not involve technology absorption and research and development.
(ii) the benefits derived like product improvement cost reduction product developmentor import substitution; N.A.
(iii) in case of imported technology (imported during the last three years reckonedfrom the beginning of the financial year)-
(a) the details of technology imported; N.A.
(b) the year of import; N.A.
(c) whether the technology been fully absorbed; N.A.
(d) if not fully absorbed areas where absorption has not taken place and the reasonsthereof; N.A. and
(iv) the expenditure incurred on Research and Development. N.A.
The activities of the Company at present do not involve technology absorption andresearch and development.
c) Foreign exchange earnings and outgo:
Earnings: ' 1949.08 Lakhs (Previous Year ' 1507.74 Lakhs)
Utilization (including import of capital goods): ' 269.93 Lakhs (Previous Year ' 401.61Lakhs)
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 period under review no order had been passed by the regulators/ courts ortribunals which shall have an impact on the going concern status of the company and itsoperations.
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 fulfill 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. However theprovisions of Section 135(1) and 135(5) of the Companies Act 2013 regarding constitutionof Corporate Social Responsibility (CSR) Committee and spending of at least 2% of averagenet profit are not applicable to the Company. The Company has however been actively andconstantly undertaking several initiatives voluntarily towards its corporate socialresponsibility in the field of environment.
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. TheCompany is committed towards its social responsibility and endeavors the upliftment of thesociety.
Disclosures of Corporate Social Responsibility (CSR) activities of the Company aregiven in 'Annexure E'forming part of this Annual Report.
As per Schedule V of the Listing Regulations a separate section on CorporateGovernance Report together with a certificate from the Company's Auditors confirmingcompliance and Management Discussion Analysis are given in 'Annexures F G and H'formingpart of this Annual Report.
IMPLEMENTATION OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITION ANDREDRESSAL) ACT 2013
The Company has constituted Internal Complaints Committee at all the units of theCompany under the Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013. During the year under review no instance of Sexual Harassment ofWomen under the said Act has been reported in any of the units of the Company.
The term of M/s. J.G. Verma & Co. Chartered Accountants (FRN: 111381W) wasappointed as the Statutory Auditors of the Company at 27th Annual GeneralMeeting ('AGM') held on 10th September 2014. In terms of Section 139 of theAct read with Rule 6 Companies (Audit and Auditors) Rules 2014 the tenure of StatutoryAuditors expires at conclusion of 30th AGM.
Accordingly the Board on the recommendation of the Audit Committee has approved andrecommended to the shareholders the appointment of M/s. N. A. Shah Associates LLPChartered Accountants (FRN: 116560W/W100149) Mumbai as the Statutory Auditors of theCompany for a term of five consecutive years from the conclusion of this AGM till theconclusion of Thirty Fifth AGM of the Company (subject to ratification of theirappointment at every AGM).
The Company has received a certificate from M/s. N. A. Shah Associates LLP CharteredAccountants (FRN: 116560W/W100149) to the effect that their appointment if made shallbe in compliance with the provisions of Section 139 and 141 of the Companies Act 2013 andother applicable provisions of Listing Regulations.
The Members are requested to appoint of M/s. N. A. Shah Associates LLP CharteredAccountants as Statutory Auditors of the Company in place of the retiring Auditors M/s.J.G. Verma & Co. Chartered Accountants at the ensuing AGM for a period of fiveconsecutive years from the conclusion of the ensuing Annual General Meeting till theconclusion of the Thirty Fifth AGM and fix their remuneration.
The Auditors' Report is unmodified i.e. it does not contain any qualificationsreservations or adverse remarks except emphasis of matter at point no. 12 & 3 of thereport. The explanation of the Board on the emphasis of matter is given further in thisreport.
PENALTIES & DEFAULTS
a) During the year the Board meeting was scheduled to be held on 14thFebruary 2017. However due to non-availability of quorum the meeting had to beadjourned to 21st February 2017. This attracted a penalty of ' 70000/- ('35000/- each) by Bombay Stock Exchange and National Stock Exchange (collective referredto as Stock Exchanges') for non-compliance of Regulation 33 of the ListingRegulations. The Company has paid the same.
b) The Company has defaulted in payment of interest and installment of principal amounton various credit facilities to Bank and Financial Institutions.
EXPLANATION AND COMMENTS ON EMPHASIS MADE BY SECRETARIAL AUDITOR/ STATUTORY AUDITORS
The Company has made an application to the Central Government for making payment to Dr.Vithal V. Kamat Executive Chairman and Managing Director for the period from 1stOctober 2016 to 31st March 2017 of ' 48 lakhs. The said applications ispending with the Central Government.
The meeting of Board of Directors was originally scheduled to be held on 14thFebruary 2017 for approving the unaudited quarterly financial results of the Company.However due to want of quorum the meeting was adjourned to 21st February2017 which attracted the penalty from the Stock Exchanges. However the Management istaking various steps for avoiding such instances in future.
Due to sudden demise of Mr. G.N. Shenoy on 5th June 2016 the previousChief Financial Officer (CFO) of the Company the Management immediately initiated theprocess of recruiting the high caliber individual for occupying the office CFO. Since theresponsibilities handled by Late Mr. G.N. Shenoy were wide and complex and alsoconsidering the financial position of the Company the Management was striving to receivethe right candidature for the said position and subsequently w.e.f. 26th May2017 new CFO was appointed. Thus this resulted into a delay which was unintentional.
With regard to default in payment of interest and installment of principal amount themanagement is implementing various measures for avoidance of such defaults. PresentlyCompany is regular in payment of interest and installment of principal amounts to lenderswith whom the Company has arrived at Settelment/ OTS arrangements.
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.
For and on behalf of Board of Directors
of KAMAT HOTELS (INDIA) LIMITED
Dr. Vithal V. Kamat
Executive Chairman and Managing Director
Place : Mumbai
Date : 14th July 2017