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Mac Charles (India) Ltd.
|BSE: 507836||Sector: Services|
|NSE: N.A.||ISIN Code: INE435D01014|
|BSE 00:00 | 23 Apr||295.00||
|NSE 05:30 | 01 Jan||Mac Charles (India) Ltd|
|Mkt Cap.(Rs cr)||386|
|Mkt Cap.(Rs cr)||386.45|
Mac Charles (India) Ltd. (MACCHARLESI) - Director Report
Company director report
Your Directors have pleasure in presenting the 38th Annual Report ofthe Company together with the Audited Statement of Accounts for the year ended 31st March2018.
TRANSFER TO RESERVES
During the financial year 2017-18 an amount of Rs.30/- millions
(Rs.50/- millions last year) has been transferred to General Reserveout of amount available for appropriations.
The Board is happy to inform that during the financial year 2017-18 theoverall revenue of the hotel was higher and with higher cost the Company tried its bestto show comparatively lower operating performance which has been highlighted above and inthe Management Discussion & Analysis Report.
Duringthefinancial year 2017-18 the total revenue of the company hasincreased to Rs.836/- millions as compared to Rs.800/- millions in the previous year. Theprofit after tax for millions during the financial year 2017-18 as compared to Rs.292/-millions during financial year 2016-17. This decrease has been mainly because of higherexpenditure mainly employee costs and interest cost during the financial year. On thewhole the overall performance for the year has been lower. The Company has been able toretain market share through conference on business summits out-door catering andcontinuing in its leading position in wedding related business in the city. Thisperformance has been achieved despite new entrants into the hospitality businessexpansion in the existing ones and liquar ban for 4 months. As a result during the yearnew supply as especially in our neighborhood has hit the market with increased inventoryof rooms thereby reflecting an increase of
40% of inventory in the 5 star and 5-star deluxe segments in the city.To make the matter worse there has been acute competition due to variable discountfactors offered by many of the members of the hotel industry.
The future of the hotel industry is showing encouraging trend of higheroccupancy but tariffs are not-going up due to competition and cost cutting measureinitiated by the corporate companies in the competitive economy prevailing worldwide.Further availability of video conferencing and convenient airline facility are enablingthe business traveler to skip room bookings. In addition there is a substantial increasein supply side of the five-star hotels in Bengaluru especially in the neighborhoodresulting in lower occupancy and undercutting of rates. The liquor sale has been banned asthe Hotel is situated on the National Highway which has since been lifted in thefinancial year under report. However the Company is striving hard to get more businessthrough various marketing initiatives.
During the year under report the financial position of the Company hasbeen strengthened despite the moderate increase in overall costs. The Company'sdiversification into electricity generation through Wind Turbine Generators and othersources of income from investments have helped pushing up the bottom-line and the
Company is able to show reasonable netprofit after income tax. Thesegment performance is furnished elsewhere in the Annual Report.
Your Directors have recommended the dividend of Rs.10/- per EquityShare for the financial year ended March 31 2018.
FOREIGN EXCHANGE EARNINGS AND OUTGO
Foreign Exchange Earnings during the year were Rs.144 million which is28% of the Hotel Sales Turnover. The Foreign Exchange utilization during the year wasRs.20 million.
The Company has one subsidiary namely Airport Golfview Hotels &Suites Pvt. Ltd. Kochi a wholly owned and a non-material non- listed Indian Subsidiary.
In terms of proviso to sub section (3) of Section 129 of the Companies
Act 2013 a report on the performance and financial position of thesubsidiary of the Company is set out in the prescribed Form AOC-1yearisRs.211/-whichforms a part of the Consolidated Financial Statements.
During the year under report the Company has entered into LeaseRental Discounting arrangement with HDFC Bank Ltd for its borrowing facilities. TheCompany was sanctioned borrowing facilities aggregating to Rs.1240/- millions fromthe
HDFC Bank Ltd. The outstanding debt as on March 31 2018 was 1240/-millions. The above borrowing is within the powers of the Board of Directors of theCompany.
DUES TO SMALL SCALE UNDERTAKINGS
There are no dues payable to small scale undertakings.
Members are aware that the Corporate Governance code has become astatutory requirement as per listing regulations framed by the Stock Exchanges/SEBI.Members will be happy to know that their Company is complying with the stipulations of thenew regulations as on date. In line with this requirement a Corporate Governance Reportsand a Management Discussion and Analysis Report of the Company is furnished elsewhere inthis Annual Report.
Conservation of energy continues to be on top priority of themanagement. The information on energy conservation is detailed herein below. a) During theyear under report the Company has generated about 20 millions of units' green power whichis being utilized partially for captive consumption of the Hotel & group company andthe balance units generated is being sold to Govt. of Karnataka / third party consumers.b) An effective key-tag system is in vogue in all guest rooms to switch off lights &power connections automatically. c) Substantially switched over to LED lamps fromconventional lamps with a view to saving energy up to 60% on lighting. d) Installed solarpanels which are feeding hot water required for the guest rooms. e) Imported and installedthree highly fuel-efficient screw chillers for our AC plant. f) Replaced window withdouble glazed reflectiveglass with a view to save power on AC consumption. g) Installedtwo on load tap charger transformers for stabilizing voltage damage to electric motors andother installations. h) Thermostatic Controls Timers and Photo Cell Switches have beeninstalled wherever necessary to control power consumption. i) Imported and installed twotemperature control systems to reduce power consumption. j) Constituted an energyconservation committee to monitor power consumption regularly.
In the opinion of the Board the required particulars pertaining totechnology absorption are not applicable as hotel forms part of the service industry andthe Company does not have any significant manufacturing operations. However themanagement has been adopting the latest technology like LCD TV systems high speedinternet installed in all the guest rooms latest high-speed computers modern guestamenities best audio-video equipment newest model transport vehicles for complimentarytransport of hotel guests video conferencing facility latest models of sound freefridges in guest rooms and various latest hotel operational equipments. Further the Hotelhas been conforming to the stringent Marriott International Standards.
DIRECTORSAND KEY MANAGERIALPERSONNEL
Mr. Ramakrishnan P.R and Mr. Aditya Virwani have been appointed asNon-Executive Directors at the AGM held on 25.09.2017. Mr. M.R.B. Punja IndependentDirector resigned from the Board / Audit Committee on 20.11.2017 and the Board took onrecord its appreciation for valuable services rendered by him to the Company. In hisplace Mr. Suresh Vaswani is proposed to be apppointed as an independent Director at theensuing AGM. The Company has received declarations from all the Independent
Directors of the Company confirming that they meet the criteria ofindependence as prescribed under Section 149(6) of the Companies Act 2013 and SEBI andStock Exchange regulations
The Board of Directors has carried out an annual evaluation of its ownperformance Board committees and individual directors pursuant to the provisions of theCompanies Act 2013 and corporate governance requirements as prescribed by SEBI/BSE. Theperformance of the Board was evaluated by the Board based on the criteria such as theBoard composition and structure effectiveness of Board process information andfunctioning etc. The performance of the committees was evaluated by the Board based on thecriteria such as the composition of the committee's effectiveness of committee meetingsetc. The Board and Nomination and Remuneration Committee reviewed the performance of theindividual directors based on the criteria such as the contribution of individual directorto the Board and committee meetings like preparedness on the issue to be discussedmeaningful and constructive contribution and inputs in meetings etc. In a separatemeeting of independent directors performance of non-independent directors performance ofthe Board and performance of Chairman was evaluated. and thereby to save power and prevent
A diverse Board enables efficient functioning through differences inperspective and skill and fosters differentiated thought processes at the back of variedindustrial and management expertise gender knowledge and geographical background. YourBoard recognizes the importance of a diverse composition and has adopted a Board DiversityPolicy which sets out the approach to diversity. The Board diversity policy is availableon our website maccharlesindia.com
NOMINATION & REMUNERATION POLICY
The Board of Directors on the recommendation of the Nomination
& Remuneration Committee framed a policy for selection andappointment of Directors Key Managerial Personnel Senior
Management and their remuneration as required under Section 178 of theCompanies Act 2013. The Nomination & Remuneration Policy of the Company is annexed tothis Report.
NOMINATION & REMUNERATION COMMITTEE
Nomination and Remuneration Committee consists of the followingdirectors namely Mr. C.B. Pardhanani Chairman and Mr. P.B. Appiah Independent Directorand Ms. Tanya Girdhar Independent Director. Brief description of terms of reference:
- Identifying persons who are qualified to become directors and
- Carry on the evaluation of every director's performance;
- Formulation of the criteria for determining qualifications positiveattributes and independence of a director;
- Recommend to the Board a policy relating to the remuneration of thedirectors key managerial personnel and other employees;
- Formulation of criteria for evaluation of Independent Directors andthe Board.
- Devising a policy on Board diversity; and
- Any other matter as the Board may decide from time to time.
NOMINATION AND REMUNERATION POLICY
The objectives of the Policy : year a) To lay down criteria and termsand conditions about identifying person who are qualified to become Directors (Executiveand Non-Executive) and persons who may be appointed in Senior Management and KeyManagerial positions and to determine their remuneration. b) To determine remunerationbased on the Company's size and financial position and trends and practices onremuneration prevailing in peer Companies. c) To carry our evaluation of the performanceof Directors. d) To provide them reward linked directly to their effort performancededication and achievement relating to the Company's operations. e) To retain motivateand promote talent and to ensure long term sustainability of talented managerial personsand create competitive advantage.
Your Company is committed to maintain the highest standards ofCorporate Governance. As required under SEBI Regulations the report on ManagementDiscussion and Analysis Corporate
Governance as well as the Auditors' Corporate Governance as well as theAuditors' certificate
Governance are annexed and form part of the Annual Report.
Pursuant to section 134 (3)(n) of the Companies Act 2013 ®ulation 17 of the Listing Regulations the Company has constituted a Risk ManagementCommittee. As part of the risk assessment and minimization procedures the
Company had identified certain risk areas about the operations of theCompany and initiated steps wherever possible for risk minimization. The Company's Boardis conscious of the need to review the risk assessment and minimization procedures onregular intervals. During the year under review the Company has not received any orderpassed by the regulators/ courts/ tribunals which impacted the going concern status andCompany's operation in future.
The Board of Directors acknowledges the responsibility for ensuringcompliance with the provisions of Section 134(3)(c) read with Section 134(5) of theCompanies Act 2013 in the preparation of the annual accounts for the year ended March31st 2018 and states that: a) In the preparation of the annual accounts for the yearended March 31 2018 the applicable accounting standards have been followed along withproper explanation relating to materials departures if any; b) The Directors haveselected such accounting policies and applied them consistently and made judgments andestimates that are reasonable and prudent to give a true and fair view of the of thereview and of Company at the end of the financial the profit or loss of the Company forthat period: c) 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;d) The directors have prepared the annual accounts on a going concern basis; e) Thedirectors have laid down internal financial controls to be followed by the Company andthat such internal financial controls are adequate and are operating effectively; and f)The Directors have devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems are adequate and operating effectively.
PARTICULARS OF EMPLOYEES
In terms of the provisions of Section 197(12) of the Companies Act2013 read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 a statement showing the names and other of theemployees drawing remuneration more than the limits set out in the said Rules are providedin the Annexure forming part of the Annual Report.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
There was one contract or arrangement entered by the Company inaccordance with the Section 188 of the Companies Act 2013 being the advance of 1839millions paid to M/s. LJ Victoria Property Pvt. Ltd. towards purchase of property inBengaluru. However there were material related party transactions in terms BSE/SEBIregulations. All material related party transactions that were entered by the Company ofbusiness duringthefinancial and on an arm's length basis. All related party transactionsare presented to the Audit Committee and the Board of Directors for approval. The policyon materiality of related party transactions and dealing with related party transactionsas approved by the Board can be accessed on the Company's website. The details of thetransactions with related party are provided in the accompanying financial statements.
PRACTICING COMPANY SECRETARY'S REPORT ON CORPORATE GOVERNANCE
As per BSE/SEBI regulation the Practicing Company Secretary's
Certificate is given as an annexure to the Directors Report.
M/s. BSR & Associates LLP Chartered Accountants Bengaluru Firm(Firm Registration No. 101248 w/w - 100022) was appointed as Statutory Auditors of theCompany at the last Annual General Meeting held on 25th September 2017 to hold office upto the conclusion of the 42nd Annual General Meeting of the company. The notes on accountsreferred to in the Auditors' Report are self- explanatory and therefore do not call forany further comments. There are no frauds reported by the Auditors during the FinancialYear under report.
M/s. Ernst & Young LLP Bengaluru Internal Auditors have beenconducting quarterly audits of all operations of the Company and their findings have beenreviewed regularly by the Audit Committee.
Your Directors note with satisfaction that no material deviations fromthe prescribed policy and procedures have been observed.
The Board has appointed B. Chandu Narayan Practicing CompanySecretary Bengaluru to conduct Secretarial Audit under the provisions of Section 204 ofthe Companies Act 2013 for the year 2017-18. The Secretarial Audit Report does notcontain any qualification reservation or adverse remark. The Secretarial Audit
Report is annexed elsewhere in this Annual Report.
MANAGEMENT DISCUSSION & ANALYSIS AND CORPORATE GOVERNANCE
Report on Management Discussion & Analysis and Corporate
Governance and Compliance Certificate on Corporate Governance isannexed to this Report.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
In line with the requirement of Section 135 of the Companies Act 2013the Corporate Social Responsibility Committee has been constituted by the Board ofDirectors of the Company at its meeting held on 05.02.2016. The said Committee comprisesof Mr. C.B. Pardhanani Chairman of the Company Mr. P.B. Appiah the Chairman of the AuditCommittee and Ms. Tanya Girdhar Independent Director. As required under Section 135 ofthe Companies Act 2013 the Board of Directors at its meeting held on 05.02.2016 hasdevised a Corporate Social Responsibility Policy which interalia includes the constitutionof the said committee and corporate social responsibility activities to be under taken bythe Company. The said policy may be referred at the Company's website. The Annual Reporton CSR activities is annexed to this Report.
INTERNAL FINANCIAL CONTROL POLICY AND ITS ADEQUACY
The Board has adopted an Internal Financial Control Policy to befollowed by the Company and such policies and procedures adopted by the Company forensuring the orderly and efficient of its business including adherence to Company'spolicies the safeguarding of its assets the prevention and detection of frauds anderrors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information. The Audit Committee evaluates the internalfinancialcontrol system periodically. The observations and comments of the Audit Committeeare placed before the Board.
A) MEETINGS OF THE BOARD
Four (4) meetings of the Board of Directors were held during thefinancial year under report. The details of the Board Meetings and the attendance of theDirectors are provided in the Corporate Governance Report.
B) COMPOSITION OF AUDIT COMMITTEE
The Audit Committee comprises four (4) Directors amongst which two (2)are Independent Non-Executive Directors namely Mr. P.B. Appiah Chairman of the AuditCommittee and Mr. M.R.B. Punja / Ms. Tanya Girdhar one (1) Non-executive director namelyMr. P.R. Ramakrishnan and one (1) is Mr. C.B. Pardhanani Chairman of the Company. All therecommendations made by the Audit Committee financial were accepted by the Board ofDirectors.
C) VIGIL MECHANISM/WHISTLE BLOWER POLICY
Pursuant to Section 177 of the Companies Act 2013 read with listingRegulations the Board of Directors at its meeting held on 05.02.2016 has adopted a vigilmechanism/whistle blower policy of the Company. The policy provides a framework fordirectors and employees to report genuine concerns about unethical behavior actual orsuspected fraud or violation of the Company's code of conduct or ethics policy. Protecteddisclosures can be made by a whistle blower through an email or direct access to theChairman of the Audit Committee. The vigil mechanism/whistle blower policy can be accessedon the Company's website maccharlesindia.com
D) GREEN INITIATIVES
Electronic copies of the Annual Report and notice of the ensuring AGMare sent to all the members whose email address are registered with the Company/Depository Participant(s). For members who have not registered their email addressesphysical copies of the Annual Report and the notice of ensuing AGM are sent in thepermitted mode. Members requiring physical copies can send a request to the CompanySecretary. The Company is providing e-voting facility to all members to enable them tocast their votes electronically on all resolutions set forth in the AGM Notice. Theinstructions for e-voting are provided in the AGM Notice.
E) DISCLOSURE AS PER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE(PREVENTION PROHIBITION AND REDRESSAL) ACT 2013
The Company has zero tolerance towards sexual harassment at workplaceand during the year under review your Board has constituted an internal ComplaintsCommittee to consider and redress complaints of sexual harassment & also adopted apolicy on prevention prohibition and redressal of sexual harassment at workplace in linewith the provisions of Sexual Harassment of women at Workplace (Prevention Prohibitionand Redressal) Act 2013 and the rules framed thereunder. During the financial year2017-18 the
Company has received one complaint on sexual harassment which has beenduly redressed.
F) PARTICULARS OF LOANS GIVEN INVESTMENT MADE GUARANTEES GIVEN ANDSECURITY PROVIDED
Of loans given investments made along with the purpose for which theloan is proposed to be utilized by the recipient are provided in the financial statements.
1. Declaration by the Chief Executive Officer affirming compliance withthe code of conduct is annexed elsewhere in this Annual Report.
2. There are no material changes and commitments made during thefinancial year.
3. There are no changes in the nature of business during the financialyear.
4. There is a material variation of market capitalization during thefinancial year.
5. There are a demat suspense accounts / unclaimed suspense accountduring the financial year.
6. Necessary disclosures of Accounting Treatment have been made in thefinancial statements. The Financial Statements of the Company have been prepared inaccordance with the IND
AS to comply with the Accounting Standards specified under
Section 133 of the Act read with Rule 7 of the Companies (Accounts)Rules 2014.
7. The extract of Annual Return is annexed elsewhere in this AnnualReport.
Your directors state that no disclosure or reporting is required inrespect of the following items as there were no transactions on these items during theyear under review:
1. Details relating to deposits covered under Chapter V of theCompanies Act 2013.
2. Issue of equity shares with differential rights as to dividendvoting or otherwise.
3. Issue of shares (including sweat equity shares) to employees of theCompany under any scheme.
4. No significant or material orders were passed by the Regulators orCourts of Tribunals which impact the going concern status and Company's operations infuture.
The equity shares of the Company have been admitted fordematerialization with both the Depositories viz. Central Depository Services (India)Limited (CDSL) and National Securities Depository Limited (NSDL). The ISIN allotted toyour Company's equity shares is INE435D01014.
Your Directors are grateful to the Shareholders for their support andco-operation extended to the Company for many years. The Directors also thank the Banksnamely State Bank of India and HDFC Bank for their co-operation and support. TheDirectors wish to place on record the support and encouragement received from theDepartment of Tourism Government of India Karnataka State Government and Foreigncollaborators M/s. Le Meridien / Marriott International. The Directors also acknowledgethe dedicated services rendered by the officers and all the staff of the company.
For and on behalf of the Board
Bengaluru 23 May 2018