Your Directors are pleased to present their Thirty-Seventh Annual Report and AuditedStatement of Accounts for the year ended March 31 2020.
I FINANCIAL DETAILS
|Consolidated Financial Highlights || ||(Rs in Millions) |
|Particulars ||2019-2020 ||2018-2019 |
|Revenue from Operations (Net) ||15477.86 ||14020.43 |
|Total Expenses excluding Depreciation Finance costs and Tax ||13337.46 ||12830.57 |
|EBITDA ||2270.39 ||1326.25 |
|Profit before exceptional items and tax ||78.57 ||351.78 |
|Exceptional Items ||166.31 ||- |
|Profit / (Loss) before tax ||(87.74) ||351.78 |
|Less : Tax Expenses ||(14.26) ||138.87 |
|Profit / (loss) for the year ||(73.48) ||212.92 |
|Other comprehensive income for the year ||(10.00) ||(1.86) |
|Total comprehensive income for the year ||(83.48) ||211.06 |
|Standalone Financial Highlights || ||(Rs in Millions) |
|Particulars ||2019-2020 ||2018-2019 |
|EBITDA ||(3.05) ||(3.32) |
|Less : Depreciation ||0.02 ||0.02 |
|(Loss) before taxes ||(3.07) ||(3.34) |
|Tax Expense || || |
|Current tax ||- ||0.29 |
|(Loss) for the year ||(3.07) ||(3.63) |
|Add : Balance brought forward- Retained Earnings ||(51.44) ||(41.59) |
|Employee stock option recognised at fair value ||- ||(6.22) |
|Balance Carried forward- Retained Earnings ||(54.51) ||(51.44) |
Standalone Operating Performance
During the financial year 2019-20 the Company has reported a loss after tax of Rs.3.07 millions as against a loss of Rs 3.63 millions for the previous year.
The Company focuses on putting up and operating Quick Service Restaurants (QSR) inIndia through its wholly owned subsidiary which is a Development Licensee / MasterFranchisee of McDonald's and operates QSRs under the brand name McDonald's.
Consolidated financial statements of the Company and its subsidiary prepared inaccordance with applicable accounting standards and duly audited by the Company'sstatutory auditors are annexed.
Subsidiary's Operating Performance
The highlights of the Subsidiary's performance for FY 2019-20 and its contribution tothe overall performance of the Company is provided below:
| || ||(Rs in Millions) |
|Particulars ||2019-2020 ||2018-2019 |
|Revenue from Operations (Net) ||15472.91 ||14016.06 |
|Total Expenses excluding Depreciation Finance Costs and Tax ||13329.46 ||12822.87 |
|EBITDA ||2273.45 ||1329.58 |
|Profit before tax and exceptional items ||81.63 ||355.12 |
|Exceptional items ||166.31 ||- |
|Profit / (loss) before tax ||(84.68) ||355.12 |
|Less : Tax Expense ||(14.22) ||138.58 |
|Profit / (loss) for the year ||(70.46) ||216.54 |
|Other comprehensive income for the year ||(10.00) ||(1.86) |
|Total comprehensive income for the year ||(80.46) ||214.68 |
Subsidiaries Joint Ventures or Associate Companies
During the year under review no company has become or ceased to be the Company'ssubsidiary joint venture or associate company.
As per the provisions of Section 129(3) of the Companies Act 2013 a statementcontaining salient features of the financial statements of the Company's subsidiary isprovided as Annexure A to the consolidated financial statements.
Considering the present financial position as on 31st March 2020 no dividend is beingrecommended.
State of the Company's a!airs
Your Company was classified as a Core Investment Company (CIC') exempted fromregistration with the Reserve Bank of India within the meaning of the Core InvestmentCompanies (Reserve Bank) Directions 2016. It has promoted the operations of QSRs throughits subsidiary as aforesaid. The Company endeavors to continuously improve itsperformance. Your Directors are satisfied with the present state of the Company's affairs.
Transfer to Reserves
No funds are being transferred to the reserves.
Material changes and commitments
No material changes and commitments affecting the financial position of your Companyhave occurred between 31st March 2020 and the date of the report.
Particulars of loans guarantee or investments
Particulars of the loans given investment made or guarantee given or security providedand the purpose for which the loan or guarantee or security is proposed to be utilised bythe recipient of the loan or guarantee or security are provided in Note No. 4 to theStandalone Financial Statements.
Maintenance of Cost Records
During the period under review your Company was not required to maintain cost recordsas specified by the Central Government under sub-section (1) of Section 148 of theCompanies Act 2013.
Internal Complaints Committee for Sexual Harassment
Your Company has complied with the provisions relating to the constitution of InternalComplaints Committee under the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013.
III DIRECTORS AND MANAGEMENT
Re-appointment of Directors
Pursuant to the provisions of Section 152 of the Companies Act 2013 the office of MsSmita Jatia (DIN: 03165703) is liable to retire by rotation at the ensuing Annual GeneralMeeting and being eligible she offers herself for re-appointment. The Board ofDirectors has recommended her re-appointment.
Pursuant to the provisions of Section 161 of the Companies Act 2013 Ms AmishaHemchand Jain (DIN: 05114264) vide Board resolution dated 26th March 2019 was appointedas an Additional Director of the Company w.e.f. 1st April 2019. The Board recommended herappointment as Director of the Company to the members and was duly approved by the membersat the 36th AGM of the Company.
Number of meetings of the Board
Four meetings of the Board of Directors were held during the financial year. Forfurther details please refer to the Report on Corporate Governance which forms a part ofthis Annual Report.
Declaration by Independent Directors
The Company has received declarations from all the Independent Directors of the Companyconfirming that they fulfill the criteria of independence as prescribed under sub-section(6) of Section 149 of the Companies Act 2013 and the Listing Regulations.
The Company's Board comprises inter alia one Independent Director who was appointedduring the year under review being Ms Amisha Hemchand Jain who was appointed with effectfrom 1st April 2019. In the opinion of the Board Ms Amisha Hemchand Jain possesses thenecessary integrity expertise experience and proficiency to fulfill her role asIndependent Director of the Company and has informed the Board that she will in duecourse undergo the online proficiency test as mandated by the relevant Rules.
Directors' Responsibility Statement
As required under Section 134 (3) (c) and pursuant to Section 134 (5) of the CompaniesAct 2013 your Directors state that:
(a) in the preparation of the annual accounts for financial year ended 31st March2020 the applicable accounting standards have been followed and there are no departuresin adoption of these standards;
(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 31st March 2020 and of the profit andloss of the Company for the year ended on that date;
(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 for financial year ended 31stMarch 2020 on a going concern' basis.
(e) the Directors have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingefficiently; and
(f) the Directors have devised proper systems to ensure compliance with provisions ofall applicable laws and that such systems were adequate and operating effectively.
Pursuant to the provisions of the Companies Act 2013 and Regulation 17 of theSecurities and Exchange Board of India (Listing Obligations and Disclosure Requirements)Regulations 2015 ("the Listing Regulations") the Board has carried out anannual evaluation of its own performance and that of its Committees as well as performanceof the Directors individually. Feedback was sought by way of a structured questionnairethrough online survey covering various aspects of the Board's functioning such as adequacyof the composition of the Board and its Committees Board culture execution andperformance of specific duties obligations and governance and the evaluation was carriedout based on responses received from the Directors.
A separate exercise was carried out by the Nomination and Remuneration Committee of theBoard to evaluate the performance of individual Directors. The performance evaluation ofthe Non-Independent Directors and the Board as a whole was carried out by the IndependentDirectors. The performance evaluation of the Chairman of the Company was also carried outby the Independent
Directors taking into account the views of the Executive Director and Non-ExecutiveDirectors. The Directors expressed their satisfaction with the evaluation process.
In accordance with Regulation 18 of the Listing Regulations read with Section 177 ofthe Companies Act 2013 the Company had constituted an Audit Committee which consists ofthree independent non-executive directors namely; (1) Mr P.R. Barpande (Chairman) (2) MrManish Chokhani (member) Mr Tarun Kataria (member) and one other director Mr Amit Jatia(member). The Audit Committee functions in terms of the role and powers delegated by theBoard of Directors of the Company keeping in view the provisions of Regulation 18 of theListing Regulations and Section 177 of the Companies Act 2013 and the corresponding Rulesmade thereunder being the Companies (Meetings of Board and its Powers) Rules 2014.
Further Mr Tarun Kataria was appointed as a member of the Audit Committee by the Boardof Directors of the Company vide its resolution dated 14th May 2019 with effect from thesaid date.
Vigil Mechanism and Whistleblower Policy
The Vigil Mechanism as envisaged in the Companies Act 2013 the Rules prescribedthereunder and under Regulation 22 of the Listing Regulations is implemented through theCompany's Vigil & Whistleblower Policy to enable the Directors and employees of theCompany to report genuine concerns to provide for adequate safeguards againstvictimisation of persons who use such mechanism and make provision for direct access tothe Chairman of the Audit Committee.
The Vigil & Whistleblower Policy of the Company is available on the Company'swebsite at the web-link: http://www.westlife.co.in/investors-compliance-and-policies.php
B S R & Associates LLP Chartered Accountants (ICAI Registration No.116231W/W-100024) had been appointed as Statutory Auditors of the Company for a term of 5(five) years at the 34th Annual General Meeting (AGM) held on 20th September 2017 tohold office from the conclusion of the 34th AGM till the conclusion of the 39th AGM of theCompany. They have confirmed that they are not disqualified from continuing as StatutoryAuditors of the Company.
The Notes on financial statements referred to in the Auditors' Report are self-explanatory hence no clarification is required. The Auditors' Report does not contain anyqualification reservation adverse remark or disclaimer.
Pursuant to the provisions of Section 204 of the Companies Act 2013 read with theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 the Companyhad appointed Mr Shailesh Kachalia Practicing Company Secretary (Certificate of PracticeNumber: 3888) to carry out the Secretarial Audit of the Company.
In terms of the provisions of sub-section (1) of Section 204 of the Companies Act 2013read with Regulation 24A of the SEBI (LODR) Regulations 2015 the Company has annexed tothis Board Report as Annexure I' a Secretarial Audit Report given by a companysecretary in practice.
The Secretarial Audit Report does not contain any qualification reservation or adverseremark or disclaimer.
Key Managerial Personnel (KMP)
Pursuant to the provisions of Section 203 of the Companies Act 2013 the KeyManagerial Personnel of the Company are Mr Amit Jatia Chief Executive Officer (CEO) MrSuresh Lakshminarayanan Chief Financial Officer (CFO) (till 31st March 2020) and Dr.Shatadru Sengupta Company Secretary (CS). There has been no change in Key ManagerialPersonnel during the year. Mr Pankaj Roongta was appointed as Chief Financial Officer ofthe Company w.e.f. 4th May 2020.
Contracts or Arrangements with Related Parties
Related Party Transactions that were entered into during the year by your Company havebeen disclosed in Form AOC-2 pursuant to Section 134(3) (h) of the Companies Act 2013which has been appended as Annexure II'.
In compliance with clause 2A Part-A Schedule V of the SEBI (LODR) Regulations 2015during the period under review the Company has not entered into any transaction with anyperson or entity belonging to the promoter/promoter group which hold(s) 10% or moreshareholding in the company.
Disclosures on Employee Stock Option Scheme
In compliance with Regulation 14 of Securities and Exchange Board of India (Share BasedEmployee Benefits) Regulations 2014 (the Regulations') read with SEBI Circular no.CIR/CFD/POLICY CELL/2/2015 dated 16th June 2015 your Board of Directors report thatduring the year under review no material changes in the Westlife Development LimitedEmployees Stock Option Scheme 2013 (the Scheme') had taken place and that the Schemeis in compliance with the Regulations. Further the details mentioned in the Regulationshave been disclosed on the Company's website at web link:http://www.westlife.co.in/web/compliance.aspx.
Policy for Qualifications positive attributes and independence criteria for Directorsand Remuneration for Directors Key Managerial Personnel and other employees In accordancewith the provisions of Section 134(3) (e); sub section (3) and (4) of Section 178 of theCompanies Act 2013 and Regulation 19 read with Part D of Schedule II of the ListingRegulations the Company has formulated this policy. The said policy has been appended asAnnexure III' which forms a part of this Report.
Corporate Social Responsibility
The provisions of Section 135 of the Companies Act 2013 as to Corporate SocialResponsibility are not applicable to your Company.
Disclosure pursuant to Rule 5 of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014
In accordance with Rule 5 of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 the following disclosures are made:
The ratio of the remuneration of each director to the median remuneration of theemployees of the Company for the financial year: N.A. *
the percentage increase in remuneration of each director Chief FinancialOfficer Chief Executive Officer Company Secretary or Manager if any in the financialyear: N.A.*
the percentage increase in the median remuneration of employees in the financialyear: N.A.*
the number of permanent employees on the rolls of Company: Three
average percentile increase already made in the salaries of employees other thanthe managerial personnel in the last financial year and its comparison with the percentileincrease in the managerial remuneration and justification thereof and point out if thereare any exceptional circumstances for increase in the managerial remuneration: N.A.*
the terms of remuneration are in line with the Remuneration Policy of theCompany.
*Directors did not receive any remuneration from the Company during the year exceptsitting fee for attending meetings of the Board and its Committees and no remuneration isbeing paid to the employees or Key Managerial Personnel of the Company.
Internal Financial Control Systems
Internal Financial Controls are an integrated part of the risk management processaddressing financial and financial reporting risk. The internal financial controls havebeen documented and embedded in the business system.
The Company has a proper and adequate internal audit and control system commensuratewith its size and the nature of its business. No instance of any fraud or misdemeanor hasbeen noticed during the year.
Significant and material orders
There are no significant and material orders passed by the regulators or courts ortribunals impacting the going concerns status and Company's operations in future.
The Company did not accept any deposits during the year.
Report on Corporate Governance of the Company for the year under review as per therequirements of Regulation 34 (3) read with Para C of Schedule V of the ListingRegulations has been given under a separate section and forms part of this Annual Report.
Management Discussion and Analysis
A detailed review of operations performance and future outlook of the Company and itsbusiness as stipulated under Regulation 34 (2)(e) read with Para B of Schedule V of theListing Regulations is presented in a separate section forming part of the Annual Reportunder the heading Management Discussion and Analysis'.
Investor Education and Protection Fund (IEPF)
No unpaid and unclaimed dividend is lying with the Company.
Extracts of Annual Return
In accordance with sub-section 3(a) of Section 134 and sub-section (3) of Section 92 ofthe Companies Act 2013 read with Rule 12 of the Companies (Management andAdministration) Rules 2014 an extract of the annual return as at 31st March 2020 formspart of this Report and is appended herewith as Annexure IV'.
Conservation of Energy Technology Absorption and Foreign Exchange Earnings and Outgo
The particulars in respect of conservation of energy technology absorption and foreignexchange earnings and outgo as required under sub-section (3) (m) of Section 134 of theCompanies Act 2013 read with Rule (8)(3) of the Companies (Accounts) Rules 2014 aregiven as under:
A. Conservation of Energy
i) The steps taken or impact on conservation of energy: The operations of your Companyare not energy intensive.
ii) The steps taken by the Company for utilizing alternate sources of energy: NIL
iii) The capital investment on energy conservation equipments: NIL
However the Company's subsidiary Hardcastle Restaurants Pvt. Ltd has takensignificant measures for conservation of energy and saving the environment as set outmore particularly in the Business Responsibility Report forming part of this AnnualReport.
B. Technology Absorption
i) The efforts made towards technology absorption : NIL
ii) The benefits derived like product improvement cost reduction product developmentor import substitution : NIL
iii) in case of imported technology (imported during the last three years reckoned fromthe beginning of the Financial Year): NIL
(a) Details of Technology Imported;
(b) Year of Import;
(c) Whether the Technology has been fully absorbed;
(d) if not fully absorbed areas where absorption has not taken place and the reasonsthereof.
iv) Your Company has not incurred any expenditure on Research and Development duringthe year under review.
C. Foreign Exchange Earnings and Outgo
During the year under review there were no foreign exchange inflow outflow orearnings.
Your Company has a well-defined risk management framework in place. The risk managementframework works at various levels across the Company. The Company has a robustorganisational structure for managing and reporting on risks.
Your Company has constituted a Risk Management Committee of the Board which isauthorised to monitor and review a Risk Management Plan including Cyber Security. The RiskManagement Plan provides a detailed programme for risk prevention risk mitigation andrisk management and the operation/working thereof along with reporting of any new risks.The Risk Management Plan has been established across the organisation and is designed toprevent mitigate and manage risks that affect the Company.
IV DIVIDEND DISTRIBUTION POLICY
The above policy is enclosed as Annexure-V' to the Board's Report and alsoavailable on the Company's website athttp://www.westlife.co.in/investors-compliance-and-policies.php
V BUSINESS RESPONSIBILITY REPORT (BRR)
The Listing Regulations mandate the inclusion of the BRR as part of the Annual Reportfor the top 500 listed entities based on market capitalization. In compliance with theListing Regulations we have integrated BRR disclosures annexed as Annexure-VI' tothe Board's Report.
The Board of Directors wishes to express its gratitude and record sincere appreciationfor the dedicated efforts of all employees of the Company. The Board is thankful to theesteemed shareholders for their continued support and confidence reposed in the Company.The Board takes this opportunity to express its gratitude for the valuable assistance andco-operation extended by all stakeholders including government authorities customersbanks vendors advisors and other business partners.
For and on behalf of the Board of Directors
|Sd/- ||Sd/- |
|Amit Jatia ||Smita Jatia |
|Director ||Director |
|DIN:00016871 ||DIN: 03165703 |
|Place: Mumbai || |
|Date: 30th July 2020 || |