Total Hospitality Ltd.
|BSE: 523878||Sector: Consumer|
|NSE: N.A.||ISIN Code: INE109E01013|
|BSE 00:00 | 27 May||Total Hospitality Ltd|
|NSE 05:30 | 01 Jan||Total Hospitality Ltd|
Total Hospitality Ltd. (TOTALHOSPITALIT) - Director Report
Company director report
The Board of Directors hereby present their Thirty-fifth Annual Report along with theAudited Financial Statements for the financial year ended on March 31 2017. Theconsolidated performance of the Company and its associate has been referred to wherevernecessary.
MATERIAL CHANGES AND COMMITMENTS
During the year under review the Company has not made any material changes in theshare capital of the Company. There are no material changes or commitments affecting thestandalone financial position of the Company which have occurred between the end of theFinancial Year to which the financial statement relates and the date of the report.However during the year the company has acquired 49% stake in Capitano Health CarePrivate Limited thereby requiring in addition to standalone financial statements ofthe company a consolidated financial statement of the company and of its associate in thesame form and manner as that of its own which shall also be laid before the annual generalmeeting of the company along with the laying of its financial statement.
SUBSIDIARIES ASSOCIATES AND JOINT VENTURE COMPANIES
The Company has acquired 49% equity stake in Capitano Health Care Private Limited duringthe year. Thereby making it Associate of the Company. Form AOC-1 is attachedherewith and marked as "Annexure-I".
However the Company does not have any subsidiary/subsidiaries and Joint VentureCompanies within the meaning of the Companies Act 2013.
PERFORMANCE REVIEW AND STATE OF COMPANY'S AFFAIRS
During the year under review the company has acquired substantial stake in CapitanoHealth Care Private Limited aggregating to 49% equity shares. During the year under reviewthe Company has suffered a loss of Rs. 3663830 as against Rs. 1862734 in the financialyear 2015-2016. The Board plans to adopt new policies for better market reach in theupcoming Financial Year.
Due to losses incurred during the year no amount has been transferred to Reserves.
The Board of Directors does not recommend any dividend for the financial year ended on31st March 2017.
During the year under review the Company has not accepted any deposit which fallsunder the purview of Chapter V of the Companies Act 2013 read the Companies (Acceptanceof Deposits) Rules 2014.
At the Company we constantly strive to evolve and follow up on the CorporateGovernance guidelines and best practices The provisions of Corporate Governance is notapplicable on the Company in terms of Regulation 15(2) of SEBI (LODR) Regulationshowever as a matter of good practice a separate section on Corporate Governance and thecertificate from the Practicing Company Secretary regarding non applicability of CorporateGovernance norms forms part of this Report.
DIRECTORS & THEIR MEETING
During the year there was no change in the composition of Board of Directors.Although the Board was not properly constituted as one more Independent Director shouldbe appointed. Due to lack of nomintations the Board was neither able to find nor identifyany individual for appointment to the post of Independent Director. However the Boardhas on the recommendation of the Nomination and Remuneration Committee has proposed Ms.Isha (DIN: 07045557) to be appointed as an Independent Director on the Board of theCompany for a period of 5 years.
In accordance with provisions of the Act and the Articles of Association of theCompany Ms. Divya Seengal (DIN: 00507943) Managing Director is liable to retire byrotation and is eligible for re-appointment.
The Board of Directors met Six (6) times in the year 2016-2017. The details of theBoard Meetings and committee meeting along with the attendance of the Directors andmembers are provided in the Corporate Governance Report.
The company has received declarations under Section 149(7) of the Act that theIndependent Director meet the criteria of independence as laid down under Section 149(6)of the Act and Regulation 16 of the SEBI (LODR) Regulations.
KEY MANAGERIAL PERSONNEL
During the year Mr. Dharamveer Rathore Chartered Accountant was appointed as ChiefFinancial Officer in the company on 09/05/2016.
The KMPs during the year were:
i) Ms. Divya Seengal Managing Director
ii) Ms. Garima Munjal Company Secretary
iii) Mr. Dharamveer Rathore Chief Financial Officer
The Committee of Directors will function as a bridge between the Board of directors andthe Management with a view to
i. strengthen alignment on strategic direction for the business
ii. review periodically the execution of approved strategies
iii. support management with inputs in navigating the transformational journey.
The composition of various Committees is disclosed in the Corporate Governance Report.
Pursuant to the provisions of the Companies Act 2013 the Board has carried out anannual performance evaluation of its own performance the directors individually as wellas the evaluation of the working of its Committees.
The annual evaluation process of the Board of Directors ("Board") Committeesand individual Directors was carried out in the manner prescribed in the provisions of theAct Guidance Note on Board Evaluation issued by Securities and Exchange Board of India onJanuary 5 2017 and as per the Corporate Governance requirements prescribed by SEBI (LODR)Regulations.
The performance of the Board Committees and individual Directors was evaluated by theBoard seeking inputs from all the Directors and members of respective committee. The"NRC" reviewed the performance of the individual Directors. This was followed bya Board meeting that discussed the performance of the Board its Committees and individualDirectors.
The criteria for performance evaluation of the Board included aspects like Boardcomposition and structure; effectiveness of Board processes information and functioning
etc. The criteria for performance evaluation of Committees of the Board includedaspects like composition and structure of the Committees functioning of Committeemeetings contribution to decision of the Board etc. The criteria for performanceevaluation of the individual Directors included aspects on contribution to the Board andCommittee meetings like preparedness on the issues to be discussed meaningful andconstructive contribution and inputs in meetings integrity etc.
COMPANY'S POLICY ON DIRECTOR'S APPOINTMENT AND REMUNERATION
The NRC is responsible for developing competency requirements for the Board based onthe industry and strategy of the Company. The Board composition analysis reflects in-depthunderstanding of the Company including its strategies environment operations financialcondition and compliance requirements. The NRC evaluates on time to time the effectivenessand efficiency of Board including each time a Director's appointment or reappointment isrequired undertake a reference and due diligence and meeting potential candidates priorto making recommendations of their nomination to the Board. At the time of appointmentspecific requirements for the position including expert knowledge expected iscommunicated to the appointee.
The company has already adopted the Remuneration Policy as amended from time to time.The remuneration policy provides for the following:
a) Selection and procedure for nomination and appointment of Directors and theirremuneration
Responsibilities & obligations of the personnel
Strategies followed & successfully implemented
Performance of the Company
In-depth knowledge & skills required for the job
The basis for determining the remuneration of the Directors KMP's and other seniormanagerial personnel are:
The Company's Remuneration policy is a comprehensive policy which is competitive inconsonance with the industry practices and is directed towards rewarding performance basedon review of achievements periodically. The policy aims at attracting and retaining highcaliber talent and ensures equity fairness and consistency in rewarding the employees.The Company has a System which aims at focusing and aligning the performance of theindividual employees to the organizational objectives. The system involves a comprehensiveprocess which includes different stages like goal setting exercise performance reviewratings and rewards. It ensures that all employees know what is expected of them in theirjob and are able to measure their performance. The Company endeavors to attract retaindevelop and motivate high performance workforce.
The Managing Director is paid remuneration if any as approved by the Board ofDirectors on the recommendation of the Nomination & Remuneration committee.
However during the year the company has not paid any remuneration to Non-ExecutiveDirectors while the Managing Director has not taken any remuneration for carrying outoperations of the company properly.
The remuneration for the senior management personnel depends on the caliber of thecandidate and increase if any depend on their performance update-to-date knowledge andoutput.
b) Criteria for Determining Qualifications Positive Attributes and Independence of aDirector
The NRC has formulated the criteria for determining qualifications positive attributesand independence of directors in terms of provisions of Section 178 (3) of the Act andRegulation 19 read along with Schedule II of SEBI (LODR) Regulations. The committeeconsiders the definition of Independent Director. The Committee determines thequalifications to ensure that a transparent board nomination process is in place thatencourages diversity of thought experience knowledge perspective age and gender. Themajor positive attributes of Directors is compliance with their duties under the Act orSEBI Regulations. Also the duties are laid in the Code of Conduct of the company as hostedon its website.
DETAILS UNDER SECTION 197(12) OF THE COMPANIES ACT 2013 READ WITH RULE 5(1) OF THECOMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES 2014
No remuneration was received by any directors in the company during the financial year2016-17. So the ratio of remuneration of each director to the median remuneration of theemployees of the company for the financial year 2016-17 is 0:25742. The remuneration ofemployees is as follows:
There were total 5 permanent employees on the payroll of company and one CS Intern. Itis hereby affirmed that the remuneration paid is as per the remuneration policy of thecompany.
The provisions of Rule 5(2) and (3) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 are not applicable on the company.
DIRECTOR'S RESPONSIBILITY STATEMENT
Based on the framework of internal financial controls and compliance systemsestablished and maintained by the Company work performed by the internal statutory andsecretarial auditors and the reviews performed by 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 2016-17. Accordinglypursuant to Section 134(5) of the Companies Act 2013 the Board of Directors to the bestof their knowledge and ability confirm that:
(a) In the preparation of the annual accounts the applicable accounting standards havebeen followed and there are no material departures;
(b) The Directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company at the end of the financial year and ofthe loss of the Company for that period;
(c) The Directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets 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; and
(e) The Directors have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively.
(f) The Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and such systems are adequate and operating effectively.
EXTRACT OF ANNUAL RETURN
Pursuant to Section 92(3) of the Companies Act 2013 read with rule 12(1) of theCompanies (Management and Administration) Rules 2014 the extract of the Annual Return asat 31st March 2017 in Form MGT-9 is annexed herewith as "Annexure-II"forming part of the Board's report.
The appointment of M/s. Gaur Jain & Co. Chartered Accountant (Firm RegistrationNo. 022957N) be and is hereby proposed to be ratified as Statutory Auditor of the Companyto hold office from the conclusion of this Annual general meeting until the conclusion of38th Annual general meeting of the Company. The Auditor's Report does notcontain any qualification reservation or adverse remark and do not call for any furtherexplanation/ clarification by the Board of Directors as provided under Section 134 of theAct.
Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 the Board of Directors onrecommendation of the Audit Committee appointed M/s A. Kaushal & Associates a firmCompany Secretaries in Practice to conduct the Secretarial Audit of the Company for theyear ended March 31 2017. The Report of the Secretarial Audit is annexed herewith as "Annexure-III".
The Board provides clarification on Auditor's observation(s) contained in the Report:
a) the Board was not properly constituted as one more Independent Director should beappointed. Due to lack of nomintations the Board was neither able to find nor identifyany individual for appointment to the post of Independent Director.
b) Due to the reason pointed at (i) above the committees were also not dulyconstituted for want of Independent Director.
PARTICULARS OF LOANS GUARANTEE OR INVESTMENTS UNDER SECTION 186
During the financial year under review the Company has made the following intercorporate investments that is covered under the provisions of Section 186 of the CompaniesAct 2013. The Company has 49% equity stake at par in Capitano Health Care PrivateLimited. Thereby acquiring stake and making it our Associate Company.
RELATED PARTY TRANSACTIONS
The Company has not entered into any related party transaction during the financialyear 2016-17 under the provisions of Section 188(1) of the Companies Act 2013 andtherefore disclosure in Form AOC-2 is not applicable.
CORPORATE SOCIAL RESPONSIBILITY INITIATIVES
The Provision of CSR as required by the Companies Act 2013 is not applicable to theCompany as the Company does not meet the basic criteria of the applicability of therelevant provision. However the Company is committed to operate and grow in a sociallyresponsible way.
CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION
As required under Section 134(3)(m) of the Companies Act 2013 read with rule 8 ofCompanies (Accounts) Rules 2014 details of conservation of energy technology absorptionforeign exchange earnings and outgo are as follows:
A) Conservation of energy & Technology absorption:
In the absence of any manufacturing activities during the year under review no stepswere required to be taken for conservation of energy and technology absorption and as suchno information is required to be provided under this segment.
(B) Foreign exchange earnings and Outgo:
The Company during the year under consideration has not earned or spent any foreignexchange.
VIGIL MECHANISM / WHISTLE BLOWER POLICY
The Company has a Vigil Mechanism / Whistle Blower Policy to deal with any instance offraud and mismanagement. The employees of the Company are free to report violations of anylaw rules regulations and concerns about unethical conduct to the Audit Committee /Managing director as the case may be. The vigil mechanism policy aims for conducting theaffairs in a fair and transparent manner by adopting highest standards of professionalismhonesty integrity and ethical behavior. The policy ensures that strict confidentiality ismaintained whilst dealing with the concerns and also that no discrimination with anyperson for a genuinely raised concern. It is affirmed that no personnel of the Company hasbeen denied access to the Audit Committee. The policy of vigil mechanism is available onthe Company's website.
RISK MANAGEMENT POLICY
Risks are events situations or circumstances which may lead to negative consequenceson the Company's business. Risk management is a structured approach to manage uncertainty.A formal enterprise wide approach to Risk Management is proposed to be adopted by theCompany considering the market conditions for the upcoming project to be undertaken by thecompany and key risks will now be managed within a unitary framework.
The Company regularly maintains a proper check in normal course of its businessregarding the Risk Management. At present the Company has not identified any element ofrisk which may threaten the existence of the Company. However for the upcoming projectthe company identifies the fluctuations in Forex market Country and Political risk needsto be taken care as this may have a major bearing on cost analysis as anticipated.
POLICIES & CODES OF THE COMPANY
The Company has posted the following documents on its website at www.totalhospitality.in
Code of Conduct for Board Members & Senior Management Personnel
Policy for Preservation of Documents
INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY
The Company has adequate system of internal control to commensurate with the sizescale and complexity of its operations to safeguard and protect from loss unauthorizeduse or disposition of its assets. All the transactions are properly authorized recordedand reported
to the Management. The Company is following all the applicable Accounting Standards forproperly maintaining the books of accounts and reporting financial statements.
The management monitors and evaluates the efficacy and adequacy of internal controlsystem in the Company its compliances with operating systems accounting procedures andpolicies. Based on the report of internal audit function process owners undertakecorrective action in their respective areas and thereby strengthen the controls.
DISCLOSURE ON SEXUAL HARASSMENT OF WOMAN AT WORKPLACE (PREVENTION PROHIBITION ANDREDRESSAL) ACT 2013
The Company has zero tolerance for sexual harassment at workplace. The company hasestablished the Complaints Committee under the Sexual harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013 and the rules framed there under.
The committee is constituted with Managing Director and Company Secretary as itsmembers of the Company.
The Company is committed to providing equal opportunities without regard to their racecaste sex religion colour nationality disability etc. All women associates(permanent temporary contractual and trainees) as well as any women visiting theCompany's office premises or women service providers are covered under this Policy. Allemployees are treated with dignity with a view to maintain a work environment free ofsexual harassment whether physical verbal or psychological.
During the year the company has widely disseminated the declaration for prohibitionprevention and redressal of sexual harassment at the workplace intended to promote gendersensitive safe spaces and remove underlying factors that contribute towards hostile workenvironment against women
The annual report as prepared by the Complaints Committee is as follows:
MANAGEMENT DISCUSSION & ANALYSIS
The Management Discussion & Analysis Report on the performance industry trends andother material changes with respect to the Company is given in "Annexure-IV" formingpart of this report.
The Company always endeavors to keep timely response to shareholder'srequest/grievances. Priority is accorded to address all the issues raised by theStakeholder's and provide them with satisfactory replies at the earliest. The StakeholderRelationship Committee (earlier Shareholder's and Investor Grievances committee) of theBoard meets periodically and review the status of investor's grievances.
SIGNIFICANT AND THE MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There are no significant material orders passed by the Regulators/Courts which wouldimpact the going concern status of the Company and its future operations.
The Directors wish to convey their appreciation to its team for their enormous personalefforts as well as their collective contribution. The Directors would also like to thankthe employees shareholders customers dealers bankers Government and all the otherbusiness associates for the continuous support given by them to the Company and theirconfidence in its management.