Directors Report of Oriental Hotels Ltd.
Mar 31, 2022
The Directors are pleased to present the 52nd Annual Report of Oriental Hotels Limited ("the Company" or "OHL") along with the audited financial statements for the financial year ended March 31, 2022. The consolidated performance of the Company and its subsidiaries has been referred to wherever required.
|
1. Financial Results |
? in Lakhs |
|||
|
Standalone |
Consolidated |
|||
|
Particular |
2021-22 |
2020-21 |
2021-22 |
2020-21 |
|
Revenue |
21870.41 |
11,578.08 |
21939.85 |
11,588.02 |
|
Other income |
702.69 |
743.50 |
703.88 |
724.15 |
|
Total income |
22573.10 |
12,321.58 |
22643.73 |
12,312.17 |
|
Expenses |
||||
|
Operating expenditure |
19581.07 |
14,780.48 |
19597.66 |
14,790.90 |
|
Depreciation and amortization expenses |
2625.53 |
2,874.72 |
2625.53 |
2,874.72 |
|
Total Expenses |
22206.60 |
17,655.20 |
22223.19 |
17,665.62 |
|
Profit/ (Loss) before finance cost and tax |
366.50 |
(5,333.62) |
420.54 |
(5,353.45) |
|
Finance cost |
2220.13 |
2,200.50 |
2220.13 |
2,200.50 |
|
Profit/(Loss) before tax (PBT) |
(1853.63) |
(7,534.12) |
(1799.59) |
(7,553.95) |
|
Tax expense |
(515.88) |
(2,196.18) |
(515.88) |
(2,196.18) |
|
Profit/ (Loss) for the year before share of equity accounted investees |
(1337.75) |
(5,337.94) |
(1283.71) |
(5,357.77) |
|
Add : Share of Profit / (Loss) of Associates and Jointly controlled entity |
NA |
NA |
(741.63) |
(1,769.84) |
|
Profit / (Loss) for the Year after share of equity accounted investees |
(1337.75) |
(5,337.94) |
(2025.34) |
(7,127.61) |
|
Non-Controlling Interest |
NA |
NA |
NA |
NA |
|
Opening Balance of retained earning |
(1841.51) |
3,701.31 |
7769.36 |
15,116.69 |
|
Profit / (Loss) for the Year |
(1337.75) |
(5,337.94) |
(2025.34) |
(7,127.61) |
|
Other comprehensive income / (losses) |
6.63 |
152.32 |
7.47 |
137.48 |
|
Total comprehensive income |
(1331.12) |
(5,185.62) |
(2017.87) |
(6,990.13) |
|
Dividend paid |
- |
(357.20) |
- |
(357.20) |
|
Closing balance of retained earnings |
(3172.63) |
(1,841.51) |
5751.49 |
7,769.36 |
In view of the losses incurred by the Company during the year and the absence of retained earnings, the Board did not recommend any dividend for FY 2021-22 (Previous Year - Nil) in line with the dividend distribution policy of the Company.
The Paid up equity share capital of the Company as on March 31, 2022, was 1,786 lakhs comprising of 17,85,99,180 equity shares having face value of?1 each. During the year, the Company had neither issued any shares nor instruments convertible into equity shares of the Company or with differential voting rights.
Due to losses in FY 2021 - 22, no amount has been transferred to Reserves.
5. Company''s Performance
On a standalone basis, the Total Income for FY 2021-22 was ?22,573.10 lakhs, which was higher than the previous year''s Total Income of ?12,321.58 lakhs by 83%. The Company reported a loss of ?1,337.75 lakhs for FY 2021-22 in comparison with a loss of ?5,337.94 lakhs for FY 2020-21.
On a consolidated basis, the Total Income for FY 2021-22 was ?22,643.73 lakhs, higher than the previous year''s Total Income of 12,312.17 lakhs increased by 84%. The Loss for the year after share of profit/(loss) of Associates and Jointly Controlled Entity for FY 2021-22 was 2,025.34 lakhs as against a loss for the previous year of ?7,127.61 lakhs.
Borrowings
The total borrowings including interest accrued stood at ?26,813.92 lakhs as on March 31, 2022 as against ?24,147.02 lakhs as on March 31, 2021.
During FY 2021-22, the Company has not issued any debentures and no debentures were outstanding as on March 31, 2022. Business Overview
An analysis of the Business and Financial Results are given in the Management Discussion and Analysis which forms part of the Annual Report.
6. Subsidiaries, Jointly Controlled Entity and Associate Companies
Pursuant to the provisions of Section 129(3) of the Act a statement containing the salient features of financial statements of the Company''s subsidiaries in Form No. AOC-1 is attached in the report as Annexure - 1.
Further, pursuant to the provisions of Section 136 of the Act, the financial statements of the Company, consolidated financial statements along with relevant documents and separate audited financial statements in respect of subsidiaries, are available on the website of the Company at : http://orientalhotels.co.in/investors/financial-results/
7. Directors'' Responsibility Statement
Based on the framework of internal financial controls and compliance systems established and maintained by the Company, the work performed by the internal, statutory and secretarial auditors and external consultants, including the audit of internal financial controls by the statutory auditors and the reviews performed by management and the relevant board committees, including the audit committee, the Board is of the opinion that the Company''s internal financial controls were adequate and effective during FY 2021-22.
Pursuant to Section 134(5) of the Act, the Board of Directors, to the best of their knowledge and ability, confirm that:
i. In the preparation of the annual accounts, the applicable accounting standards have been followed and there are no material departures;
ii. They have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the loss of the Company for that period;
iii. They have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
iv. They have prepared the annual accounts on a going co ncern basis
v. They have laid down internal financial controls to be followed by the Company and such internal financial controls are adequate and operating effectively;
vi. They have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.
8. Directors and Key Managerial Personnel In accordance with the requirements of the Act and the Company''s Articles of Association, Mr. D Vijayagopal Reddy (DIN: 00051554) and Mr. Giridhar Sanjeevi (DIN: 06648008) Directors of the Company, retires by rotation and being eligible, offers themselves for re- appointment. Relevant resolutions seeking shareholders'' approval forms part of the Notice. Pursuant to the provisions of Section 149 of the Act, the Independent Directors have submitted declarations that each of them meet the criteria of independence as provided in Section 149(6) of the Act along with Rules framed thereunder and Regulation 16(1)(b) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (''SEBI Listing Regulations''). In terms of Regulation 25 (8) of SEBI Listing Regulations they have confirmed that they are not aware of any circumstance or situation, which exist or may be reasonably anticipated, that could impair or impact their ability to discharge their duties with an objective independent judgment and without any external influence. The Board of directors of the Company has taken on record the declaration and confirmation submitted by the independent directors after undertaking due assessment of the veracity of the same. There has been no change in the circumstances affecting their status as Independent Directors of the Company.
The Independent Directors of the Company have confirmed that they have registered their names in the data bank of Independent Directors maintained with the Indian Institute of Corporate Affairs in terms of Section 150 of the Act read with Rule 6 of the Companies (Appointment & Qualification of Directors) Rules, 2014.
During the year under review, the Non-Executive Directors ofthe Company had no pecuniary relationship or transactions with the Company, other than sitting fees and reimbursement of expenses, if any incurred by them for the purpose of attending meetings of the Board/Committee of the Company.
Pursuant to the provisions of Section 203 of the Act, the Key Managerial Personnel of the Company as on March 31, 2022 are: Mr. Pramod Ranjan - Managing Director & Chief Executive Officer Mr. Sreyas Arumbakkam - Associate Vice President - Finance & Chief Financial Officer.
Mr. Tom Antony Associate Vice President - Legal & Company Secretary.
The Board of Directors, based on the recommendations of Nomination and Remuneration Committee (NRC) and subject to Member''s Approval, re-appointed Mr. Pramod Ranjan (DIN.:00887569) for a further period of three (3) years, with effect from November 11, 2021. In addition, based on the
recommendation of NRC Committee, the Board re-appointed Mr. Phillie D Karkaria (DIN.:00059397) for a second term commencing from January 23, 2022 up to November 05, 2023. Both the above appointments have been approved by the Members by way of Special Resolution as required under the provisions of the Companies Act, 2013.
9. Number of Meetings of the Board
Four (4) meetings of the Board were held during the year under review. For details of meetings of the Board, please refer to the Corporate Governance Report, which forms a part of the Annual Report.
10. Board Evaluation
The Board of Directors has carried out an annual evaluation of its own performance, board committees, and individual Directors pursuant to the provisions of the Act and SEBI Listing Regulations.
The performance of the Board was evaluated by the Board after seeking inputs from all the Directors on the basis of criteria such as the Board Composition and Structure; Degree of fulfilment of key responsibilities towards stakeholders (by way of monitoring corporate governance practices, participation in the long- term strategic planning, etc.); Effectiveness of board processes, information and functioning, etc.; Extent of co-ordination and cohesiveness between the Board and its Committees; and Quality of relationship between Board Members and the Management.
The performance of the committees was evaluated by the Board after seeking inputs from the committee members on the basis of criteria such as the composition of committees, effectiveness of committee meetings, etc
In a separate meeting of Independent Directors, performance of Non-Independent Directors, the board as a whole and the Chairman of the Company was evaluated, taking into account the views of Executive Directors and Non-Executive Directors.
The Board and the NRC reviewed the performance of individual Directors on the basis of criteria such as the contribution of the individual Director to the Board and committee meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings, etc.,
The above criteria are broadly based on the Guidance Note on Board Evaluation issued by the Securities and Exchange Board of India on January 5, 2017.
At the Board Meeting that followed the meeting of the Independent Directors and meeting of NRC, the performance of the Board, its Committees and individual directors was also discussed. Performance evaluation of Independent Directors was done by the entire Board, excluding the independent director being evaluated.
11. Policy on Directors'' Appointment and Remuneration and other details
The Company''s policy on directors'' appointment and remuneration and other matters provided in Section 178(3) of the Act has been disclosed in the Corporate Governance Report, which is a part of this report and is also available on : http://orientalhotels.co.in/investors/policies/
The Company has established the necessary vigil mechanism for directors and employees in confirmation with Section 177(9) of the Act and Regulation 22 of SEBI Listing Regulations, to report concerns about unethical behaviour. The details of the policy have been disclosed in the Corporate Governance Report, which forms a part of the Annual Report and is also available on http:// orientalhotels.co.in/investors/policies/
13. Internal Financial Control Systems and their Adequacy
The details in respect of internal financial control and their adequacy are included in the Management Discussion and Analysis, which forms a part of the Annual Report.
The following are the statutory committees of the Board
a. Audit Committee
b. Nomination and Remuneration Committee
c. Corporate Social Responsibility Committee
d. Risk Management Committee
e. Stakeholders'' Relationship Committee
The details including the composition of the statutory committees, attendance at the meetings and terms of reference are included in the Corporate Governance Report, which forms a part of the Annual Report.
In addition to the above statutory committees, the Board constituted an Investment Committee and Approval Committee.
During the year under review, all recommendations of the Committees were approved by the Board.
At the 47th AGM held on July 27, 2017, the Members approved the appointment of PKF Sridhar & Santhanam LLP, Chartered Accountants (Firm Registration No. 0039905S/S200018) as the Statutory Auditors of the Company to hold office for a period of five consecutive years from the conclusion of the 47th AGM till the conclusion of the 52nd AGM. Accordingly, PKF Sridhar & Santhanam, LLP, Chartered Accountants will complete their first term as the Statutory Auditors of the Company at the conclusion of the 52nd AGM and are eligible to be re-appointed as the Statutory Auditors of the Company for another term of five years. The Board of Directors based on the recommendation of the Audit Committee approved the re - appointment of PKF Sridhar & Santhanam, LLP, Chartered Accountants as the Statutory Auditors
of the Company for a second term of five consecutive years, i.e. to hold office from the conclusion of the ensuing 52nd AGM till the conclusion of the 57th AGM of the Company, to audit and examine the books of accounts of the Company, subject to approval of the Members at the ensuing AGM.
The necessary resolution for the re-appointment of PKF Sridhar & Santhanam, LLP, Chartered Accountants forms a part of the Notice convening the ensuing AGM scheduled to be held on Thursday, July 28, 2022.
16. Auditor''s Report and Secretarial Audit Report
The Statutory Auditor''s Report and the Secretarial Auditor''s Report do not contain any qualifications, reservations, or adverse remarks or disclaimer. Secretarial Auditor''s Report is attached to this report as Annexure-3.
17. Risk Management
The Board of Directors of the Company has formed a Risk Management Committee to frame, implement and monitor the risk management plan for the Company.
The Committee is responsible for monitoring and reviewing the risk management plan and ensuring its effectiveness. The Audit Committee has additional oversight in the area of financial risks and controls. The major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuing basis. The development and implementation of risk management policy has been covered in the Management Discussion and Analysis which forms a part of the Annual Report.
18. Particulars of Loans, Guarantees or Investments
Particulars of loans, guarantees given and investments made during the year under review, in accordance with Section 186 of
the Companies Act, 2013 is annexed to this report. (Refer Note No(s): 6 & 7 of financials).
19. Related Party Transactions
In line with the requirements ofthe Act and the Listing Regulations, the Company has formulated a Policy on Related Party Transactions and the same can be accessed on the Company''s website at http://orientalhotels.co.in/investors/Policies.
During the year under review, all transactions entered into with related parties were approved by the Audit Committee. Details of transactions with related party as per Form AOC-2 are provided in the Annexure-2 to this Report.
20. Corporate Social Responsibility
The brief outline of the Corporate Social Responsibility (CSR) policy of the Company and the initiatives undertaken by the Company on CSR activities during the year under review are set out in - Annexure-5 of this report. For other details regarding
the CSR Committee, please refer to the Corporate Governance Report, which is a part of this report. The CSR policy is available on http://orientalhotels.co.in/investors/policies/
As provided under Section 92(3) and 134(3)(a) of the Act, read with Rule 12 of Chapter VII, Companies (Management and Administration) Amendment Rules, 2020, Annual Return in Form MGT-7 for FY 2021-22 is uploaded on the website of the Company and can be accessed at http://orientalhotels.co.in/investors/annual-report/
The information required under Section 197 of the Act read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is appended as Annexure-4 to this report.
The statement containing names of top ten employees in terms of remuneration drawn and the particulars of employees as required under Section 197(12) of the Act read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is provided in a separate annexure forming part of this report. Further, the report and the accounts are being sent to the Members excluding the aforesaid annexure. In terms of Section 136 of the Act, the said annexure is open for inspection and any Member interested in obtaining a copy of the same may write to the Company.
As per SEBI Listing Regulations, the Corporate Governance Report with the Auditors'' Certificate thereon, and the Management Discussion and Analysis are attached, which forms part of this report.
As per Regulation 34 of the SEBI Listing Regulations, a Business Responsibility Report is attached and is a part of this Annual Report.
Your Company has formulated and adopted a Dividend Distribution Policy as envisaged under Regulation 43A of the SEBI (Listing Obligations and Disclosures) Regulations, 2015 as part of its corporate governance practices.
The policy is available on the Company''s website, at http://orientalhotels.co.in/investors/policies/
The Company has devised proper systems to ensure compliance with the provisions of all applicable Secretarial Standards issued by the Institute of Company Secretaries of India and that such systems are adequate and operating effectively.
The Company has not accepted any deposits from public and as such, no amount on account of principal or interest on deposits from public was outstanding as on 31st March 2022.
25. Particulars of Energy Conservation, Technology Absorption and Foreign Exchange Earnings and Outgo [Pursuant to Companies (Accounts) Rules, 2014]
A. Conservation of Energy:- In its endeavor to conserve energy, various measures have been undertaken on an ongoing basis at the hotel units of the Company. Installation of energy efficient equipments and heating panels coupled with phasing out of conventional lightings with CFL and LED lights resulted in reduction in power consumption. Efforts to increase the share of renewable source of energy like wind and solar also help in reduction in both power consumption cost and carbon foot print.
B. Technology Absorption: The Company continues to adopt and use the latest technologies to improve the efficiency and effectiveness of its business operations.
C. Foreign Exchange Earnings and Outgo:
⢠Earnings : ?2,056.48 lakhs
⢠Outgo : ?239.21 lakhs
26. Material changes and commitment affecting the financial position of the Company
The impact of COVID-19 on the Company''s financial statements has been given in Note 2(b) of the notes to financial statements for the year ended March 31, 2022 and the Company''s response to the situation arising from the pandemic has been explained in the Management Discussion and Analysis, which forms a part of the Annual Report.
27. Significant and material orders passed by the regulators
During the year under review, no significant material orders were passed by the Regulators or Courts or Tribunals impacting the going concern status and the Company''s operations.
28. Disclosures in relation to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (POSH Act)
The Company has always believed in providing a safe and harassment- free workplace for every individual working in the Company. The Company has complied with the applicable provisions of the POSH Act, and the rules framed thereunder,
including constitution of the Internal Complaints Committee. The Company has in place an Anti-Sexual Harassment Policy in line with the requirements of the POSH Act and the same is available on the Company''s website at: http://orientalhotels.co.in/investors/policies/
During the financial year, the Company has not received any complaint.
Maintenance of cost records as specified by the Central Government under Section 148 (1) of the Act is not applicable to the Company.
30. Proceedings under Insolvency and Bankruptcy Code, 2016
During the year under review, there were no proceedings that were filed by the Company or against the Company, which are pending under the Insolvency and Bankruptcy Code, 2016 as amended, before National Company Law Tribunal or other Courts.
During the year under review, there were no instances of onetime settlement with any Banks or Financial Institutions.
The Directors thank the Company''s, customers, vendors, investors and academic partners for their continuous support.
The Directors also thank the Government, concerned Government Departments and agencies for their co-operation.
The Directors appreciate and value the contribution made by every member of the OHL family.
The Directors place on record its appreciation for the valuable contributions made by all our employees and their families for making the Company what it is today.
For and on behalf of the Board
Place : Mumbai Puneet Chhatwal
Date : April 15, 2022 Chairman
DIN 07624616
Mar 31, 2019
To the Members
The Board of Directors are pleased to present the 49th Annual Report of your Company along with the Audited Financial Statements (standalone and consolidated) for the financial year ended March 31, 2019.
Financial Highlights Rs. in Lakhs
|
Standalone |
Consolidated |
|||
|
Particulars |
Year ended |
Year ended |
Year ended |
Year ended |
|
March 31, 2019 |
March 31, 2018 |
March 31, 2019 |
March 31, 2018 |
|
|
Total Income |
35,672.01 |
36,887.59 |
35,475.80 |
36,227.33 |
|
Profit before Depreciation, Finance Cost, Tax and Exceptional Items |
6,181.87 |
6,706.42 |
5,941.56 |
6,040.38 |
|
Less: Depreciation & Amortization |
2,837.77 |
2,765.94 |
2,837.77 |
2,765.94 |
|
Less: Finance Cost |
2,718.05 |
3,088.59 |
2,718.05 |
3,088.59 |
|
Profit before Tax, Exceptional Items and |
||||
|
share of profit of equity |
||||
|
accounted investees |
||||
|
Add: Exceptional Items (net) |
9,616.30 |
0.98 |
9,616.30 |
0.98 |
|
Profit/(Loss) before Tax |
10,242.35 |
852.87 |
10,002.04 |
186.83 |
|
Tax Expense: |
||||
|
- Current Tax |
2,157.09 |
188.58 |
2,157.09 |
188.58 |
|
- Deferred Tax |
(858.94) |
64.55 |
(858.94) |
64.55 |
|
Profit/(Loss) after Tax |
8944.20 |
599.74 |
8,703.89 |
(66.30) |
|
Add: Share of Profit/ (Loss) of Associates |
- |
- |
274.69 |
196.43 |
|
Add: Share of Profit/(Loss) of Jointly Controlled Entity |
- |
- |
179.94 |
482.30 |
|
Profit/ (Loss) After Tax and share of |
||||
|
associates and Jointly Controlled Entity |
8,944.20 |
599.74 |
9,158.52 |
612.43 |
|
Earnings per share (Rs.) |
5.01 |
0.34 |
5.13 |
0.34 |
State of Companyâs affairs Operating Results
The Company achieved a turnover of Rs.35,672.01 lakhs for the period ended March 31, 2019, decreased by Rs.1,215.58 lakhs (3.3%) as compared to previous year.
The Profit before Depreciation, finance cost & tax (EBITDA) for the year ended March 31, 2019 amounted to Rs.6,181.87 lakhs, decreased by Rs.524.55 lakhs (7.82%) compared to previous year.
Depreciation for the year was higher at Rs.2,837.77 lakhs as compared to Rs.2,765.94 lakhs for the previous year due to additions to fixed assets as part of the planned renovations at key properties.
Finance cost for the year ended March 31, 2019 at Rs.2,718.05 lakhs was lower than previous year by Rs.370.54 lakhs due to full repayment of rupee term loan with the proceeds from sale of business undertaking.
The Profit Before Tax for the year ended March 31, 2019 amounted to Rs.10,242.35 lakhs as against a profit of Rs.852.87 lakhs in the previous year.
The tax expense (including deferred tax) for the year ended March 31, 2019 amounted to Rs.1,298.15 lakhs. The Profit After Tax for the year ended March 31, 2019 stood at Rs.8,944.20 lakhs as against a profit of Rs.599.74 lakhs of the previous year.
Debenture Redemption Reserve (DRR) available at the year ended March 31, 2019 amounted to Rs.5,463.00 lakhs after the transfer of Rs.2,810.59 lakhs to the DRR during the year. No transfer was made to General Reserve during the year ended March 31, 2019.
The Company achieved a consolidated turnover of Rs.35,475.80 lakhs for the year ended March 31, 2019, a decrease of Rs.751.53 lakhs (2.07%) as compared to Rs.36,227.33 lakhs in the previous year. The Consolidated Profit Before Tax for the year ended March 31, 2019 amounted to Rs.10,002.04 lakhs as against a consolidated profit of Rs.186.83 lakhs in the previous year.
A detailed analysis of the operating results is provided in the Management Discussion and Analysis Report.
Business Overview
India continued to build its lead as the fastest-growing economy in the world with 7.0% growth in GDP during FY 2018 -19. An improved private consumption (up from mid-single digits in the previous year to high single digits in FY 2018-19) and steady construction activity were other enablers to this growth. Domestic consumption is expected to grow into a $6 trillion opportunity by 2030 (Source: WEF Future of Consumption in Fast-Growth Consumer Markets: India, January 2019).
Travel and tourism industry contributed 9.2% to Indiaâs GDP and registered a growth of 6.7% in 2018 (Source: WTTC). The industry supported 43 million jobs in the country (8.1% of total employment). India offers a diverse portfolio of niche tourism products, including cruises; adventure; medical; wellness; sports; meetings, incentives, conventions and exhibitions (MICE); eco-tourism; films; rural and religious tourism. The country has been recognised as a destination for spiritual tourism for domestic and international tourists. Besides, the introduction of a new category of visaâthe medical visa or M visaâis expected to encourage medical tourism in India. A detailed overview on the companyâs business is provided in the Management Discussion and Analysis Report.
Sale of Business Division
During the year the Company sold its hotel unit at Visakhapatnam, viz., The Gateway Hotel, Beach Road, Visakhapatnam to Varun Hospitality Private Limited (VHPL) for a consideration of Rs.120.10 crores. The Hotel unit will be continued to be managed by The Indian Hotels Company Limited (IHCL) under a fresh Hotel Operating Agreement executed between IHCL and VHPL.
Effective April 01, 2019, the Company ceased to operate its Hotel unit at Trivandrum viz., Vivanta By Taj Trivandrum (VBT Trivandrum) consequent to the termination of the licensing arrangement in respect of the hotel property by its new owners to undertake renovation of the hotel property.
Dividend
On account of improved performance and Profit after Tax reported by your Company during the current year, the Board of Directors recommend a dividend at the rate of 50% i.e. Rs.0.50 per share (Previous Year - Nil). The dividend on equity shares, if approved by the Members, would involve a cash payout of Rs.892.99 lakhs as dividend and dividend distribution tax of Rs.183.56 laks. The dividend pay-out is in accordance with the Companyâs dividend distribution policy.
Dividend Distribution Policy
Your Company has formulated and adopted a Dividend Distribution Policy as envisaged under Regulation 43A of the SEBI (Listing Obligations and Disclosures) Regulations, 2015 on voluntary basis as part of its corporate governance practices. The policy is given in the Annexure 3 to this report and is also available on the Companyâs website, at http://orientalhotels.co.in/wp-content/uploads/2017/05/0HL_Dividend _Distribution_Policy.pdf.
Transfer to Reserves
The Board of Directors of your Company proposed to transfer Rs.2,810.59 lakhs (previous year Rs.646.16 lakhs) to Debenture Redemption Reserve. Further no amount is proposed for transfer to the General Reserve. An amount of Rs.5,461.31 lakhs is proposed to be retained in the profit and loss account.
Share Capital
The Paid up equity share Capital of the Company as on March 31, 2019 was Rs.1,786 lakhs comprising of 17,85,99,180 Equity Shares having face value of Rs.1 each. The Company has not issued any equity shares during the financial year 2018-19.
Borrowings
The Companyâs borrowings as at March 31, 2019 on a standalone and consolidated basis stood at Rs.24,280.51 lakhs as against Rs.31,325.99 lakhs as at March 31, 2018.
Non-Convertible Debentures (NCDs)
As on March 31, 2019, the outstanding NCDs amounts to Rs.20,000 lakhs comprising of 1000, âSeries-A Senior Secured Redeemable Non-Convertible Debenturesâ having of face value Rs.10 lakhs aggregating to Rs.10,000 lakhs with coupon rate of 10.25% per annum and 1000, âSeries-B Senior Secured Redeemable Non-Convertible Debenturesâ having of face value Rs.10 lakhs aggregating to Rs.10,000 lakhs with coupon rate of 2% at an yield to maturity rate of 10.25% per annum. The NCDs are listed in the Wholesale Debt Market (WDM) segment at National Stock Exchange of India Ltd. During the year the Company has neither issued nor redeemed any NCDs. The NCDs are due for redemption on November 21, 2019.
Fixed Deposits
The Company does not accept and / or renew fixed deposit from the general public and / or shareholders. Acceptance and renewal of fixed deposits were discontinued by the Company with effect from February 17, 2003 and July 2009 respectively. There were no amount outstanding as unclaimed deposit as on March 31, 2019 as such deposits had been transferred to the Investor Education and Protection Fund (IEPF) on the respective due dates.
Particulars of Loans, Guarantees and Investments of the Company
The Company has not given any loans or provided any security or guarantee during the financial year under review. The particulars of existing loans and investments have been disclosed under notes to financial statements.
Subsidiaries, Joint Ventures and Associate Companies
The Consolidated Financial Statements of the Company and its Subsidiary, Associates and Joint Venture are prepared in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under Companies (Indian Accounting Standards) Rules, 2015 of the Companies Act, 2013, and form part of the Annual Report.
In accordance with Section 136 of the Companies Act, 2013, the audited financial statements, including the Consolidated Financial Statements and related information of the Company and audited accounts of the subsidiary, can be accessed on Companyâs website at the link: http://www.orientalhotels.co.in/investors/financial-results/annual/. Pursuant to Section 129(3) of the Companies Act, 2013 read with Rule 5 of Companies (Accounts) Rules, 2014, salient features of the financial statements of the Companyâs Subsidiary/Joint Venture/Associates in Form AOC - 1 is furnished in Annexure - 1.
Related Party Transactions
In line with the requirements under the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 governing Related Party Transactions (RPTs), your Company has formulated a policy on dealing with RPTs which can be accessed on Companyâs website at the link: http://orientalhotels.co.in/wp-content/uploads/2017/01/RELATED-PARTY-TRANSACTI0NS-P0LICY.pdf. The Policy intends to ensure that proper reporting, approval and disclosure processes are in place for all transactions between the Company and Related Parties.
All RPTs including Material Related Party Transactions that were entered into during the financial year were in the ordinary course of business and at Armâs length.
All Related Party Transactions are placed before the Audit Committee for approval. A statement containing the details of all Related Party Transactions has been placed before the Audit Committee for its review on a quarterly basis. Approval of shareholders had been obtained for all material RPTs.
Report in respect of RPTs which are material in nature in form No. AOC-2 pursuant to provisions of Section 134(3)(h) and Rule 8 of Companies (Accounts) Rules, 2014 is provided in Annexure - 2 and forms part of this report. Disclosures as required under Ind AS 24 in respect of RPTs have been made under Note 41 of the Notes to the standalone financial statements.
Directorâs Responsibility Statement
Based on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the Internal, Statutory and Secretarial Auditors including audit of internal financial controls over financial reporting by the Statutory Auditors and the reviews performed by Management and the relevant Board Committees, including the Audit Committee, the Board is of the opinion that the Companyâs internal financial controls were adequate and effective during the financial year 2018-19.
Accordingly, pursuant to Section 134(3) (c) and 134(5) of the Act, the Board of Directors to the best of their knowledge and ability, confirm that:-
i. in the preparation of the annual accounts for the year ended March 31, 2019, the applicable accounting standards have been followed and that there are no material departures;
ii. the Directors have selected such accounting policies and applied them consistently made judgments and estimates that are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company as at March 31, 2019 and of the profit of the Company for that year ended on that date;
iii. the Directors have taken proper and sufficient care for maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
iv. the Directors had prepared the annual accounts on a going concern basis;
v. the Directors laid down the internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively;
vi. the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
Directors and Key Managerial Personnel (KMP)
During the year, the Board of Directors based on the recommendations of Nomination and Remuneration Committee (NRC) appointed Mr. Harish Lakshman (DIN: 00012602) as an Additional Director under the category of Independent Director with effect from May 09, 2018. Subsequently, he was regularized as an Independent Director for a period of 5 years, in the Annual General Meeting of the Company held on July 25, 2018.
Dr. Gopalan Sundaram, an Independent Director on the Board of the Company, resigned with effect from April 01, 2019 to adhere with the age limit prescribed under the TATA Governance Guidelines for Board Effectiveness.
Mr. Rajneesh Jain, Chief Financial Officer of the Company, resigned with effect from February 04, 2019 to pursue new opportunities. The Board, upon resignation of Mr. Rajneesh Jain and based on the recommendations of Nomination and Remuneration Committee (NRC) designated Mr. Sreyas Arumbakkam, who has been associated with the Taj Group in various roles since June 2011, as the Chief Financial Officer with effect from February 05, 2019.
The Board of Directors on recommendation of the NRC has re-appointed Mr. Pramod Ranjan (DIN : 00887569) as Managing Director and Chief Executive Officer of the Company for a period of three (3) years with effect from November 11, 2018 subject to approval of members.
In accordance with provisions under the Companies Act, 2013 and Articles of Association of the Company, Mr. D. Varada Reddy (DIN.:00052200) and Mr. D. Vijayagopal Reddy (DIN.:00051554), Directors of the Company retire by rotation at the ensuing Annual General Meeting. Mr. Dodla Varada Reddy, has expressed his desire not to offer himself for re-appointment in the AGM, owing to his pre-occupation. He has been serving on the Board since 2005. During his tenure of office, he has made distinct and immense contribution to the deliberations of the meetings of the Board in general and for the growth of the Company in particular during his tenure as Managing Director. He is liable to retire by rotation and due for re-appointment in the AGM, in terms of the applicable provisions of the Companies Act, 2013. The Directors place on record the valuable guidance, support and advice extended by him during his tenure. Mr. Dodla Vijayagopal Reddy being eligible offer himself for re-appointment.
Independent Directorsâ Declaration
The Independent Directors have submitted a declaration that each of them meet the criteria for independence as laid down under Section 149(6) of the Act read with Rules framed thereunder and Regulation 16 of the Listing Regulations and that they are not aware of any circumstance or situation, which exists or is anticipated, that could impair or impact their ability to discharge their duties with an objective independent judgment and without any external influence as required under Regulation 25 of Listing Regulations.
Board and Committee Meetings
The Board of Directors has met seven (7) times during the year and the intervening period between the Meetings was within the period prescribed under the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Details of the composition of the Board and its Committees and of the meetings held and attendance of the Directors at such meetings are provided in the Corporate Governance Report.
Governance Guidelines for Board Effectiveness
The Company has adopted the Governance Guidelines for Board Effectiveness which inter alia, cover aspects related to composition and role of the Board, Chairman and Directors, Board diversity, definition of independence, Directorâs term, retirement age and Committees of the Board. It also covers aspects relating to nomination, appointment, induction and development of Directors, Directorâs remuneration, Code of Conduct, Board Effectiveness Review and mandates of Board Committees.
Board Evaluation
The Company has devised a Policy for performance evaluation of the Board, Committees and other individual Directors (including Independent Directors) which include criteria for performance evaluation of Non-executive Directors and Executive Directors. The evaluation process inter alia considers attendance of Directors at Board and committee meetings, acquaintance with business, communicating inter-se board members, effective participation, domain knowledge, compliance with code of conduct etc.
In a separate meeting of Independent Directors, performance of Non-Independent Directors, performance of the Board as a whole and performance of the Chairman was evaluated, taking into account the views of executive and non-executive directors.
Remuneration Policy
The Company had adopted a Remuneration Policy for the Directors, KMPs and other employees, pursuant to the provisions of the Act and Listing Regulations.
The key principles governing the Companyâs Remuneration Policy are as follows:
Remuneration for Independent Directors and Non-Independent Non-Executive Directors
- Independent Directors (ID) and Non-Independent Non-Executive Directors (NINED) may be paid sitting fees for attending the meetings of the Board and of Committees of which they may be members, and receive commission within regulatory limits, as recommended by the NRC and approved by the Board.
- Overall remuneration should be reasonable and sufficient to attract, retain and motivate Directors aligned to the requirements of the Company, taking into consideration the challenges faced by the Company and its future growth imperatives.
- Remuneration paid should be reflective of the size of the Company, complexity of the sector/industry/Companyâs operations and the Companyâs capacity to pay the remuneration and be consistent with recognized best practices.
- The aggregate commission payable to all the NEDs and IDs will be recommended by the NRC to the Board based on Company performance, profits, return to investors, shareholder value creation and any other significant qualitative parameters as may be decided by the Board. The NRC will recommend to the Board the quantum of commission for each Director based upon the outcome of the evaluation process which is driven by various factors including attendance and time spent in the Board and Committee Meetings, individual contributions at the meetings and contributions made by Directors other than in meetings.
- The remuneration payable to Directors shall be inclusive of any remuneration payable for services rendered in any other capacity, unless the services rendered are of a professional nature and the NRC is of the opinion that the Director possesses requisite qualification for the practice of the profession.
Remuneration for Managing Director (MD)/ Key Managerial Personnel (KMP)/ rest of the Employees
- The extent of overall remuneration should be sufficient to attract and retain talented and qualified individuals suitable for every role. Hence remuneration should be market competitive, driven by the role played by the individual, reflective of the size of the Company, complexity of the sector/ industry/ Companyâs operations and the Companyâs capacity to pay, consistent with recognized best practices and aligned to any regulatory requirements.
- Basic/fixed salary is provided to all employees to ensure that there is a steady income in line with their skills and experience. In addition, the Company provides employees with certain perquisites, allowances and benefits to enable a certain level of lifestyle and to offer scope for savings. The Company also provides all employees with a social security net subject to limits, by covering medical expenses and hospitalization through re-imbursements or insurance cover and accidental death etc. The Company provides retirement benefits as applicable.
- In addition to the basic / fixed salary, benefits, perquisites and allowances as provided above, the Company provides MD, such remuneration by way of commission, calculated with reference to the net profits of the Company in a particular financial year, as may be determined by the Board, subject to the overall ceilings stipulated in Section 197 of the Act. The specific amount payable to the MD would be based on performance as evaluated by the NRC and approved by the Board.
- The Company provides the management employees a performance linked bonus. The performance linked bonus would be driven by the outcome of the performance appraisal process and the performance of the Company.
It is affirmed that the remuneration paid to Directors, KMP and all other employees is as per the Remuneration Policy of the Company.
Policies
The SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and and SEBI (Listing Obligations and Disclosure Requirements) (Amendment) Regulations, 2018 mandate the formulation of certain policies for all listed companies. All our corporate governance policies are available on our website (http://orientalhotels.co.in/investors/ policies). The policies are reviewed periodically by the Board and updated based on need and new compliance requirement.
In addition to the Code of Conduct, key policies that have been adopted by the Company are as follows:
|
Name of the Policy |
Brief Description |
Web link |
|
Whistleblower Policy (Policy on vigil mechanism) |
The Company has adopted the whistleblower mechanism for directors and employees to report concerns about unethical behavior, actual or suspected fraud, or violation of the Companyâs code of conduct and ethics. The Whistleblower policy was amended in line with SEBI (Prohibition of Insider Trading) (Amendment) Regulations, 2018, enabling employees to report instances of leak of Unpublished Price Sensitive Information (UPSI). |
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|
uploads/2017/01/WHISTLE-BLOWER-POLICY- AND-VIGIL-MECHANISM.Ddf |
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|
Policy on Material Subsidiaries |
The policy is used to determine the material subsidiaries and material non-listed Indian subsidiaries of the Company and to provide the governance framework for them. The Policy on Material Subsidiaries was amended in line with the requirements of SEBI (Listing Obligations and Disclosure Requirements) (Amendment) Regulations, 2018. The key changes include, inter alia, the definition of material subsidiary. |
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|
uploads/2017/01/POLICY-FOR-DETERMINING- MATERIAL-SUBSIDIARIES.pdf |
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Related Party Transaction Policy |
The policy regulates all transactions between the Company and its related parties. The Related Party Transaction Policy was amended in line with the requirements of SEBI (Listing Obligations and Disclosure Requirements) (Amendment) Regulations, 2018. The key changes include, inter alia, threshold limits for determining materiality. |
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|
uploads/2017/01/RELATED-PARTY- TRANSACTIONS-POLICY.pdf |
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|
Insider Trading Policies |
The policy provides the framework in dealing with securities of the Company. The Insider Trading Policies were amended in line with SEBI (Prohibition of Insider Trading) (Amendment) Regulations, 2018. The key changes include, inter alia, change in the definition of designated persons, maintenance of digital database, internal controls, and policy and procedure for inquiry in case of leak of UPSI. Further policy on determination of legitimate purpose was also adopted by the Board. |
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uploads/2017/02/CODE-OF-CONDUCT-FOR- PREVENTION-OF-INSIDER-TRADING.pdf |
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Code of Corporate Disclosure Practices |
This policy provides for clear guidelines for timely, adequate and universal dissemination of information and disclosure of Unpublished Price Sensitive Information |
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|
uploads/2017/01/CODE-OF-CORPORATE- DISCLOSURE-PRACTICES.pdf |
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Policy for Determining Materiality for Disclosures |
This policy governs the determination of materiality of an event or information for the purpose of disclosures to be made by the Company to the Stock Exchanges. This policy has to be read in congestion with the code of corporate disclosure practices framed by the company under Insider Trading Regulation. |
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uploads/2017/01/POLICY-ON-MATERIALITY-OF- EVENTS.pdf |
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Website Archival Policy |
The policy deals with the retention and archival of corporate records from the website of the Company. |
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uploads/2017/02/WEBSITE-ARCHIVAL-POLICY.pdf |
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Dividend Distribution Policy |
Guidelines for the Board and the Management in declaration and distribution of dividend, with a view to ensure fairness, transparency, sustainability and consistency in the decision for distributing profits to shareholders. |
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|
uploads/2017/05/DHL Dividend Distribution Policy.pdf |
Internal Controls Systems and Adequacy
The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations. The scope and authority of the Internal Audit function is well defined in the organization. To maintain its objectivity and independence, the Internal Audit function reports to the Chairman of the Audit Committee of the Board.
The Internal Audit Department monitors and evaluates the efficacy and adequacy of internal control systems of the Company, its compliance with operating systems, accounting procedures and policies at all locations of the Company. Based on the report of Internal Audit function, process owners undertake corrective action in their respective areas and thereby strengthen the controls. Significant audit observations and corrective actions suggested are presented to the Audit Committee of the Board.
Internal financial controls means the policies and procedures adopted by the Company for ensuring the orderly and efficient conduct of its business, including adherence to Companyâs policies, safeguarding of its assets, prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information. The internal financial controls as laid down are adequate and were operating effectively during the year under review. As required under Section 143 of the Companies Act, 2013, the Statutory Auditors have evaluated and expressed satisfaction in their opinion on the Companyâs internal financial controls over financial reporting based on an audit.
Audit Committee
The details pertaining to the composition of the Audit Committee and the number of meetings etc., are included in the Corporate Governance Report, which forms part of this report.
Auditors and Auditorâs Report
(i) Statutory Auditors:
At the AGM held on July 25, 2017, the Members approved the appointment of M/s PKF Sridhar and Santhanam LLP, Chartered Accountants, (Firm Registration No. 003990S/S200018) as Statutory Auditors for a term of 5 years Commencing from July 25, 2017. The Statutory Auditor has furnished a certificate of their eligibility and consent Under Section 139(1) and 141 of the Act and Rules framed thereunder for their continuance as Statutory Auditors of the Company for Financial Year 2019-20.
The Report of the Statutory Auditor forms part of the Annual Report and contains an Unmodified Opinion without any qualification, reservation, adverse remark or disclaimer. Further the Statutory Auditors of the Company have not reported any fraud as specified in Section 143(12) of the Act.
(ii) Secretarial Auditors:
Pursuant to provisions under Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors of the Company had appointed M/s S. Sandeep & Associates, Company Secretaries to undertake the Secretarial Audit of the Company for the financial year ended March 31, 2019. The Secretarial Audit Report is attached as Annexure 4. The Secretarial Audit Report does not contain any qualification, reservation, adverse remark or disclaimer.
Risk Management
The policy framework enables the Company to identify and evaluate risks and opportunities. This framework seeks to create transparency, minimize adverse impact on business objective and enhance the Companyâs competitive advantage. The risk framework defines the risk management approach across the Company at various levels including documentation and reporting.
The Policy framework enables the Company to evaluate risks, appropriately rate these risks and grade the same in accordance with their potential impact and likelihood. The two key components of risks are the probability (likelihood) of occurrence and the impact (consequence) of occurrence, if the risk occurs. Risk is analyzed by combining estimates of probability and impact in the context of existing control measures.
The Company has laid down procedures to inform Audit Committee as well as the Board of Directors about the risk assessment and management procedures and status. These procedures are periodically reviewed to ensure that the executive management monitors and controls risks.
Vigil Mechanism/Whistle Blower Policy
The Company has adopted a Whistle Blower Policy to provide a mechanism for the Directors and employees to report genuine concerns about any unethical behaviour, actual or suspected fraud or violation of the Companyâs Code of Conduct. The provisions of this policy are in line with the provisions of Section 177 (9) of the Act and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The whistle blower policy can be accessed on the Companyâs website at the link: http://orientalhotels.co.in/wp-content/ uploads /2017/01/ WHISTLE - BLOWER-POLICY-AND-VIGIL-MECHANISM.pdf
Corporate Social Responsibility (CSR)
Your Company works towards facilitating sustainable livelihoods by providing adequate opportunities to the youth of rural and less-privileged sectors of society. Your Company hotel units, which are in smaller cities, are engaged in community initiatives such as education and nutritional awareness.
The Company does not fall under the category of companies required to spend the prescribed amount towards CSR activities due to inadequate profits. However, the Company had spent Rs.50.14 lakhs during the financial year 2018 -19 on a voluntary basis, through its various hotel units towards education and other social welfare measures which includes payment of school fees, distributing rice to the fishermanâs family during the non-fishing period etc.
Significant and Material Orders passed by the Regulators
During the year under review, no significant and material orders were passed by the regulators or courts or tribunals impacting the going concern status and future operation of the Company.
Material Changes and Commitments affecting the Financial Position
There have been no material changes and commitments, affecting the financial position of the company have occurred between the end of the financial year 2018-19 and the date of this report.
Transfer of shares to Investor Education and Protection Fund (IEPF)
Pursuant to the applicable provisions of the Companies Act, 2013, read with the IEPF Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 (âthe Rulesâ), all unpaid or unclaimed dividends are required to be transferred by the Company to the IEPF established by the Central Government, after the completion of seven years. Further, according to the Rules, the shares in respect of which dividend has not been paid or claimed by the shareholders for seven consecutive years or more shall also be transferred to the demat account created by the IEPF Authority. During the year, the Company has transferred the unclaimed and unpaid dividends of Rs.9,90,328. Further, 34,131 corresponding shares on which dividends were unclaimed for seven consecutive years were transferred as per the requirements of the IEPF rules. The details of which are provided on our website, at http://orientalhotels.co.in/investors/unclaimed-amounts/transfers-to -iepf/
The Board has appointed Mr. Tom Antony, Company Secretary, as the Nodal Officer to ensure compliance with the IEPF Rules. Details of Nodal Officer is placed on the website of the Company and can be accessed at http:// orientalhotels.co.in/investors/unclaimed-amounts/transfers-to -iepf/
Listing
The Equity Shares of your Company are listed at BSE Limited, Mumbai (BSE) and the National Stock Exchange of India Limited, Mumbai (NSE) and the Global Depositary Receipts (GDRs) are listed at Luxembourg Stock Exchange. NCDâs issued by the Company are listed at the Wholesale Debt Market (WDM) segment of NSE. The Listing fees to these Stock Exchanges and custodian fees to depositories viz., NSDL and CDSL have been paid by the Company for the financial year 2018-19.
Corporate Governance Report, Management Discussion & Analysis Report
As required under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 the report on Management Discussion & Analysis, Corporate Governance as well as the Auditorâs certificate on the compliance of Corporate Governance and a certificate from Practicing Company Secretary under Clause 10 of Part C of Sechedule V of LODR thereon form part of the Annual Report.
Compliance with Secretarial Standards
During Financial Year 2018-19, the Company has complied with relevant provisions of Secretarial Standards issued by the Institute of Company Secretaries of India on Board Meetings and General Meetings.
Conservation of Energy, Technology Transfer and Foreign Exchange Earnings and outgo
The information on conservation of energy, technology absorption and foreign exchange earnings and outgo as required under Section 134(3)(m) of the Act, read with Rule 8 of the Companies (Accounts) Rules, 2014 is furnished in the Annexure 5 to this report:
Maintenance of Cost Records
Maintenance of cost records as specified by the Central Government under sub-section (1) of section 148 of the Companies Act, 2013, is not applicable to the Company.
Particulars of Employees & related disclosures
The information required under section 197(12) of the Act, read with rule 5 (1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is furnished in the Annexure 6 to this report.
The statement containing information as required under Rule 5 (2) and (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 forms part of this Annual Report. In terms of the first proviso to Section 136 of the Act, the Report and accounts are being sent to the shareholders excluding the aforesaid statement which is open for inspection at the Registered Office of the Company. Any shareholder interested in obtaining the same may write to the Company Secretary at the Registered Office of the Company.
Disclosures as per the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.
The Company has zero tolerance for sexual harassment at its workplace and has adopted a Policy on prevention, prohibition and redressal of sexual harassment at the workplace in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules thereunder for prevention and redressal of complaints of sexual harassment at workplace.
Further the company has complied with provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 During the year under review the Company has received four (4) complaints on sexual harassment. Except one (1) remaining complaints were resolved.
Extract of Annual Return
Pursuant to Section 92(3) of the Companies Act, 2013 and Rule 12(1) of the Companies (Management and Administration) Rules, 2014, the Extract of the Annual Return in Form MGT 9 is attached as Annexure 7 to this report. Annual return of 2017-18 can be accessed via web link: http://orientalhotels.co.in/wp-content/uploads/2019/06/ Annual-Return_2017-18.pdf
Acknowledgement
The Directors thank the Companyâs employees, customers, vendors, investors and bankers for their continued support during the year.
For and behalf of the Board
Place : Chennai Puneet Chhatwal
Date : April 25, 2019 (DIN: 07624616)
Chairman
Mar 31, 2018
BOARDâS REPORT To the Members
The Board of Directors are pleased to present the 48th Annual Report of the Company along with the audited financial statements (standalone and consolidated) for the financial year ended March 31, 2018.
Financial Highlights
Rs, in Lakhs
|
Standalone |
Consolidated |
||||
|
Particulars |
Year ended March 31, 2018 |
Year ended March 31, 2017 |
Year ended March 31, 2018 |
Year ended March 31, 2017 |
|
|
Total Income |
36,888 |
34,460 |
36,227 |
33,974 |
|
|
Profit before Depreciation, Finance |
6,707 |
5,873 |
6,040 |
5,376 |
|
|
Cost, Tax and Exceptional Items |
|||||
|
Less: Depreciation & Amortization |
2,766 |
2,498 |
2,766 |
2,498 |
|
|
Less: Finance Cost |
3,089 |
3,219 |
3,089 |
3,219 |
|
|
Add: Exceptional Items (net) |
1 |
42 |
1 |
42 |
|
|
Profit/(Loss) before Tax Tax Expense: |
853 |
198 |
186 |
(299) |
|
|
- Current Tax |
188 |
180 |
188 |
180 |
|
|
- Deferred Tax |
65 |
(135) |
65 |
(135) |
|
|
Profit/(Loss) after Tax |
600 |
153 |
(67) |
(344) |
|
|
Earnings per share O |
0.34 |
0.09 |
0.34 |
0.28 |
|
State of Companyâs affairs Operating Results
The Company achieved a turnover of Rs,36,888 lakhs for the period ended March 31, 2018, increased by Rs,2,428 lakhs (7 %) as compared to previous year contributed by the increase in both Room Income and F&B Income.
The Profit (EBITDA) before Depreciation, finance cost & Tax for the year ended March 31, 2018 amounted to Rs,6,707 lakhs, increased by Rs,834 lakhs (14 %) as compared to previous year.
Depreciation for the year was higher at Rs,2,766 lakhs as compared to Rs,2,498 lakhs in the previous year due to additions to fixed assets as part of the planned renovations at key properties.
Finance cost for the year ended March 31, 2018 at Rs,3,089 lakhs was lower than previous year by Rs,130 lakhs due to repayment of existing loans in line with the repayment schedule.
The Profit before Tax for the year ended March 31, 2018 amounted to Rs,853 lakhs as against a profit of Rs,198 lakhs of the previous year.
The tax expense (including deferred tax) for the year ended March 31, 2018 amounted to Rs,253 lakhs. The Profit after Tax for the year ended March 31, 2018 stood at Rs,600 lakhs as against a profit of Rs,153 lakhs of the previous year.
Debenture Redemption Reserve (DRR) available at the year ended March 31, 2018 amounted to Rs,2,652 lakhs after the transfer of Rs,646 lakhs to the DRR during the year. No transfer was made to General Reserve during the year ended March 31, 2018.
The Company achieved a consolidated turnover of Rs,36,227 lakhs for the year ended March 31, 2018, an increase of Rs,2,253 lakhs (7%) as compared to Rs,33,974 lakhs in the previous year. The Consolidated Profit before Tax for the year ended March 31, 2018 amounted to Rs,186 lakhs as against a consolidated loss of Rs,299 lakhs of the previous year.
Business Overview
India continues to be among the worldâs fastest growing major economies, despite temporary hiccups caused by demonetization and goods and services tax (GST) implementation. The countryâs GDP growth is pegged at 6.7% in 2017 and is likely to accelerate to 7.4% in 2018 and 7.8% in 2019 on the back of continued traction in private consumption and gradual easing of the teething issues following the implementation of these reforms.
Robust economic growth and buoyant consumer spending across the world was adequately reflected in the performance of the global travel and tourism industry in 2017. According to the World Travel & Tourism Council (WTTC) estimates, the sectorâs direct growth stood at 4.6% in the year and outperformed global economic growth for the seventh year in a row.
In India, the Travel & Tourism sector contributed ''15,239.6 billion (USD 234.0 billion) or 9.4% to Indiaâs GDP in 2017. This sector created 41,622,500 jobs or 8% of total employment (direct and indirect) in the country in the year and this metric could rise by 3.1% in 2018. Visitor exports formed 5.8% of total exports, generating exports worth Rs,1,777.1 billion (USD 27.3 billion). Investments in the sector stood at Rs,2,706.1 billion, representing 6.3% of total investments and can grow by 6.7% in 2018.
Considerable growth in Indiaâs travel and tourism sector has percolated to the hospitality sector as well. The industry has witnessed robust growth in recent years on the back of increased traffic of domestic travellers, rising commercial development and foreign tourist arrivals, a growing airline industry and government-led initiatives aiming to stimulate the sector. With a positive outlook of the Indian hospitality sector and the strong brand it is associated with, your company is well positioned to benefit from the growth in this sector.
Dividend
Considering the statutory requirement to maintain the Debenture Redemption Reserve (DRR) to the tune of 25% of value of debentures and the inadequacy of profits to maintain the prescribed DRR as on March 31, 2018, the Board of Directors has not recommended any dividend on equity shares for the financial year ended on March 31, 2018.
Dividend Distribution Policy
Your Company has formulated and adopted a Dividend Distribution Policy as envisaged under Regulation 43A of the SEBI (Listing Obligations and Disclosures) Regulations, 2015 on voluntary basis as part of its corporate governance practices.
The policy is given in the Annexure 3 to this report and is also available on the Companyâs website, at http:// orientalhotels.co.in/wp-content/uploads/2017/05/0HL_Dividend _Distribution_Policy.pdf
Share Capital
The Paid up Equity Share Capital of the Company as on March 31, 2018 was Rs,1,786 lakhs comprising of 17,85,99,180 Equity Shares having face value of Rs,1 each. The Company has not issued any equity shares during the financial year 2017-18.
Borrowings
The Companyâs borrowings as at March 31, 2018 on a standalone basis stood at Rs,31,326 lakhs as against Rs,32,232 lakhs as at March 31, 2017.
Non-Convertible Debentures (NCDs)
As on March 31, 2018, the outstanding NCDs amounts to Rs,20,000 lakhs comprising of 1000, âSeries-A Senior Secured Redeemable Non-Convertible Debenturesâ having face value Rs,10 lakhs aggregating to Rs,10,000 lakhs with coupon rate of 10.25% per annum and 1000, âSeries-B Senior Secured Redeemable Non-Convertible Debenturesâ having face value ''10 lakhs aggregating to Rs,10,000 lakhs with coupon rate of 2% at an yield to maturity rate of 10.25% per annum. The NCDs are listed in the Wholesale Debt Market (WDM) segment at National Stock Exchange of India Ltd. During the year the Company has neither issued nor redeemed any NCDs.
Fixed Deposits
The Company does not accept and / or renew fixed deposit from the general public and / or shareholders. Acceptance and renewal of fixed deposits were discontinued by the Company with effect from February 17, 2003 and July 2009 respectively. There were no amount outstanding as unclaimed deposit as on March 31, 2018 as such deposits had been transferred to the Investor Education and Protection Fund (IEPF) on the respective due dates.
particulars of Loans, Guarantees and Investments of the Company under Section 186 of the Act
The Company has not given any loans or provided any security during the financial year under review. The particulars of existing loans and investments have been disclosed under notes to financial statements.
Subsidiaries, Joint Ventures and Associate Companies
The Consolidated Financial Statements of the Company and its Subsidiary, Associates and Joint Venture are prepared in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under Companies (Indian Accounting Standards), Rules, 2015 of the Companies Act, 2013, and form part of the Annual Report.
In accordance with Section 136 of the Companies Act, 2013, the audited financial statements, including the Consolidated Financial Statements and related information of the Company and audited accounts of the subsidiary, can be accessed on Companyâs website at the link: http://www.orientalhotels.co.in/investors/financial-results/annual/.
Pursuant to Section 129(3) of the Companies Act, 2013 read with Rule 5 of Companies (Accounts) Rules, 2014, salient features of the financial statements of the Companyâs Subsidiary / Joint Venture / Associates in Form AOC - 1 is furnished in Annexure - 1.
Related Party Transactions
In line with the requirements under the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 governing Related Party Transactions (RPTs), your Company has formulated a policy on dealing with RPTs which can be accessed on Companyâs website at the link: http://orientalhotels.co.in/wp-content/uploads/2017/01/RELATED-PARTY-TRANSACTI0NS-P0LICY.pdf. The Policy intends to ensure that proper reporting, approval and disclosure processes are in place for all transactions between the Company and Related Parties.
All RPTs including Material Related Party Transactions that were entered into during the financial year were in the ordinary course of business and at armâs length.
All Related Party Transactions are placed before the Audit Committee for approval. A statement containing the details of all Related Party Transactions has been placed before the Audit Committee for its review on a quarterly basis. Approval of shareholders had been obtained for all material RPTs.
Report in respect of RPTs which are material in nature in form No. AOC-2 pursuant to provisions of Section 134(3)(h) and Rule 8 of Companies (Accounts) Rules, 2014 is provided in Annexure - 2 and forms part of this report.
Disclosures as required under Ind-AS 24 in respect of RPTs have been made under Note 41 of the Notes to the standalone financial statements.
Directorâs Responsibility Statement
Based on the framework of internal financial controls, compliance systems established and maintained by the Company, work performed by the internal, statutory and secretarial auditors including audit of internal financial controls over financial reporting by the statutory auditors and the reviews performed by Management and the relevant Board Committees, including the Audit Committee, the Board is of the opinion that the Companyâs internal financial controls are adequate and effective during the financial year 2017 - 18.
Accordingly, pursuant to Section 134(3) (c) and 134(5) of the Act, the Board of Directors to the best of their knowledge and ability, confirm that:-
i. in the preparation of the annual accounts for the year ended March 31, 2018, the applicable accounting standards have been followed and that there are no material departures;
ii. the Directors have selected such accounting policies and applied them consistently made judgments and estimates that are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company as at March 31, 2018 and of the profit of the Company for that year ended on that date;
iii. the Directors have taken proper and sufficient care for maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
iv. the Directors had prepared the annual accounts on a going concern basis;
v. the Directors laid down the internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively;
vi. the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.
Directors and Key Managerial Personnel (KMP)
During the year, the Board of Directors based on the recommendations of Nomination and Remuneration Committee (NRC) appointed Mr. Giridhar Sanjeevi (DIN: 06648008) as a Director in the casual vacancy caused by the resignation of Mr. Anil P Goel with effect from July 25, 2017. He holds office upto the date of the forthcoming Annual General Meeting and is further proposed to be appointed as a Non-Executive Director of the Company.
Mr. Rakesh Kumar Sarna, the Non-executive Chairman on the Board of the Company has resigned from the Board with effect from September 30, 2017 due to his resignation from Indian Hotels Company Limited. Consequently based on the recommendation of NRC, Mr. Puneet Chhatwal (DIN: 07624616) is appointed as the Non-Executive Chairman in the place of Mr. Sarna at the board meeting held on January 23, 2018.
The Board of Directors based on the recommendations of NRC appointed Mr. Harish Lakshman (DIN: 00012602) as an Additional Director under the category of Independent Director with effect from May 09, 2018. He holds office upto the date of the ensuing Annual General Meeting and is further proposed to be appointed as Independent Director of the Company for a period of five years with effect from May 09, 2018.
The Company has received declarations from all the Independent Directors confirming that they meet the criteria of independence as prescribed both under the Act and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
In accordance with provisions under the Companies Act, 2013 and Articles of Association of the Company, Mr. Ramesh Doulatram Hariani and Mr. Pramod Ranjan, Directors of the Company retire by rotation at the ensuing Annual General Meeting and being eligible to offer themselves for re-appointment.
Board and Committee Meetings
The Board of Directors has met four (4) times during the year and the intervening period between the Meetings was within the period prescribed under the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Details of the composition of the Board and its Committees and of the meetings held and attendance of the Directors at such Meetings, are provided in the Corporate Governance Report.
Board Effectiveness
The Company has adopted the Governance Guidelines which inter alia, cover aspects related to composition and role of the Board, Chairman and Directors, Board diversity, definition of independence, Directorâs term, retirement age and Committees of the Board. It also covers aspects relating to nomination, appointment, induction and development of Directors, Directorâs remuneration, Code of Conduct, Board Effectiveness Review and mandates of Board Committees.
Board Evaluation
The Company has devised a Policy for performance evaluation of the Board, Committees and other individual Directors (including Independent Directors) which include criteria for performance evaluation of Non-executive Directors and Executive Directors. The evaluation process inter alia considers attendance of Directors at Board and committee meetings, acquaintance with business, communicating inter se board members, effective participation, domain knowledge, compliance with code of conduct etc.
In a separate meeting of Independent Directors, performance of Non-Independent Directors, performance of the Board as a whole and performance of the Chairman was evaluated, taking into account the views of executive and non-executive directors.
Remuneration Policy
The Company had adopted a Remuneration Policy for the Directors, KMP and other employees, pursuant to the provisions of the Act and Listing Regulations.
The key principles governing the Companyâs Remuneration Policy are as follows:
Remuneration for Independent Directors and Non-Independent Non-Executive Directors
- Independent Directors (ID) and Non-Independent Non-Executive Directors (NINED) may be paid sitting fees for attending the meetings of the Board and of Committees of which they may be members, and receive commission within regulatory limits, as recommended by the NRC and approved by the Board.
- Overall remuneration should be reasonable and sufficient to attract, retain and motivate Directors aligned to the requirements of the Company, taking into consideration the challenges faced by the Company and its future growth imperatives.
- Remuneration paid should be reflective of the size of the Company, complexity of the sector/ industry/Companyâs operations and the Companyâs capacity to pay the remuneration and be consistent with recognized best practices.
- The aggregate commission payable to all the NEDs and IDs will be recommended by the NRC to the Board based on Company performance, profits, return to investors, shareholder value creation and any other significant qualitative parameters as may be decided by the Board. The NRC will recommend to the Board the quantum of commission for each Director based upon the outcome of the evaluation process which is driven by various factors including attendance and time spent in the Board and Committee Meetings, individual contributions at the meetings and contributions made by Directors other than in meetings.
- The remuneration payable to Directors shall be inclusive of any remuneration payable for services rendered in any other capacity, unless the services rendered are of a professional nature and the NRC is of the opinion that the Director possesses requisite qualification for the practice of the profession.
Remuneration for Managing Director (MD)/ Key Managerial Personnel (KMP)/ rest of the Employees
- The extent of overall remuneration should be sufficient to attract and retain talented and qualified individuals suitable for every role. Hence remuneration should be market competitive, driven by the role played by the individual, reflective of the size of the Company, complexity of the sector/ industry/ Companyâs operations and the Companyâs capacity to pay, consistent with recognized best practices and aligned to any regulatory requirements.
- Basic/ fixed salary is provided to all employees to ensure that there is a steady income in line with their skills and experience. In addition, the Company provides employees with certain perquisites, allowances and benefits to enable a certain level of lifestyle and to offer scope for savings. The Company also provides all employees with a social security net subject to limits, by covering medical expenses and hospitalization through re-imbursements or insurance cover and accidental death etc. The Company provides retirement benefits as applicable.
- In addition to the basic / fixed salary, benefits, perquisites and allowances as provided above, the Company provides MD, such remuneration by way of commission, calculated with reference to the net profits of the Company in a particular financial year, as may be determined by the Board, subject to the overall ceilings stipulated in Section 197 of the Act. The specific amount payable to the MD would be based on performance as evaluated by the NRC and approved by the Board.
- The Company provides the management employees a performance linked bonus. The performance linked bonus would be driven by the outcome of the performance appraisal process and the performance of the Company.
It is affirmed that the remuneration paid to Directors, KMP and all other employees is as per the Remuneration Policy of the Company.
Policies
The SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 mandated the formulation of certain policies for all listed companies. All our corporate governance policies are available on our website (http:// orientalhotels.co.in/investors/policies). The policies are reviewed periodically by the Board and updated based on need and new compliance requirement.
In addition to the Code of Conduct, key policies that have been adopted by the Company are as follows:
|
Name of the Policy |
Brief Description |
Web link |
|
Whistleblower Policy (Policy on vigil mechanism) |
The Company has adopted the whistleblower mechanism for directors and employees to report concerns about unethical behavior, actual or suspected fraud, or violation of the Companyâs code of conduct and ethics. There has been no change to the Whistleblower Policy adopted by the Company during fiscal 2016-17. |
|
|
uploads/2017/01/WHISTLE-BUDWER- POLICY-AND-VIGIL-MECHANISM.Ddf |
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|
Policy on Material Subsidiaries |
The policy is used to determine the material subsidiaries and material non-listed Indian subsidiaries of the Company and to provide the governance framework for them. |
|
|
uploads/2017/01/POLICY-FOR- DETERMINING-MATERIAL-SUBSIDIARIES.pdf |
||
|
Related Party Transaction Policy |
The policy regulates all transactions between the Company and its related parties |
|
|
uploads/2017/01/RELATED-PARTY- TRANSACTIONS-POLICY.pdf |
|
Code of Conduct for Prevention of Insider Trading |
The policy provides the framework in dealing with securities of the Company. |
|
|
uploads/2017/02/C0DE-0F-C0NDUCT-F0R- PREVENTION-OF-INSIDER-TRADING.Ddf |
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Code of Corporate Disclosure Practices |
This provides clear guidelines for timely, adequate and universal dissemination of information and disclosure of Unpublished Price Sensitive Information |
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|
uploads/2017/01/CODE-OF-CORPORATE- DISCLOSURE-PRACTICES.pdf |
||
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Policy for Determining Materiality for Disclosures |
This policy governs the determination of materiality of an event or information for the purpose of disclosures to be made by the Company to the Stock Exchanges. This policy has to be read in congestion with the code of corporate disclosure practices framed by the company under Insider Trading Regulation |
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unloads/2017/01/POLICY-ON-MATERIALITY- OF-EVENTS.pdf |
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Website Archival Policy |
The policy deals with the retention and archival of corporate records from the website of the Company. |
|
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uploads/2017/02/WEBSITE-ARCHIVAL- POLICY.pdf |
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Dividend Distribution Policy |
Guidelines for the Board and the Management in declaration and distribution of dividend, with a view to ensure fairness, transparency, sustainability and consistency in the decision for distributing profits to shareholders. |
|
|
uploads/2017/05/OHL Dividend Distribution Policv.pdf |
Internal Controls Systems and Adequacy
The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations. The scope and authority of the Internal Audit function is well defined in the organization. To maintain its objectivity and independence, the Internal Audit function reports to the Chairman of the Audit Committee of the Board.
The Internal Audit Department monitors and evaluates the efficacy and adequacy of internal control systems of the Company, its compliance with operating systems, accounting procedures and policies at all locations of the Company. Based on the report of Internal Audit function, process owners undertake corrective action in their respective areas and thereby strengthen the controls. Significant audit observations and corrective actions suggested are presented to the Audit Committee of the Board.
Internal financial controls means the policies and procedures adopted by the Company for ensuring the orderly and efficient conduct of its business, including adherence to Companyâs policies, safeguarding of its assets, prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information. The internal financial controls as laid down are adequate and are operating effectively during the year under review. As required under Section 143 of the Companies Act, 2013, the Statutory Auditors have evaluated and expressed satisfaction in their opinion on the Companyâs internal financial controls over financial reporting based on an audit.
Audit Committee
The details pertaining to the composition of the Audit Committee are included in the Corporate Governance Report, which is a part of this report.
Auditors and Auditorâs Report
(i) Statutory Auditors:
At the AGM held on July 25, 2017, the Members approved the appointment of M/s PKF Sridhar and Santhanam LLP, Chartered Accountants (Firm Registration No.: 003990S/S200018) as statutory auditors for a period of 5 years commencing from the conclusion of Forty-seventh AGM till the conclusion of the Fifty-second AGM subject to the ratification by the Members every year at the Annual General Meeting. As recommended by the Audit Committee, the Board has proposed the ratification of appointment of M/s. PKF Sridhar and Santhanam LLP, Chartered Accountants as statutory auditors for financial year 2018-19. The ratification of appointment by Members is accordingly proposed in the Notice of the ensuing AGM without any further ratification required for the remaining term considering that the statutory requirement of ratification by members at every AGM has been dispensed with under the Companies (Amendment) Act, 2017.
The notes on financial statement referred to in the Auditorâs Report are self-explanatory and do not call for any further comments. The Auditorâs Report does not contain any qualification, reservation, adverse remark or disclaimer which requires any explanation from the Board.
(ii) Secretarial Auditors:
Pursuant to provisions under Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors of the Company had appointed M/s S Sandeep & Associates, Company Secretaries to undertake the Secretarial Audit of the Company for the financial year ended March 31, 2018. The Secretarial Audit Report is attached as Annexure 4. The Secretarial Audit Report does not contain any qualification, reservation, adverse remark or disclaimer.
Risk Management
The policy framework enables the Company to identify and evaluate risks and opportunities. This framework seeks to create transparency, minimize adverse impact on business objective and enhance the Companyâs competitive advantage. The risk framework defines the risk management approach across the Company at various levels including documentation and reporting.
The Policy framework enables the Company to evaluate risks, appropriately rate these risks and grade the same in accordance with their potential impact and likelihood. The two key components of risks are the probability (likelihood) of occurrence and the impact (consequence) of occurrence, if the risk occurs. Risk is analyzed by combining estimates of probability and impact in the context of existing control measures.
The Company has laid down procedures to inform Audit Committee as well as the Board of Directors about the risk assessment and management procedures and status. These procedures are periodically reviewed to ensure that the executive management monitors and controls risks.
Vigil Mechanism / Whistle Blower Policy
The Company has adopted a Whistle Blower Policy to provide a mechanism for the Directors and employees to report genuine concerns about any unethical behavior, actual or suspected fraud or violation of the Companyâs Code of Conduct. The provisions of this policy are in line with the provisions of Section 177 (9) of the Act and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The whistle blower policy can be accessed on the Companyâs website at the link: http://orientalhotels.co.in/wp-content/ uploads /2017/01/ WHISTLE - BLOWER -POLICY- AND- VIGIL-MECHANISM.pdf
Corporate Social Responsibility
Your Company works towards facilitating sustainable livelihoods by providing adequate opportunities to the youth of rural and less-privileged sectors of society. Your Company hotel units, which are in smaller cities, are engaged in community initiatives such as education and nutritional awareness.
The Company does not fall under the category of companies required to spend the prescribed amount towards CSR activities due to inadequate profits. However, the Company had spent ''45 lakhs during the financial year 2017 - 18 on a voluntary basis, through its various hotel units towards education and other social welfare measures which includes payment of school fees, distributing rice to the fishermanâs family during the non-fishing period etc.
Significant and Material Orders passed by the Regulators
During the year under review, no significant and material orders were passed by the regulators or courts or tribunals impacting the going concern status and future operation of the Company.
Transfer of shares to Investor Education and Protection Fund (IEPF)
Pursuant to the applicable provisions of the Companies Act, 2013, read with the IEPF Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 (âthe Rulesâ), all unpaid / unclaimed dividends are required to be transferred by the Company to the IEPF established by the Central Government, after the completion of seven years. Further, according to the Rules, the shares in respect of which dividend has not been paid or claimed by the shareholders for seven consecutive years or more shall also be transferred to the demat account created by the IEPF Authority. Accordingly, the Company has transferred the unclaimed / unpaid dividends. Further, the corresponding shares pertaining to the dividend unclaimed for seven consecutive years had been transferred to the IEPF as per the requirements of the IEPF rules, details of which are provided on our website, at http://orientalhotels.co.in/investors/unclaimed-amounts/ transfers-to -iepf/
Listing
The Equity Shares of your Company are listed at BSE Limited, Mumbai (BSE) and the National Stock Exchange of India Limited, Mumbai (NSE) and the Global Depositary Receipts (GDRs) are listed at Luxembourg Stock Exchange. NCDâs issued by the Company are listed at the Wholesale Debt Market (WDM) segment of NSE. The Listing fees to these Stock Exchanges and custodian fees to depositories viz., NSDL and CDSL have been paid by the Company for the financial year 2018-19.
Corporate Governance Report, Management Discussion & Analysis Report
As required under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 the report on Management Discussion & Analysis, Corporate Governance as well as the Auditorâs certificate on the compliance of Corporate Governance thereon are attached and form part of the Annual Report.
Secretarial Standards
The Directors state that applicable Secretarial Standards, viz., SS-1 and SS-2 have been duly followed by the Company.
Conservation of Energy, Technology Transfer and Foreign Exchange Earnings and outgo
The information on conservation of energy, technology absorption and foreign exchange earnings and outgo as required under Section 134(3)(m) of the Act, read with Rule 8 of the Companies (Accounts) Rules, 2014 is furnished in the Annexure 5 to this report:
Particulars of Employees & related disclosures
The information required under Section 197(12) of the Act, read with Rule 5 (1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is furnished in the Annexure 6 to this report.
The statement containing information as required under Rule 5 (2) and (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 forms part of this Annual Report. In terms of the first proviso to Section 136 of the Act, the Report and accounts are being sent to the shareholders excluding the aforesaid statement which is open for inspection at the Registered Office of the Company. Any shareholder interested in obtaining the same may write to the Company Secretary at the Registered Office of the Company.
Disclosures as per the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013
The Company has zero tolerance for sexual harassment at its workplace and has adopted a Policy on prevention, prohibition and redressal of sexual harassment at the workplace in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules thereunder for prevention and redressal of complaints of sexual harassment at workplace.
During the year under review the Company has received 2 complaints on sexual harassment and both the complaints have been resolved and appropriate action taken, where so necessary and no case remain pending.
Extract of Annual Return
Pursuant to Section 92(3) of the Companies Act, 2013 and Rule 12(1) of the Companies (Management and Administration) Rules, 2014, the Extract of the Annual Return in Form MGT 9 is attached as Annexure 7 to this report.
Acknowledgement
The Directors thank the Companyâs employees, customers, vendors, investors and bankers for their continued support during the year.
For and behalf of the Board
Place : Chennai Puneet Chhatwal
Date : May 09, 2018 (DIN: 07624616)
Chairman
Mar 31, 2017
The Directors are pleased to present the 47th Annual Report of the Company along with the audited financial statements for the financial year ended March 31, 2017.
Pursuant to the notification dated February 16, 2015 issued by the Ministry of Corporate Affairs, the Company has adopted the Indian Accounting Standards (âInd AS â) notified under the Companies (Indian Accounting Standards) Rules, 2015 with effect from April 1, 2016. Financial statements for the year ended and as at March 31, 2016 have been restated to conform to Ind AS.
1. Financial Results
|
Particulars |
Year Ended March 31, 2017 Rs. in Lakhs |
Year Ended March 31, 2016 Rs.in Lakhs |
|
Gross Revenue |
34,460 |
31,626 |
|
Profit before Depreciation, Finance cost and Tax |
5,874 |
3,584 |
|
Profit/(Loss) before Exceptional Items and Tax |
156 |
(1,965) |
|
Exceptional Items (net) |
42 |
(633) |
|
Profit/(Loss) Before Tax |
199 |
(2,598) |
|
Tax Expense: |
|
|
|
-Current Tax |
180 |
105 |
|
-Deferred Tax |
(135) |
(919) |
|
Profit/(Loss) After Tax |
153 |
(1,785) |
|
Earnings per share (Rs.) |
0.09 |
(1.00) |
State of Companyâs affairs Operating Results
The Revenue from operations amounts to Rs.33,349 lakhs for the period ended March 31, 2017, increased by Rs.2,401 lakhs (7.76%) as compared to previous year.
Room Income stood at Rs.16,354 lakhs, an increase of Rs.1257 lakhs (8.33%) compared to previous year. The F&B Income increased by ''626 lakhs compared to previous year.
Total expenditure for the period ended as at March 31, 2017 amounted to Rs.34,304 lakhs, increased by Rs.712 lakhs (2.12%) as compared to previous year.
The Profit (EBITDA) before depreciation, finance cost & Tax for the year ended March 31, 2017 amounted to Rs.5,874 lakhs, increased by Rs.2,290 lakhs (64%) compared to previous year.
The Profit before exceptional item(s) for the year ended March 31, 2017 amounted to Rs.156 lakhs as against a loss of Rs.1,965 lakhs of the previous year.
The taxation expense (including deferred tax) for the year ended March 31, 2017 amounted to Rs.45 lakhs. The Profit after Tax for the year ended March 31, 2017 stood at v153 lakhs as against a loss of Rs.1,785 lakhs of the previous year.
NCD redemption reserve for the year ended March 31, 2017 amounted to Rs.2007 lakhs after the transfer of Rs.153 lakhs to the debenture redemption reserve during the year. No transfer was made to General Reserve during the year ended March 31, 2017.
Dividend
Considering the capital requirement to maintain the Debenture Redemption Reserve to the tune of 25% of value of debentures and due to inadequate profits in the reserves, the Board do not recommend any dividend on equity shares for the period ended on March 31, 2017.
Share Capital
The paid up Equity Share Capital of the Company as on March 31, 2017 was Rs.1,759 lakhs comprising of 17,85,99,180 Equity Shares having face value of Rs.1 each. The Company has not issued any equity shares during the financial year 2016-17.
Borrowings
The Companyâs borrowings as at March 31, 2017 on a standalone basis stood at Rs.32,232 lakhs as against Rs.31,742 lakhs as at March 31, 2016 and on a consolidated basis borrowings stood at Rs.32,232 lakhs as on March 31, 2017 as against Rs.31,742 lakhs as compared to the previous year.
Non-Convertible Debentures (NCDs)
During the year the Company has neither issued nor redeemed any NCDs. As on March 31, 2017, the outstanding NCDs amounts to Rs.20,000 lakhs comprising of 1000, âSeries - A Senior Secured Redeemable Non Convertible Debenturesâ having of face value Rs.10 lakhs aggregating to Rs.10,000 lakhs with coupon rate of 10.25% per annum and 1000, âSeries - B Senior Secured Redeemable Non Convertible Debenturesâ having of face value Rs.10 lakhs aggregating to Rs.10,000 lakhs with coupon rate of 2% at an yield to maturity rate of 10.25% per annum. The NCDs are listed in the Wholesale Debt Market (WDM) segment at National Stock Exchange of India Ltd.
Fixed Deposits
The Company has not accepted any public deposit and as such, no amount on account of principal or interest on public deposits was outstanding as on the date of the balance sheet. Acceptance and renewal of fixed deposits were discontinued with effect from February 17, 2003 and July 2009 respectively.
Particulars of Loans, Guarantees and Investments of the Company under Section 186 of the Act
The Company has not given any loans or provided any security during the financial year under review. The particulars of existing loans and investments have been disclosed under notes to financial statements.
Dividend Distribution Policy
As per regulation 43A of the SEBI (Listing Obligations and Disclosures) Regulations 2015, top 500 listed companies (based on market capitalization of every financial year) shall formulate a Dividend Distribution Policy, which shall be disclosed in their annual reports and on their website. Your Company has adopted this policy on voluntary basis as part of its corporate governance practices.
The policy is given in the Annexure 2 to this report and is also available on the Companyâs website, at http://orientalhotels. co.in/wp-content/uploads/2017/05/OHL_Dividend_ Distribution_Policy.pdf
Business Overview
The Indian Travel and Tourism Industry has been instrumental to the nation''s economic growth. Over the years, it has also emerged as a significant source of foreign exchange and a large employment generator.
Indiaâs Travel & Tourism sector ranks 7th in the world in terms of its total contribution to the countryâs GDP, shows a new report by the World Travel & Tourism Council (WTTC). According to the new data, Travel & Tourism generated INR14.1 trillion (USD208.9 billion) in 2016, which is the worldâs 7th largest in terms of absolute size, the sum is equivalent to 9.6% of Indiaâs GDP. Additionally, the sector supported 40.3 million jobs in 2016, which ranks India 2nd in the world in terms of total employment supported by Travel & Tourism. The sector accounts for 9.3% of the countryâs total jobs. Indiaâs Travel & Tourism sector was also the fastest growing amongst the G20 countries, growing by 8.5% in 2016. A further 6.7% growth is forecast for 2017. Indiaâs strong Travel & Tourism figures are predominantly generated by domestic travel, which accounts for 88% of the sectorâs contribution to GDP in 2016.
Financial information of Subsidiary & Associates
The Consolidated Financial Statements of the Company and its subsidiary/associates, are prepared in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under Companies (Indian Accounting Standards), Rules, 2015 of the Companies Act, 2013, and form part of the Annual Report.
In accordance with Section 136 of the Companies Act, 2013, the audited financial statements, including the Consolidated Financial Statements and related information of the Company and audited accounts of the subsidiary, may be accessed on Companyâs website at the link: http://www.orientalhotels.co.in/investors/financial-results/annual/. The documents will also be kept at the Registered Office of the Company, and will be available to members seeking information at any time.
The Company is having an overseas subsidiary as on March 31, 2017 and there has been no material change in the nature of business of subsidiary. The Minutes of the Subsidiary Company along with the financial statements were placed and reviewed by the Board of Directors.
Salient features pertaining to Subsidiary / Joint Venture / Associate as required by Sub-Section 3 of Section 129 of the Companies Act, 2013 (âActâ) read with Rule 5 of Companies (Accounts) Rules, 2014 is furnished hereto in the Annexure-1.
Related Party Transactions
All Related Party Transactions that were entered into during the financial year were on an armâs length basis, in the ordinary course of business and were in compliance with the applicable provisions of the Act and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. There were no materially significant Related Party Transactions made by the Company during the year that would have required Shareholder approval under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
All Related Party Transactions are placed before the Audit Committee for approval. A statement containing the details of all Related Party Transactions has been placed before the Audit Committee for its review on a quarterly basis.
The Policy on materiality of related party transactions and on dealing with related party transactions as approved by the Board may be accessed on Companyâs website at the link: http://orientalhotels.co.in/wp-content/uploads/2017/01/ RELATED-PARTY-TRANSACTIONS-POLICY.pdf
Disclosures as required under Ind-AS 24 in respect of Related Party Transactions have been made under Note 43 of the Notes to the standalone financial statements. There were no transactions during the year which would require disclosure in Form AOC 2.
Risk Management
The Company has constituted a Risk Management Committee voluntarily as a measure of good governance and management practice. The policy framework enables the Company to identify and evaluate risks and opportunities. This framework seeks to create transparency, minimize adverse impact on business objective and enhance the Companyâs competitive advantage. The risk framework defines the risk management approach across the Company at various levels including documentation and reporting.
The Policy framework enables the Company to evaluate risks, appropriately rate these risks and grade the same in accordance with their potential impact and likelihood. The two key components of risks are the probability (likelihood) of occurrence and the impact (consequence) of occurrence, if the risk occurs. Risk is analyzed by combining estimates of probability and impact in the context of existing control measures.
The Company has laid down procedures to inform Audit Committee as well as the Board of Directors about the risk assessment and management procedures and status. These procedures are periodically reviewed to ensure that the executive management monitors and controls risks.
Directors and Key Managerial Personnel (KMP)
The Board of Directors based on the recommendations of Nomination and Remuneration Committee (NRC) appointed Mr. Phillie Dara Karkaria as an Additional Director under the category of Independent Director with effect from January 23, 2017. He holds office upto the date of the forthcoming Annual General Meeting and is further proposed to be appointed as Independent Director of the Company for a period of five years commencing from his date of appointment.
The Company has received declarations from all the Independent Directors confirming that they meet the criteria of independence as prescribed both under the Act and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
In accordance with provisions under the Companies Act, 2013 and Articles of Association of the Company, Mr. Rakesh Kumar Sarna retires by rotation and is being eligible for re-appointment.
Mr. Anil P Goel, a Non-Executive Director on the Board of the Company representing Indian Hotels Company Ltd (IHCL) had resigned from the Board with effect from October 15, 2016 due to his retirement from IHCL.
Mr. D R Kaarthikeyan, one of the Independent Directors on the Board of the Company had resigned from the Board, with effect from October 5, 2016.
Mr. Mohan Jayaraman, Chief Financial Officer and one of the Key Managerial Personnel of the Company had resigned with effect from September 16, 2016. Consequent to the resignation of Mr. Mohan Jayaraman, the Board on the recommendation of the Nomination and Remuneration Committee appointed Mr. Rajneesh Jain as Chief Financial Officer with effect from September 17, 2016 and designated him as one of the Key Managerial Personnel of the Company pursuant to Section 203 of the Companies Act, 2013.
Board and Committee Meetings
The Board of Directors has met four (4) times during the year mainly to review and consider the quarterly financial results of the Company. Details of the composition of the Board and its Committees and of the meetings held and attendance of the Directors at such Meetings, are provided in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
Directorâs Responsibility Statement
Based on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the internal, statutory and secretarial auditors including audit of internal financial controls over financial reporting by the statutory auditors and the reviews performed by Management and the relevant Board Committees, including the Audit Committee, the Board is of the opinion that the Companyâs internal financial controls were adequate and effective during the financial year 2016 - 17.
Accordingly, pursuant to Section 134(3) (c) and 134(5) of the Act, the Board of Directors to the best of their knowledge and ability, confirm that:
i. in the preparation of the annual accounts, the applicable accounting standards have been followed and that there are no material departures;
ii. they have selected such accounting policies and applied them consistently made judgments and estimates that are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company at the end of the financial year March 31, 2017 and of the profit or loss of the Company for that period;
iii. they have taken proper and sufficient care for maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
iv. they had prepared the annual accounts on a going concern basis;
v. they have laid down the internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively;
vi. they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
Internal Controls Systems and Adequacy
The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations. The scope and authority of the Internal Audit function is well defined in the organization. To maintain its objectivity and independence, the Internal Audit function reports to the Chairman of the Audit Committee of the Board.
The Internal Audit Department monitors and evaluates the efficacy and adequacy of internal control systems of the Company, its compliance with operating systems, accounting procedures and policies at all locations of the Company. Based on the report of Internal Audit function, process owners undertake corrective action in their respective areas and thereby strengthen the controls. Significant audit observations and corrective actions suggested are presented to the Audit Committee of the Board.
Internal financial controls means the policies and procedures adopted by the Company for ensuring the orderly and efficient conduct of its business, including adherence to Companyâs policies, safeguarding of its assets, prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information.
Vigil Mechanism / Whistle Blower Policy
The Company has adopted a Whistle Blower Policy to provide a mechanism for the Directors and employees to report genuine concerns about any unethical behaviour, actual or suspected fraud or violation of the Companyâs Code of Conduct. The provisions of this policy are in line with the provisions of Section 177 (9) of the Act and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The whistle blower policy may be accessed on the Companyâs website at the link: http://orientalhotels.co.in/wp-content/uploads/2017/01/WHISTLE-BLOWER-POLICY-AND-VIGIL-MECHANISM.pdf
Significant and Material Orders passed by the Regulators
During the year under review, no significant and material orders were passed by the regulators or courts or tribunals impacting the going concern status and future operation of the Company.
Corporate Social Responsibility
Your Company is intrinsically associated with the society and environment by upholding its businesses with transparency and commitment. It has evolved an approach to leverage CSR as a potent, long-term goal towards âValue Creationâ for all its stakeholders.
Your Company works towards facilitating sustainable livelihoods by providing adequate opportunities to the youth of rural and less-privileged sectors of society. Your Company''s hotel units, which are in smaller cities, are engaged in community initiatives such as education and nutritional awareness. The units have consumed home made local produces from self-help groups, without compromising the product quality.
During the year company has constituted a Corporate Social Responsibility Committee comprising of Mr. Vijay Sankar, Independent Director, Mr. D Vijayagopal Reddy, Non-executive Director and Mr. Pramod Ranjan, Managing Director to administer the CSR activities of the Company.
The Company does not fall under the category of companies required to spend the prescribed amount towards CSR activities due to the losses suffered by the Company. However, the Company had spent Rs.34 lakhs during the financial year 2016 - 17 on a voluntary basis, through its various hotel units towards education and other social welfare measures which includes payment of school fees, distributing rice to the fishermanâs family during the non-fishing period etc.,
Policies
The SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 mandated the formulation of certain policies for all listed companies. All our corporate governance policies are available on our website (http://orientalhotels. co.in/investors/policies). The policies are reviewed periodically by the Board and updated based on need and new compliance requirement.
In addition to the Code of Conduct, key policies that have been adopted by the Company are as follows:
|
Name of the Policy |
Brief Description |
Web link |
|
Whistleblower Policy (Policy on vigil mechanism) |
The Company has adopted the whistleblower mechanism for directors and employees to report concerns about unethical behavior, actual or suspected fraud, or violation of the Companyâs code of conduct and ethics. There has been no change to the Whistleblower Policy adopted by the Company during fiscal 2016-17. |
http://orientalhotels.co.in/wp-content/ uploads/2017/01/WHISTLE-BLOWER- POLICY-AND-VIGIL-MECHANISM.pdf |
|
Policy on Material Subsidiaries |
The policy is used to determine the material subsidiaries and material non-listed Indian subsidiaries of the Company and to provide the governance framework for them. |
http://orientalhotels.co.in/wp- content/uploads/2017/01/POLICY- FOR-DETERMINING-MATERIAL- SUBSIDIARIES.pdf |
|
Related Party Transaction Policy |
The policy regulates all transactions between the Company and its related parties |
http://orientalhotels.co.in/wp-content/ uploads/2017/01/RELATED-PARTY- TRANSACTIONS-POLICY.pdf |
|
Code of Conduct for Prevention of Insider Trading |
The policy provides the framework in dealing with securities of the Company. |
http://orientalhotels.co.in/wp-content/ uploads/20 17/0 2/C ODE- OF-CONDUCT-FOR-PREVENTION-OF-INSIDER-TRADING.pdf |
|
Code of Corporate Disclosure Practices |
This provides clear guidelines for timely, adequate and universal dissemination of information and disclosure of Unpublished Price Sensitive Information |
http://orientalhotels.co.in/wp- content/uploads/2017/01/CODE- OF-CORPORATE-DISCLOSURE- PRACTICES.pdf |
|
Policy for Determining Materiality for Disclosures |
This policy governs the determination of materiality of an event or information for the purpose of disclosures to be made by the Company to the Stock Exchanges. This policy has to be read in congestion with the code of corporate disclosure practices framed by the company under Insider Trading Regulation |
http://orientalhotels.co.in/wp-content/ uploads/2017/01/POLICY-ON- MATERIALITY-OF-EVENTS.pdf |
|
Website Archival Policy |
The policy deals with the retention and archival of corporate records from the website of the Company. |
http://orientalhotels.co.in/wp-content/uploads/2017/02/WEBSITE-ARCHIVAL-POLICY.pdf |
|
Dividend Distribution Policy |
Guidelines for the Board and the Management in declaration and distribution of dividend, with a view to ensure fairness, transparency, sustainability and consistency in the decision for distributing profits to shareholders. |
http://orientalhotels.co.in/wp-content/ uploads/2017/05/OHL Dividend Distribution Policy.pdf |
Remuneration Policy
The Company had adopted a Remuneration Policy for the Directors, KMP and other employees, pursuant to the provisions of the Act.
The key principles governing the Companyâs Remuneration Policy are as follows:
Remuneration for Independent Directors and Non-Independent Non-Executive Directors
- Independent Directors (ID) and Non-Independent Non-Executive Directors (NINED) may be paid sitting fees for attending the meetings of the Board and of Committees of which they may be members, and receive commission within regulatory limits, as recommended by the NRC and approved by the Board.
- Overall remuneration should be reasonable and sufficient to attract, retain and motivate Directors aligned to the requirements of the Company, taking into consideration the challenges faced by the Company and its future growth imperatives.
- Remuneration paid should be reflective of the size of the Company, complexity of the sector/ industry/Companyâs operations and the Companyâs capacity to pay the remuneration and be consistent with recognized best practices.
- The aggregate commission payable to all the NEDs and IDs will be recommended by the NRC to the Board based on Company performance, profits, return to investors, shareholder value creation and any other significant qualitative parameters as may be decided by the Board. The NRC will recommend to the Board the quantum of commission for each Director based upon the outcome of the evaluation process which is driven by various factors including attendance and time spent in the Board and Committee Meetings, individual contributions at the meetings and contributions made by Directors other than in meetings.
- The remuneration payable to Directors shall be inclusive of any remuneration payable for services rendered in any other capacity, unless the services rendered are of a professional nature and the NRC is of the opinion that the Director possesses requisite qualification for the practice of the profession.
Remuneration for Managing Director (MD)/ Key Managerial Personnel (KMP)/ rest of the Employees
- The extent of overall remuneration should be sufficient to attract and retain talented and qualified individuals suitable for every role. Hence remuneration should be market competitive, driven by the role played by the individual, reflective of the size of the Company, complexity of the sector/ industry/ Companyâs operations and the Companyâs capacity to pay, consistent with recognized best practices and aligned to any regulatory requirements.
- Basic/ fixed salary is provided to all employees to ensure that there is a steady income in line with their skills and experience. In addition, the Company provides employees with certain perquisites, allowances and benefits to enable a certain level of lifestyle and to offer scope for savings. The Company also provides all employees with a social security net subject to limits, by covering medical expenses and hospitalization through re-imbursements or insurance cover and accidental death etc. The Company provides retirement benefits as applicable.
- In addition to the basic / fixed salary, benefits, perquisites and allowances as provided above, the Company provides MD, such remuneration by way of commission, calculated with reference to the net profits of the Company in a particular financial year, as may be determined by the Board, subject to the overall ceilings stipulated in Section 197 of the Act. The specific amount payable to the MD would be based on performance as evaluated by the NRC and approved by the Board.
- The Company provides the management employees a performance linked bonus. The performance linked bonus would be driven by the outcome of the performance appraisal process and the performance of the Company.
It is affirmed that the remuneration paid to Directors, KMP and all other employees is as per the Remuneration Policy of the Company.
Investor Education and Protection Fund (IEPF)
Pursuant to the applicable provisions of the Companies Act, 2013, read with the IEPF Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 (âthe Rulesâ), all unpaid or unclaimed dividends are required to be transferred by the Company to the IEPF established by the Central Government, after the completion of seven years. Further, according to the Rules, the shares in respect of which dividend has not been paid or claimed by the shareholders for seven consecutive years or more shall also be transferred to the demat account created by the IEPF Authority. Accordingly, the Company has transferred the unclaimed and unpaid dividends. Further, the corresponding shares will be transferred as per the requirements of the IEPF rules, details of which are provided on our website, at http://orientalhotels.co.in/ investors/unclaimed-amounts/transfers-to-iepf/
Evaluation of Board of Directors
The Board of Directors of the Company presently comprises nine (9) Non-Executive Directors and one Executive Director viz., the Managing Director. The Directors appointed on the Board are from diverse fields relevant to the Companyâs business, having long-standing experience and expertise in their respective fields. They have considerable experience in managing large corporate and have been in public life for decades.
Non-Executive Directors add substantial value through the deliberations at the meetings of the Board and Committees thereof. To safeguard the interests of the investors, they also play a control role in important Committees of the Board such as Audit Committee, Nomination & Remuneration Committee, Stakeholders Relationship Committee etc., the Directors play an important role by contributing to the deliberations of the Committee Meetings. Besides contributing at the meetings of the Board and Committees, the Non-Executive Directors also have off-line deliberations with the Management of the Company and add value through such deliberations.
In a separate meeting of Independent Directors, performance of Non-Independent Directors, performance of the Board as a whole and performance of the Chairman was evaluated, taking into account the views of executive and non-executive directors.
Listing
The Equity Shares of your Company are listed at BSE Limited, Mumbai (BSE) and the National Stock Exchange of India Limited, Mumbai (NSE) and the Global Depositary Receipts (GDRs) are listed at Luxembourg Stock Exchange. NCDâs issued by the Company are listed at the Wholesale Debt Market (WDM) segment of NSE. The Listing fees to these Stock Exchanges and custodian fees to depositories viz., NSDL and CDSL have been paid by the Company for the financial year 2017-18.
Auditors and Auditorâs Report
(i) Statutory Auditors:
The tenure of present statutory auditor of the Company M/s SNB Associates, Chartered Accountants (Firm Registration No: 015682N) shall end at the conclusion of ensuing AGM to be held on July 25, 2017. Taking into account that M/s SNB Associates, Chartered Accountants, have completed the maximum tenure permissible under the Companies Act, 2013, in line with the requirement of rotation of auditors prescribed under Section 139(2) of the Companies Act, 2013, the Board based on the recommendation of Audit Committee and subject to the approval of Members approved the appointment of M/s. PKF Sridhar and Santhanam LLP, Chartered Accountants, (Firm Registration No.: 003990S/ S200018) as Statutory Auditors of the Company for a term of 5 years commencing from the conclusion of the ensuing AGM. M/s. PKF Sridhar and Santhanam LLP, Chartered Accountants have confirmed their willingness, to act as statutory auditors and further confirmed that they are not disqualified to be appointed as statutory auditor in terms of the provisions of the proviso to Section 139(1), Section 141(2) and Section 141(3) of the Act and the provisions of the Companies (Audit and Auditors) Rules, 2014. The Board recommends the appointment of M/s. PKF Sridhar and Santhanam LLP, Chartered Accountants as Statutory Auditors for the consideration of shareholders in the ensuing AGM to be held on July 25, 2017. The Board of Directors places on record its appreciation for the service rendered by M/s SNB Associates, Chartered Accountants as the statutory auditor of the Company.
The notes on financial statement referred to in the Auditorâs Report are self explanatory and do not call for any further comments. The Auditorâs Report does not contain any qualification, reservation, adverse remark or disclaimer
(ii) Secretarial Auditors:
Pursuant to provisions under Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors of the Company had appointed M/s. S Sandeep & Associates, Company Secretaries to undertake the Secretarial Audit of the Company for the financial year ended March 31, 2017. The Secretarial Audit Report is attached as Annexure 1.
The Auditorsâ Report and Secretarial Audit Report for the financial year ended March 31, 2017 do not contain any qualification, reservation, adverse remark or disclaimer.
Corporate Governance Report, Management Discussion & Analysis Report
As required under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 the report on Management Discussion & Analysis, Corporate Governance as well as the Auditorâs certificate on the compliance of Corporate Governance thereon are attached and form part of the Annual Report.
Conservation of Energy, Technology Transfer and Foreign Exchange Earnings and outgo
The information on conservation of energy, technology absorption and foreign exchange earnings and outgo as required under Section 134(3)(m) of the Act, read with Rule 8 of the Companies (Accounts) Rules, 2014 is furnished in the Annexure 3 to this report:
Particulars of Employees & Remuneration
The information required under section 197(12) of the Act, read with rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is furnished in the Annexure 4 to this report.
The information required under Rule 5 (2) and (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is furnished in the Annexure forming part of the Report. In terms of the first proviso to section 136 of the Act, the Report and accounts are being sent to the shareholders excluding the aforesaid Annexure. Any shareholder interested in obtaining the same may write to the Company Secretary at the Registered Office of the Company.
Disclosures as per the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.
The Company has zero tolerance for sexual harassment at its workplace and has adopted a Policy on prevention, prohibition and redressal of sexual harassment at the workplace in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules there under for prevention and redressal of complaints of sexual harassment at workplace.
During the year under review there were no complaints on sexual harassment reported.
Extract of Annual Return
Pursuant to Section 92(3) of the Companies Act, 2013 and Rule 12(1) of the Companies (Management and Administration) Rules, 2014, the Extract of the Annual Return in Form MGT 9 is attached as Annexure 5 to this report.
Acknowledgement
The Directors thank the Companyâs employees, customers, vendors, investors and bankers for their continued support during the year.
For and behalf of the Board
Rakesh Sarna
Place: Chennai (DIN:01875340)
Date: May 12, 2017 Chairman
Mar 31, 2015
To the Members:
The Directors are pleased to present the 45th Annual Report of the
Company together with its Audited Statement of Profit & Loss for the
year ended March 31, 2015 and the Balance Sheet as on that date
1. Financial Results
Particulars Year Ended Year Ended
March 31, 2015 March 31, 2014
Rs in Lakhs Rs in Lakhs
Profit before Depreciation, finance 4,950 4,692
cost & Tax
Finance Cost 3,005 2,942
Depreciation and amortization expenses 2,548 2,794
Profit/(Loss) before Tax and Exceptional Items (603) (1,044)
Exceptional Items - -
Profit/(Loss) Before Tax (603) (1044)
Less:
Provisions for tax
- Current 114 66
- Minimum Alternate Tax credit entitlement - -
- Deferred Tax (376) (390)
- Tax related to previous years (42) -
Profit/(Loss) After Tax (299) (720)
Balance brought forward from previous year 3,145 5,848
Distributable profit 3,145 5,848
Dividend 714 982
Tax on dividend 146 167
Amount transferred:
- General Reserve - -
- Debenture Redemption Reserve 1,853 834
Balance carried forward 2,053 3,145
Earnings per share (Rs.) (0.17) (0.40)
The country witnessed an increase in supply of 4.4% between April to
March 2015, demand for same period increased by 7.8% over the previous
year. South India witnessed a supply growth of 4% and demand by 12%.
The overall Country's Average room rate during the period stood at
Rs.5585/- representing a decline of 1% over previous year. Average Room
Rate across the Company's hotels has increased by Rs.253/- (4.48%) from
Rs.5647/- to Rs.5900/- as compared to previous year. The Company occupancy
(%) percentage of the hotel units was at 63% for the year under review
as against 65% of the previous year.
Operating Results
The Company achieved a turnover of Rs.30,672 lakhs for the period ended
March 31, 2015; increased by Rs.437 lakhs (1.44%) as compared to previous
year.
Room Income stood at Rs.14,327 lakhs had results an increase of Rs.253
lakhs (1.80%) of the previous year. The F&B Income decreased by Rs.280
lakhs (2.06%) of the previous year.
State of Company's affairs
Total expenditure for the period ended as at March 31, 2015 amounted to
Rs.25,722 lakhs, increased by Rs.180 lakhs (0.70%) as compared to previous
year.
The Profit (EBITDA) before depreciation, finance cost & tax for the
year ended March 31, 2015 amounted to Rs.4,949 lakhs, increased by Rs.257
lakhs (5.48%) of the previous year.
The Loss before exceptional item(s) for the year ended March 31, 2015
amounted to Rs.603 lakhs as against a loss of Rs. 1044 lakhs of the
previous year.
The taxation expense (including deferred tax) for the year ended March
31, 2015 amounted to (Rs.303) lakhs. The Loss after Tax for the year
ended March 31, 2015 stood at Rs.299 lakhs as against a loss of Rs.719
lakhs of the previous year. No transfer was made to General Reserve
and created a NCD redemption reserve to the tune of Rs. 1853 lakhs during
the financial year along with the write back of Rs. 1853 lakhs created
earlier for NCD's which were redeemed during the year on maturity.
Dividend
Your Directors recommended a dividend of Rs.0.40 (40%) per equity share
of Rs. 1/- each for the financial year ended March 31, 2015. The total
amount of dividend outgo for the financial year 2014-15 will be Rs.860
lakhs comprising of Rs.714 lakhs as dividend and Rs. 146 lakhs as tax on
dividend as against Rs. 1149.24 lakhs comprising of Rs.982.30 lakhs as
dividend and Rs.166.94 lakhs as tax for the previous year. The dividend
if approved, in the forthcoming Annual General Meeting will be paid
within 30 days thereof to the Members whose name appears in the
Registrar of Members as on July 24, 2015 and the proposed date of
payment will be notified to the Stock Exchanges for publication.
Capital Expenditure
During the year under review, the Company incurred Rs.1913 lakhs towards
capital expenditure. Jiva Spa at Taj Coromandel, Chennai was
commissioned during the year.
Borrowings
The Company's borrowings as at March 31, 2015 on a standalone basis
stood at Rs.31,097 lakhs as against Rs.30,756 lakhs as at March 31, 2014
and on a consolidated basis borrowings stood at Rs.34,820 lakhs as on
March 31, 2015 as against Rs.24,734 lakhs as compared to the previous
year.
Non Convertible Debentures (NCD)
The Company had redeemed NCDs aggregating to Rs.1,000 lakhs and paid the
principal and the interest thereof during the financial year 2014-15.
The Company also issued during the year 'Series-A Senior Secured
Redeemable Non Convertible Debentures' having of face value Rs.10 lakhs
aggregating to Rs. 1000 lakhs with coupon rate of 10.25% per annum and
'Series-B Senior Secured Redeemable Non Convertible Debentures'
having of face value Rs. 10 lakhs aggregating to Rs. 1000 lakhs with coupon
rate of 2% at an yield to maturity rate of 10.25% per annum together
aggregating to Rs.2000 lakhs for a period of five years. The said
debentures are listed in the Wholesale Debt Market (WDM) segment at
National Stock Exchange of India Ltd.
Fixed Deposits
The Company has not accepted any public deposit or renewed of the same
during the period under review. Acceptance of fixed deposits was
discontinued effective February 17, 2003 and also discontinued renewal
of Fixed Deposits with effect from July 2009. The Liability on account
of unclaimed Fixed Deposits amounts to Rs.0.45 lakhs as on March 31, 2015
as against Rs.3.55 lakhs as on March 31, 2014.
Business Overview
Tourism in India has gained acceptance as a potent engine for inclusive
socio-economic growth, since it has potential to stimulate other
economic factors through its forward and backward linkages and ability
to create more employment due to its multiplier effect on the economy.
The year 2014 witnessed a growth of 10.6% of Foreign Tourist Arrivals
and the Foreign Exchange Earnings from tourism during the year 2014
grew by 11.5%. The Government of India launched Tourist Visa on Arrival
enabled with Electronic Travel Authorisation Scheme in the month of
November 2014, resulted an increase in foreign tourist arrivals.
There are many other factors of recessionary economic environment
coupled with unprecedented in supply has eroded the room rates and
inflationary push of operating cost thereby adversely impacted the
profitability of the Company. The Company has initiated variety of
steps in the recent past to address the challenges of market dynamics.
Such measures are combination of cut back on fresh capital commitments,
cost rationalization, continued investments behind customer engagement
and brand building which will, in our view bear fruit in the years to
come.
Financial information of Subsidiary, Associate & Joint venture
The Consolidated Financial Statements of the Company and its
subsidiary, is prepared in accordance with Accounting Standard 21
issued by the Institute of Chartered Accountants of India, form part of
the Annual Report and are reflected in the Consolidated Financial
Statements of the Company.
The annual accounts of the subsidiary and related detailed information
will be kept at the Registered Office of the Company, as also at the
registered offices of the respective subsidiary company and will be
available to members seeking information at any time.
Salient features pertaining to Subsidiary / Joint Venture / Associate
as required by Sub-Section 3 of Section 129 of the Companies Act, 2013
('Act') read with Rule 5 of Companies (Accounts) Rules, 2014 is
furnished hereto in the Annexure-1.
Up-gradation and expansion
The Company at its unit 'Taj Coromandel' commissioned Jiva SPA
facility at a capital cost of Rs.1,158 lakhs during the year. Board of
Directors
The Board of Directors has met four (4) times during the year on a
quarterly basis to review and consider the quarterly audited financials
of the Company and the meeting dates are provided in the Corporate
Governance report.
Mr. Rakesh Kumar Sarna, was appointed as a director by the Board w.e.f.
October 23, 2014. Mr. Raymond Bickson, Director and Mr. Venu
Srinivasan, Director resigned from the Board, w.e.f. August 11, 2014
and September 1, 2014 respectively.
Mr. Pramod Ranjan and Mr. Ramesh D. Hariani, Directors retire by
rotation and are being eligible for re-appointment. Mr. Anil P Goel,
who was appointed as a Director in the casual vacancy under the
applicable provisions of the Act and Articles of Association, holds
office up to the date of the AGM and is eligible for appointment. The
Company was in receipt of a notice proposing his candidature. Mr.
D.Varada Reddy, Managing Director announced his wish to step down as
Managing Director on completion of his tenure on November 10, 2015.
The Key Managerial Personnel of the Company presently are Mr. D.Varada
Reddy, Managing Director, Mr. Mohan Jayaraman, Chief Financial Officer
and Mr. K.C.Raman, Company Secretary.
Director's Responsibility Statement
Based on the framework of internal financial controls and compliance
systems established and maintained by the Company, work performed by
the internal, statutory & secretarial auditors the reviews performed by
Management and the relevant Board Committees, including the Audit
Committee, the Board is of the opinion that the Company's internal
financial controls were adequate and effective during the financial
year 2014 - 15.
Pursuant to Section 134(3) (c) and 134(5) of the Act, the Board of
Directors to the best of their knowledge and ability, confirm that:-
i. in the preparation of the annual accounts, the applicable accounting
standards have been followed and that there are no material departures;
ii. they have selected such accounting policies and applied them
consistently made judgments and estimates that are reasonable and
prudent, so as to give a true and fair view of the state of affairs of
the Company at the end of the financial year March 31, 2015 and of the
profit or loss of the Company for that period;
iii. they have taken proper and sufficient care for maintenance of
adequate accounting records in accordance with the provisions of the
Act for safeguarding the assets of the Company and for preventing and
detecting fraud and other irregularities;
iv. they had prepared the annual accounts on a going concern basis;
v. they have laid down the internal financial controls to be followed
by the Company and that such internal financial controls are adequate
and are operating effectively;
vi. they have devised proper systems to ensure compliance with the
provisions of all applicable laws and that such systems were adequate
and operating effectively.
Internal Controls and Systems
The Company has an Internal Control System, commensurate with the size,
scale and complexity of its operations. The scope and authority of the
Internal Audit function is well defined in the organization. To
maintain its objectivity and independence, the Internal Audit function
reports to the Chairman of the Audit Committee of the Board.
The Internal Audit Department monitors and evaluates the efficacy and
adequacy of internal control systems of the Company, its compliance
with operating systems, accounting procedures and policies at all
locations of the Company. Based on the report of Internal Audit
function, process owners undertake corrective action in their
respective areas and thereby strengthen the controls. Significant audit
observations and corrective actions suggested are presented to the
Audit Committee of the Board.
Internal financial controls means the policies and procedures adopted
by the Company for ensuring the orderly and efficient conduct of its
business, including adherence to Company's policies, safeguarding of
its assets, prevention and detection of frauds and errors, the accuracy
and completeness of the accounting records, and the timely preparation
of reliable financial information.
Details of Significant and Material Orders
No significant and material orders were passed by the regulators or
courts or tribunals impacting the going concern status and future
operation of the Company.
Independent Directors Declaration as per Section 149 of the Act
The declarations received from the Independent Directors pursuant to
Section 149 of the Act, were taken on record by the Board.
Qualification, Reservation or adverse remark or disclaimer on Auditor's
Report and Secretarial Audit Report
The auditors of the Company have reported a subject as a matter of
emphasis in their stand alone auditor's report (Point No.8) dated May
15, 2015 to the members of the Company. The Company has filed requisite
applications to the Ministry of Corporate Affairs, after obtaining the
members approval for payment of excess remuneration to the Managing
Director by passing a special resolution and the approval from Central
Government is awaited.
The secretarial audit report dated May 15, 2015 pursuant to the Act and
the listing agreement gives certain remarks and these are addressed as
indicated hereafter: (a) The Company is in the process of appointing an
independent director (woman) to comply with listing agreement (b) a
Risk Management Committee has since been constituted on May 15, 2015
(c) the opposite transactions having a net effect of 0.05% of the total
share capital of the Company were entered into inadvertently, no such
future transactions shall be carried out and there will be strict
adherence to the code henceforth.
Particulars of Loans, Guarantees and Investments of the Company under
Section 186 of the Act.
The Company during the year has made an additional investment Rs.2.40
lakhs towards acquiring 24,000 equity shares in Green Infra Wind
Generation Ltd. The Company also renewed the Inter Corporate Deposit
amounting to Rs.560 lakhs placed with Taj Karnataka Hotels and Resorts
Ltd. The Company made an investment of Rs.63.34 lakhs (115163 CCDs @
Rs.55/-) representing compulsorily convertible debentures in The Indian
Hotels Company Limited, which are convertible in to equity shares of Rs.
1/- within eighteen months from the date of allotment.
Particular of Related Party Contracts and other arrangements under
Section 188 of the Act.
All Related Party Transactions that were entered into during the
financial year were on an armRs.s length basis, in the ordinary course
of business and were in compliance with the applicable provisions of
the Act and the Listing Agreement. Suitable disclosures as required
under AS-18 have been made in Note. 39 of the notes to the Standalone
Financial Statements.
The Company has adopted a Related Party Transactions Policy. The Policy
as approved by the Board, is uploaded on the Company's website at the
web link:
http://www.orientalhotels.co.in/uploading/OHL_RPT_Policy_Final.pdf
Implementation of Risk Policy
Pursuant to Clause 49 of the listing agreement, the Company has framed
a Risk Management Policy and a Risk Committee is being constituted. The
policy framework enables the Company to identify and evaluate risks and
opportunities. This framework seeks to create transparency, minimize
adverse impact on business objective and enhance the Company's
competitive advantage. The risk framework defines the risk management
approach across the Company at various levels including documentation
and reporting.
The Policy framework enables the Company to evaluate risks,
appropriately rate these risks and grade the same in accordance with
their potential impact and likelihood. The two key components of risks
are the probability (likelihood) of occurrence and the impact
(consequence) of occurrence, if the risk occurs. Risk is analyzed by
combining estimates of probability and impact in the context of
existing control measures.
Existing control measures are evaluated against Critical Success
Factors (CSFs) and Key Performance Indicators (KPIs) identified for
those specific controls. Guiding principles to determine the risk
consequence (impact), probability of occurrence (likelihood factor) and
mitigation plan effectiveness.
Corporate Social Responsibility
Your Company is intrinsically associated with the society and
environment by upholding its businesses with transparency and
commitment. It has evolved an approach to leverage CSR as a potent,
long-term goal towards 'Value Creation' for all its stakeholders.
Your Company works towards facilitating sustainable livelihoods by
providing adequate opportunities to the youth of rural and
less-privileged sectors of society. Your Company hotel units, which are
in smaller cities, are engaged in community initiatives such as
education and nutritional awareness. The units have consumed homemade
local produces from self-help groups, without compromising the product
quality.
The Company voluntarily, through its unit namely Vivanta by Taj -
Fisherman's Cove, Kovalam had spent Rs.22.79 lakhs during the financial
year 2014 - 15 towards payment of school fees, distributing rice to the
fisherman's family during the non-fishing period as declared by the
Government. The 'Taj Clinic' provides free medical consultation and
medicines to the residents of nearby hamlets.
Nomination & Remuneration Committee
The information pertains to Nomination and Remuneration Committee is
furnished in the Corporate Governance Report, which forms part of this
report.
Remuneration Policy
The remuneration policy of the Company is governed by the operating
agreement(s). The operating policy adopted by the Company covers the
terms of appointment such as qualifications, positive attributes and
independence of a director, remuneration for the directors, key
managerial personnel and other employees as per the applicable
provisions of the Act, and the listing agreement. Further, functions of
the Human Resource Department of the Company are governed by the "Taj
HR Policy Manual Process & Guidelines". The details of the
remuneration paid to the Managing Director of the Company which was
approved by the members as minimum remuneration pursuant to the
applicable provisions of the Act, is also furnished.
Evaluation of Board of Directors
The Board of Directors of the Company presently comprises ten (10)
Non-Executive Directors and one (executive) Managing Director. The
Directors appointed on the Board are from diverse fields relevant to
the Company's business, having long-standing experience and expertise
in their respective fields. They have considerable experience in
managing large corporate and have been in public life for decades.
Non-Executive Directors add substantial value through the deliberations
at the meetings of the Board and Committees thereof. To safeguard the
interests of the investors, they also play a control role. In important
Committees of the Board such as Audit Committee, Nomination &
Remuneration Committee, Stakeholders Relationship Committee etc., the
Directors play an important role by contributing to the deliberations
of the Committee Meetings. Besides contributing at the meetings of the
Board and Committees, the Non-Executive Directors also have off-line
deliberations with the Management of the Company and add value through
such deliberations.
Subsidiary Company
The Company is having an overseas subsidiary as on March 31, 2015 and
there has been no material change in the nature of business of
subsidiary. As required under the listing agreement, the consolidated
financial statement of the Company is attached, which was prepared in
accordance with relevant accounting standards as prescribed under
Section 133 of the Act. The consolidated financials disclose the
assets, liabilities, income, expenses and other details. The Minutes
of the Subsidiary Company along with the financial statements were
placed and reviewed by the Board of Directors.
Listing
The Equity Shares of your Company are listed at BSE Limited, Mumbai and
the National Stock Exchange of India Limited, Mumbai and the Global
Depositary Receipts (GDRs) are listed at Luxembourg Stock Exchange.
NCD's issued by the Company during the year are listed at National
Stock Exchange of India Limited in the Wholesale Debt Market (WDM). The
Listing fees to these Stock Exchanges and custodian fees to NSDL and
CDSL have been paid by the Company for the financial year 2015-16.
Madras Stock Exchange have approved the delisting and the shares of the
Company w.e.f December 9, 2014.
Auditors
Messrs Brahmayya & Co, Chartered Accountants and SNB Associates,
Chartered Accountants, who are the Joint Statutory Auditors of the
Company, hold office till the conclusion of the forthcoming AGM and are
eligible for re- appointment. Pursuant to the provisions of section 139
of the Act and the rules there-under, it is proposed to appoint Messrs
Brahmayya & Co, Chartered Accountants (Firm Registration No:000511S)
and SNB Associates, Chartered Accountants, (Firm Registration
No:015682N) who are the Joint Statutory Auditors of the Company from
the conclusion of the 45th Annual General Meeting up to the conclusion
of the forty seventh (47th) Annual General Meeting to be held in 2017
(subject to ratification of their appointment at the AGM to be held in
2016).
Staff
The Directors expressed their appreciation for the contribution made by
the employees in the progress of the Company. Corporate Governance
Report, Management Discussion & Analysis Report
As required by Clause 49 of the Listing Agreement with the Stock
Exchanges, the report on Management Discussion & Analysis, Corporate
Governance as well as the Auditor's certificate on the compliance of
Corporate Governance thereon are attached and form part of the Annual
Report.
Conservation of Energy, Technology Transfer and Foreign Exchange
Earnings and outgo
The information required under Section 134(3)(m) of the Act, read with
the Companies (Accounts) Rules, 2014 is furnished in the Annexure 2 to
this report:
Particulars of Employees & Remuneration
The information required under section 197(12) of the Act, read with
rule 5 of the Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014 is furnished in the Annexure 3 to this report.
The information required under Rule 5 (2) and (3) of the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014 in
the Annexure forming part of the Report. In terms of the first proviso
to section 136 of the Act, the Report and accounts are being sent to
the members excluding the aforesaid Annexure. Any shareholder
interested in obtaining the same may write to the Company Secretary at
the Registered Office of the Company.
Extract of Annual Return
The Extract of the Annual Report under Section 92 of the Act, is being
furnished as an Annexure 4 to this report. Acknowledgement
The Directors thank the Company's customers, vendors, investors and
bankers for their continued support during the year.
For and behalf of the Board of Directors
Place: Chennai Rakesh Kumar Sarna (DIN:01875340)
Date: May 15, 2015 Chairman
Mar 31, 2013
To the Members:
The Directors are pleased to present the 43rd Annual Report of the
Company together with its Audited Statement of Profit & Loss for the
year ended March 31, 2013 and the Balance Sheet as on that date.
Financial Results
Year Ended Year Ended
Particulars March 31, 2013 March 31, 2012
Rs. in Lakhs Rs. in Lakhs
Profit before depreciation,
finance cost & Tax 5345 5771
Finance Cost 2774 1935
Depreciation and amortization expenses 2617 1955
Profit/(Loss) before tax and
exceptional items (46) 1881
Exceptional Items 1436
Profit Before Tax 1390 1881
Less:
Provisions for tax
- Current 276 383
- Minimum Alternate tax
credit entitlement (185) (383)
- Deferred Tax (224) 618
- Ta x related to previous years 93
Profit After Tax 1430 1263
Balance brought forward
from previous year 6551 6537
Distributable profit 7981 7800
Dividend 982 804
Ta x on dividend 167 130
Amount transferred:
- General Reserve 150 130
- Debenture Redemption Reserve 834 185
Balance carried forward 5848 6551
Earnings per share (Rs.) 0.80 0.71
Operating Results
The Average Room Rates (ARR) across the key domestic markets declined
by 4% in the year 2012-13 as compared to the previous year, because of
increase in supply. The ARR of the Company for the year was at Rs.6,050/-
against Rs.6,314/- of the previous year.
The occupancy level across the units of the Company remained at 64%
despite an increase of 14% in the inventory of the Company from 925
rooms to 1053 rooms. The CompanyÂs turnover for the financial year
ended March 31, 2013 stood at Rs.29,663 lakhs resulted an increase of 10%
as compared to previous year. The room income stood at Rs.14,790 lakhs
with an increase of 8% compared to previous year. Food and Beverage
Income stood at Rs.12,578 lakhs with an increase of 21% as compared to
the previous year.
Total expenditure of the Company was increased by Rs.4,569 lakhs (18%) as
compared to previous year, this increase of expenditure would be at 8%
without considering expenditures on account of Vivanta by Ta j  Surya,
Coimbatore.
Profit before depreciation, finance cost & tax was at Rs.5,345 lakhs for
the current year with a decrease of Rs.426 lakhs (7%) as compared to
previous year. Interest and depreciation amounted to Rs.2,774 lakhs and
Rs.2,617 lakhs respectively. The Net Loss before exceptional items was
Rs.46 lakhs as against a profit of Rs.1,881 lakhs as compared to previous
year. Further the Exceptional Items represent a profit of Rs.1,218 lakhs
on disinvestment holdings of Prestige Garden Resorts Private Limited, a
Joint Venture Company and Rs.218 lakhs being a profit on transfer of an
immovable property.
Profit Before Ta x and after Exceptional Items was Rs.1,390 lakhs as
against Rs.1,881 lakhs as compared to previous year Profit After Ta x
stood at Rs.1,430 lakhs as against Rs.1,263 lakhs as compared to previous
year.
Consolidated Financial Results
The Consolidated turnover of the Company for the financial year ended
March 31, 2013 amounts to Rs.34,878 lakhs as against Rs.32,155 lakhs as
compared to the previous year. The Profit After Ta x amounts to Rs.1,562
lakhs as against Rs. 2,249 lakhs as compared to previous year.
Dividend
Your Directors recommended a dividend of Rs.0.55 (55%) per equity share
of Rs.1/- each for the financial year ended March 31, 2013. The total
amount of dividend outgo for the financial year 2012-13 will be Rs.1,149
lakhs comprising of Rs.982 lakhs as dividend and Rs.167 lakhs as tax on
dividend as against Rs.804 lakhs as dividend and Rs.130 lakhs as tax of
dividend for the previous year. The dividend if approved in the
forthcoming Annual General Meeting will be paid within 30 days thereof
to the Members whose name appears in the Register of Members as on
August 6, 2013 and the proposed date of payment will be notified to the
Stock Exchanges for publication.
Borrowings
The CompanyÂs borrowings as at March 31, 2013 on a standalone basis
stood at Rs.28,340 lakhs as against Rs.29,037 lakhs as on March 31, 2012
and on a Consolidated basis borrowings stood at Rs.30,338 lakhs as on
March 31, 2013 as against Rs.31,975 lakhs as compared to the previous
year. The Company during the financial year 2011-12 has raised Rs.10,000
lakhs through an issue of 10.40% Secured Non-Convertible Debentures
towards capital expenditures which is repayable on maturity in January,
2015.
Fixed Deposits
The Company discontinued acceptance of fixed deposits effective from
February 17, 2003 and also renewal of Fixed Deposits with effect from
July 2009. The Liability on account of unclaimed Fixed Deposits amounts
to Rs.5.40 lakhs as on March 31, 2013.
Capital Expenditure
During the year under review, the Company incurred Rs.5,274 lakhs towards
capital expenditure. Major expenditure was incurred for the
construction of Vivanta by Ta j - Surya, Coimbatore and renovation of
Ta j Coromandel, Chennai.
Business Overview
India stands 42nd in the world ranking of Foreign Tourist Arrivals. The
Indian economy grew by 5% in the year 2012-13 and the Services Sector
grew by 6.6%. The tourism sector contributes 6.23% to the national
gross domestic product (GDP) and 8.78% of the total employment in
India. However, due to global economic slowdown the Foreign Tourist
Arrivals growth was moderated at 5.4% in the year 2012.
In terms of hospitality industry performance in India, the reports
indicate that the overall rates and occupancies have seen a decline in
2012 owing to the impact of increased supply in the marketplace and
this trend is expected to continue for the next few years.
The increase in interest rates resulted in higher cost of borrowings
and increasing input cost have had an impact on profitability. One of
the hindrances towards growth of this Industry is that of multiple
taxes which makes the tourism product expensive.
Your Company being part of the Taj Group of Hotels, has the advantage
of access to the aggressive sales & marketing strategies, cost
efficiency and talented pool of human resources etc., Your Company also
expanded in newer locations in South India and has plans to add newer
hotels in near future.
Product up-gradation and expansion
The year under review your Company had renovated and expanded its
products and offerings as detailed hereunder:
1. The Ball Room complex at Taj Coromandel, Chennai was fully
renovated and 7,000 Sqft. additional space was also added. A new 4,000
Sqft. Fitness Center was opened.
2. The capacity expansion at Vivant by Taj  FishermenÂs Cove, Chennai
was completed with all the 64 new rooms being fully operational.
3. Vivanta by Taj  Surya, Coimbatore opened a Barbeque Restaurant and
a Chinese Restaurant.
4. Vivanta by Taj  Trivandrum, opened a new (Jiva) Spa and a Chinese
restaurant
Subsidiary Company
The Ministry of Corporate Affairs, vide Circular No. 3/2011 Â
N.5/12.2007-CL-III dated February 21, 2011 granted a general permission
to holding companies from not attaching to its Annual Report the Profit
& Loss Statement, Balance Sheet, AuditorÂs Report & etc. of its
Subsidiary Company(s).
The Board in accordance with the said circular and Section 212, of the
Companies Act, 1956 and other applicable provisions if any, have not
enclosed the Profit & Loss Statement, Balance Sheet, AuditorÂs Report &
etc. of its Subsidiary Company, namely OHL International (HK) Ltd. The
Statement pursuant to Section 212 of the Companies Act, 1956 relating
to the Subsidiary Company is furnished in the Annual Report.
Listing
The Equity Shares of your Company are listed on Madras Stock Exchange
Limited, Chennai, Bombay Stock Exchange Limited, Mumbai and The
National Stock Exchange of India Limited, Mumbai and the Global
Depositary Receipts (GDRs) are listed on Luxembourg Stock Exchange. The
Listing fees to the Stock Exchanges and custodian fees to NSDL and CDSL
have been paid by the Company for the financial year 2013-14.
Directors
Mr.S.Y.Syed Meeran, Dr.G.Sundaram, and Mr.SBPV.Ramamohana Rao,
Directors retire by rotation, and are eligible for re-appointment.
Auditors
The Auditors Messers Brahmayya & Co, Chartered Accountants and Messers
SNB Associates, Chartered Accountants, Chennai shall retire at the
forthcoming Annual General Meeting and are eligible for re-appointment.
The retiring auditors have furnished a certificate confirming their
eligibly for re-appointment in accordance with the provisions of
Section 224(1B) of the Companies Act, 1956 and also have indicated
their willingness for re-reappointment.
Staff
The particulars of employees requires to be furnished under Section 217
(2A) of the Companies Act, 1956 read with rules there under, forms part
of this Report. However, as per the provisions of Section 219(1)(b)(iv)
of the Companies Act, 1956 the reports and accounts are being sent to
all the shareholders of the Company excluding the statement of
particulars of employees. Any shareholder interested in obtaining a
copy of the same may write to the Company Secretary.
The Directors expressed their appreciation for the contribution made by
the employees in the progress of the Company.
DirectorÂs Responsibility Statement
Pursuant to Section 217(2AA) of the Companies Act, 1956 (Act) the
Directors based on the representation received from the Operating
Management, confirm that:Â
i. In the preparation of the Annual Accounts, the applicable accounting
standards have been followed and that there are no material departures;
ii. The Directors have selected such accounting policies and applied
them consistently made judgments and estimates that are reasonable and
prudent so as to give a true and fair view of the affairs of the
Company at the end of the financial year March 31, 2013 and of the
profits of the Company for that period.
iii. The Directors have taken proper and sufficient care for
maintenance of adequate accounting records in accordance with the
provisions of the Act for safeguarding the assets of the Company and
for preventing, detecting fraud and other irregularities.
iv. The Directors had prepared the Annual Accounts on a going concern
basis.
Energy conversion, Technology Transfer and Foreign Exchange Earnings
and outgo
The information required under Section 217(1)(e) of the Companies Act,
1956 read with the Companies (Disclosure of Particulars in the Report
of Board of Directors) Rules, 1988 is furnished in Annexure I.
Corporate Governance
As required by Clause 49 of the Listing Agreement with the Stock
Exchanges, the report on Management Discussion & Analysis, Corporate
Governance as well as the AuditorÂs certificate on the compliance of
Corporate Governance, form part of the Annual Report.
Business Responsibility Report
The Business Responsibility Report in accordance with Clause 55 of the
Listing Agreement is not a mandatory requirement for the Company.
Acknowledgement
The Directors thank the CompanyÂs customers, vendors, investors and
bankers for their continued support during the year.
For and behalf of the Board of Directors
Place: Mumbai R.K.Krishna Kumar
Date: May 16, 2013 Chairman
Mar 31, 2012
The Directors have pleasure in presenting the forty second Annual
Report of the Company together with its Audited Statement of Accounts
for the year ended March 31, 2012
Financial Results:
Rs.lakhs
Year ended March 31
2012 2011
1. Profit before tax amounted to 1881 3206
Deducting there from :
Provision for tax
Current 383 948
Minimum Alternate Tax (383)
Deferred 618 29
Profit after tax 1263 2229
Balance brought forward
from previous year 6537 6469
The distributable profit
amounted to: 7800 8698
2. Dividend
(a) The Board of Directors
has recommended payment of
Dividend of 804 1429
Rs.0.45 (45%) per Equity
Share of Rs 1 each {Previous Year :
Rs.0.80 (80%)} per Equity Share of
Rs.1/- each was declared and paid)
(b) Tax on dividend 130 232
3. Amount transferred to General
Reserve and Debenture Redemption
Reserve 315 500
Balance carried forward 6551 6537
Earnings per share
(Equity shares par value Rs.1/-
Previous year Rs 1/-) 0.71 1.25
Operating Results:
Average Room Rates across the key domestic markets grew by 7% during
2011/12 as compared to the previous year. All the hotels showed a
growth in ARRs.
Occupancy across the hotel units of the Company was 64% as compared to
68% in the previous year. Room inventory grew by 200 RPD due to
additional inventory at Vivanta by Taj Fisherman's Cove and Vivanta
by Taj, Surya - Coimbatore, which was opened on January 19, 2012 with
180 rooms.
The Chennai market had reported occupancies of 65% and ARR of Rs 6,753
as against 67% and Rs 6,813 in the previous year.
The Company recorded 13% increase in turnover at Rs 27021 lakhs for the
year ended March 31, 2012. Room Income improved by 12% over the
previous year. The occupancy declined to 64% from 68% and the ARR
increased by 7% over the previous year. Food and Beverage Income was
10% higher than that of the previous year. Increase in room and F & B
income was due to income from Vivanta by Taj - Surya, Coimbatore opened
during the year under review.
Profit before tax at Rs 1881 lakhs was 41% lower while profit after tax
at Rs 1263 lakhs was 43% lower than that of the previous year. The
Company is taking the benefit under Section 35AD of the Income Tax Act
on the capital expenditure incurred on Coimbatore hotel and
consequently the company has deferred tax to the future years after
payment of Minimum Alternate Tax (MAT).
Consolidated Financial Results:
The consolidated turnover of the Company for the year ended March 31,
2012 aggregated to Rs 32742 lakhs as against Rs 28286 lakhs for the
previous year. The profit after tax aggregated to Rs 2249 lakhs as
against Rs 2917 lakhs for the previous year.
Dividend:
Your Directors recommend a dividend of Rs 0.45 (45%) per equity share of
Rs 1/- each for the financial year ended March 31, 2012. The total
amount of dividend outgo will be Rs 934 lakhs which includes the tax on
dividend amounting to Rs 130 lakhs as against Rs 1429 lakhs as dividend
and Rs 232 lakhs as tax on dividend for the previous year. The Dividend,
if approved by the Members at the forthcoming Annual General Meeting,
will be paid within 30 days thereof i.e. on or before August 15, 2012
to the Members whose names appear on the Register of Members as on July
17, 2012. In respect of Members holding shares in electronic form, the
dividend will be paid to those Members whose names appear in the
beneficial holders list as furnished by the Depositories for this
purpose. The dividend income is not taxable in the hands of the
shareholders.
Borrowings:
Total borrowings stood at Rs 29237 lakhs as at March 31, 2012 as against
Rs 21468 lakhs as on March 31, 2011 for the standalone entity. The
consolidated debt stood at Rs 31549 lakhs as on March 31, 2012 as
against Rs 23341 lakhs as on March 31, 2011.
The Company raised Rs 100 crores by issuing 10.4% Non Convertible
Debentures which was used for repayment of existing loans and to meet
construction of Coimbatore hotel, expansion of Fisherman's Cove and
renovation activities at Taj Coromandel.
Capital Expenditure:
During the year under review, the Company incurred Rs 9008 lakhs towards
capital expenditure. Major expenditure was incurred for the
construction of Vivanta by Taj Surya, Coimbatore, expansion of Vivanta
by Taj- Fisherman's Cove and renovation activities at Taj Coromandel.
Business overview:
The resilience shown by the Indian economy in 2009/10 and 2010/11 gave
way and there was a significant slowdown in economic activities during
2011/12. Gross Domestic Product (GDP) slipped to 6.9% in 2011/12.
Industrial sector performed poorly retreating to a 27% share of the
GDP. Overall growth during April - December reached 3.6% as compared to
8.3% in the corresponding period of the previous year.
Inflationary pressures continued to persist through 2011/12 with an
increase in the latter part of the year due to higher than anticipated
rise in food and oil prices. Inflation was high during most of the year
2011/12. The year witnessed a sharp increase in interest rates that
resulted in higher costs of borrowings; and other rising costs
affecting profitability thereby impacting internal accruals that could
be used to finance investment.
Foreign tourist arrivals (FTAs) in India during 2011 were 6.29 million
with a growth rate of 8.9% as compared to 5.78 million in 2010 with a
growth rate of 11.8% over 2009. The 8.9% growth rate is much better
than UNWTO's projected growth rate of 4% to 5% for the world during
the same period. Foreign Exchange Earnings from tourism in Rupee terms
during 2011 were Rs 77591 crores with a growth rate of 19.6% as compared
to Rs 64889 crores with a growth rate of 18.1% during 2010 over 2009.
Despite a whole host of challenges over the past decade - from
terrorist attacks and health scares to natural disasters -
international travel and tourism demand has shown phenomenal growth.
Subsidiary Company:
Vide General Circular No. 3/2011 - N. 5/12.2007-CL-III dated February
21, 2011, the Ministry of Corporate Affairs, Government of India had
granted general permission to Companies wherever the holding company
gives its consent and comply with the conditions prescribed by the
Ministry. Accordingly, Companies are required to comply with the
conditions prescribed in order to avail the exemption from attaching
the balance sheet, profit and loss statement, etc. of the subsidiary
company in the Annual Report of the Holding Company. Your company has
complied with the conditions stipulated by the ministry as detailed
hereunder:
i. The Board of Directors of the Company has by a resolution given its
consent for not attaching the Balance Sheet, Profit and Loss Statement
etc. of the subsidiary, OHL International (HK) Ltd.;
ii. In the annual report, the Consolidated Financial Statements of the
company and its subsidiary, OHL International (HK) Ltd. duly audited by
statutory auditors are presented;
iii. The company has prepared the Consolidated Financial Statement in
strict compliance with the applicable Accounting Standards and Listing
Agreement as prescribed by SEBI;
iv. Capital, reserves, total assets, total liabilities, details of
investment (except investments in the subsidiary), turnover, profit
before and after taxation and provision for taxation and proposed
dividend are disclosed in the consolidated balance sheet;
v. The company has undertaken in its annual report that the annual
accounts of the subsidiary company and related information shall be
made available to shareholders of the holding and subsidiary company
seeking such information at any point of time. The annual accounts of
the subsidiary company shall also be kept for inspection by any
shareholder in the corporate office of the company and of the
subsidiary company and a note to the above effect is included in the
annual report of the company. The company shall furnish a hard copy of
details of accounts of subsidiary to any shareholder on demand;
vi. The company as well as its subsidiary company, OHL International
(HK) Ltd. shall regularly file such data to the various regulatory and
Government authorities as may be required by them;
vii. The company shall give Indian rupee equivalent of the figures
given in foreign currency appearing in the accounts of the subsidiary
company OHL International (HK) Ltd. along with exchange rate as on the
closing day of the financial year.
Hence the accounts of the Subsidiary, OHL International (HK) Ltd. are
not appended to the Annual Report. However, the Consolidated Financial
Statement of the Subsidiary, Joint Ventures and Associates prepared in
strict compliance with Accounting Standard 21 and the Listing
agreement, duly audited by the Statutory Auditors form part of the
Annual Report.
The Financial Statements of the Subsidiary Company and other related
detailed information are available at the office of the Company
Secretary at any point of time. The Annual Accounts of the Subsidiary
Company will also be available for inspection at the office of the
Company Secretary and the Subsidiary Company.
Listing:
The Equity Shares of your Company are listed on Madras Stock Exchange
Limited, Chennai, Bombay Stock Exchange Limited, Mumbai, and National
Stock Exchange of India Limited, Mumbai and the Global Depositary
Receipts (GDRs) are listed on Luxembourg Stock Exchange. Listing fees
to the Stock Exchanges have been paid by the Company.
Fixed Deposits:
The Company discontinued acceptance of fixed deposits effective from
February 17, 2003. The Company also discontinued renewal of existing
deposits with effect from July 2009. Liability on account of Fixed
Deposits amounted to Rs 5.80 lakhs (Previous year Rs 8.30 lakhs) which
includes 34 deposits amounting to Rs 5.40 lakhs which remained unclaimed
as on March 31, 2012 for want of instructions from the depositors.
Product up gradation and expansion:
The 180-room hotel in Coimbatore, Vivanta by Taj Surya, was
commissioned during the year under review. The expansion block in
Vivanta by Taj-Fisherman's Cove was also completed with the
commissioning of the balance 14 rooms. A comprehensive renovation plan
at Taj Coromandel has been under implementation for the past few years.
The south Indian restaurant, Southern Spice has been recently
renovated.
Donation:
Donations and contributions to social causes amounted to Rs 15 lakhs
during the year under report.
Directors:
In accordance with the provisions of the Companies Act, 1956 and the
Articles of Association of the Company, Mr. R K Krishna Kumar, Mr.
Pramod Ranjan and Mr. Arun Nanda, Directors, retire by rotation and
being eligible have offered themselves for reappointment.
Directors' Responsibility Statement:
Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors
based on the representations received from the Operating Management,
confirm:-
a. that in the preparation of the annual accounts, the applicable
accounting standards have been followed and that there are no material
departures;
b. that they have selected such accounting policies and applied them
consistently and made judgments and estimates that are reasonable and
prudent so as to give a true and fair view of the state of affairs of
the Company at the end of the financial year i.e. March 31, 2012 and of
the profit of the Company for the year ended March 31, 2012;
c. that they have taken proper and sufficient care to the best of
their knowledge and ability for the maintenance of adequate accounting
records in accordance with the provisions of the Act for safeguarding
the assets of the Company and for preventing and detecting fraud and
other irregularities; and
d. that they have prepared the annual accounts on a going concern
basis.
Auditors:
The Auditors Messrs. Brahmayya & Co., Chartered Accountants and Messrs.
SNB Associates, Chartered Accountants, Chennai retire at the
forthcoming Annual General Meeting and are eligible for reappointment.
The Members are requested to re-appoint M/s. Brahmayya & Co., Chartered
Accountants and SNB Associates, Chartered Accountants as Joint
Statutory Auditors of the Company to hold office until the conclusion
of the next Annual General Meeting of the Company and authorize the
Board of Directors to fix their remuneration.
Energy conversion, Technology Transfer and Foreign Exchange Earnings
and outgo:
The information required under Section 217(1)(e) of the Companies Act,
1956 read with Rule 2 of the Companies (Disclosure of Particulars in
the Report of Board of Directors) Rules, 1988 is furnished hereunder :
a. Electricity, furnace oil, diesel, petrol and cooking gas are
purchased at the prevailing market rates from the Government Agencies
at Chennai, Kochi, Trivandrum, Madurai, Connor, Coimbatore, Mangalore
and Visakhapatnam. To meet its energy requirements, the Company has
entered into a power purchase agreement for purchase of green power. As
a step towards energy conservation, the Company had installed solar
water heating systems at its hotels to reduce power consumption and
also initiated several other measures including conduct of an Energy
Audit. The recommendations for conservation of energy based on the
Audit have been implemented in all the Company's hotel units so as to
derive maximum benefit in terms of reduction in the consumption of
energy and thereby reduce the power cost in the long run.
b. The activity of the Company is not covered under the list of
specified industries in the Schedule to the Rules as stated above.
c. The details on foreign exchange earnings and outgo are furnished in
Notes to Financial Statements (Refer Item Nos. 30, 31 and 32)
Particulars of employees:
The particulars of employees required to be furnished under section
217(2A) of the Companies Act, 1956, read with Companies (Particulars of
Employees) Rules, 1975, forms part of this Report. However, as per the
provisions of Section 219(1)(b)(iv) of the Companies Act, 1956, the
reports and accounts are being sent to all the Shareholders of the
Company excluding the statement of particulars of employees. Any
Shareholder interested in obtaining a copy may write to the Company
Secretary at the Corporate Office of the Company.
The Directors express their appreciation for the contribution made by
all the employees of the Company who, through their unstinted
cooperation have enabled the Company to achieve sustained operational
performance during the year.
Corporate Governance:
As required by Clause 49 of the Listing Agreement with the Stock
Exchanges, the report on Management Discussion and Analysis, Corporate
Governance as well as the Auditor's certificate on the compliance of
Corporate Governance, form part of the Annual Report.
Acknowledgements:
Your Directors thank the Company's clientele, vendors, investors and
bankers for their continued support during the year.
For and on behalf of the Board of Directors
Place: Bengaluru R K Krishna Kumar
08.05.2012 CHAIRMAN
Mar 31, 2011
The Directors have pleasure in presenting the Forty First Annual Report
of the Company together with its Audited Statement of Accounts for the
year ended March 31, 2011
Financial Results: Rs. in Lakhs
Year ended March 31, 2011
2011 2010
1. Profit before tax amounted to 3206 3537
Deducting therefrom :
Provision for tax
- Current 948 1280
- Deferred 29 (58)
-Fringe Benefit Tax - -
2229 2315
Profit after tax
Add: Utilised amount transferred from
Foreign Exchange
Earnings Reserve - 125
Balance brought forward from previous year 6469 6091
The distributable profit amounted to 8698 8531
2. Dividend
(a) The Board of Directors has recommended
payment of Divident of Rs. 0.80 (80%) per
Equity Share of Rs. 1/- each (Previous year
- a Divident of Rs. 7.50 (75%) per Equity
Share of Rs. 10 /- each was declared and
paid). 1429 1340
(b) Tax on dividend 232 222
3. Amount transferred to General Reserve 500 500
4. Balance carried forward 6537 6469
5. Earnings per share (Equity shares par
value Rs. 1/- each) 1.25 1.30*
Operating Results:
Average Room Rates across the key domestic markets grew by 9% during
2010-11 as compared to the
previous year mainly due to the increase in ARR in the second half of
the year. While Chennai and
Trivandrum continued to face the pressure on ARRs and showed a marginal
decline, all other hotels
showed a growth in ARRs.
Occupancies across the hotel units of the Company grew by 9% to 68%
against 62% last year. Almost all
cities except Mangalore showed a healthy growth in occupancies.
The Chennai market has reported occupancies of 67% and ARR ofRs. 6,844
for the year 2010-11. IT, Auto,
Financial Sectors were the key growth segments.
The Company recorded 18% increase in turnover at Rs. 23904 lakhs during
the year ended March 31, 2011,
as compared to the revenue earned during the previous year. Room Income
improved by 23% over the
previous year. The occupancy increased from 62% to 68% and the ARR
increased by 9% over the previous
year. Food and Beverage Income was 22% higher than that of the previous
year. Increase in room and F
& B income was also due to income from Vivanta by Taj, Trivandrum for
the full year.
Profit before tax at Rs. 3206 lakhs was 9% lower than that of the
previous year and profit after tax at Rs. 2229 lakhs was 4% lower than
that of the previous year.
Consolidated Financial Results:
The consolidated turnover of the Company for the year ended March
31,2011 aggregated to Rs. 28286 lakhs as against Rs. 22934 lakhs for the
previous year. The profit after tax aggregated to Rs. 2976 lakhs as
against Rs. 1991 lakhs for the previous year.
Sub-division of Equity Shares:
Pursuant to the Members approval through postal ballot, the Equity
Shares of the Company were subdivided from a face value ofRs. 10/- each
to a face value ofRs. 1/- each, with effect from November 12, 2010.
Dividend:
Your Directors recommend a dividend ofRs. 0.80 (80%) per equity share ofRs.
1/- each for the financial year ended March 31,2011. The total amount
of dividend outgo will be Rs. 1661 lakhs which includes the tax on
dividend amounting to Rs. 232 lakhs as against Rs. 1340 lakhs as dividend
and Rs. 222 lakhs as tax on dividend for the previous year. The Dividend,
if approved by the Members at the forthcoming Annual General Meeting,
will be paid within 30 days thereof i.e. on or before August 26, 2011
to the shareholders/ beneficial holders whose names appear on the
Register of Members/ Beneficial Holders list as on July 28, 2011. The
dividend income is not taxable in the hands of the shareholders.
Borrowings:
Total borrowings stood at Rs. 21668 lakhs as at March 31, 2011 as against
Rs. 19066 lakhs as on March 31, 2010 for the standalone entity. The
consolidated debt stood at Rs. 24848 lakhs as on March 31, 2011 as
againstRs. 21501 lakhs as on March 31, 2010.
Capital Expenditure:
During the year under review, the Company incurred Rs. 8717 lakhs towards
capital expenditure. Major expenditure was incurred for the ongoing
construction of a hotel in Coimbatore, expansion of Vivanta by
Taj-Fishermans Cove and renovation activities at Taj Coromandel.
Business overview:
The recovery in economic activity witnessed in 2009/10 was sustained
during the year 2010/11. Gross Domestic Product (GDP) increased by 8.6%
in 2010/11 compared to a growth of 8% during 2009/10. Industrial
growth remained strong during the first half of 2010/11 with the Index
for Industrial Production (IIP) recording an average growth of over
10%. However, there was some moderation during the subsequent months,
partly due to an adverse base effect.
Inflationary pressures continued to persist through 2010/11 with an
increase in the latter part of the year due to higher than anticipated
rise in food and oil prices. Inflation, measured by the Wholesale Price
Index (WPI), after declining from a high of 11% at the beginning of the
year to about 8.1% in November 2010 continued to remain at elevated
levels of about 8% for the remaining part of the year. Inflationary
pressures, though largely emanating from food and fuel prices, became
broad based as manufactured products inflation showed an increase from
February 2011.
According to the Tourism Satellite Accounting (TSA) research released
in March 2011 by World Travel and Tourism Council (WTTC) and its
research partner Oxford Economics, the direct contribution of travel
and tourism to GDP is expected to grow by 8. lper cent per annum (p.a)
to US$ 76.65 billion (2 per cent of GDP) for 2011-2021 period, while
the total contribution is expected to be US$ 82.61 billion in 2011 (4.5
per cent of GDP). It is forecasted to rise by 8.8 per cent per annum
for 2011-21, accounting for 4.9 per cent of GDP.
The hotel and tourism industrys contribution to the Indian economy by
way of foreign direct investments (FDI) inflows were pegged at US$ 2.35
billion from April 2000 to February 2011, {source: Department of
Industrial Policy and Promotion (DIPP)}. Indias hotel pipeline is the
second largest in the Asia-Pacific region and Indian hospitality
industry is expected to grow at a rate of 8.8 per cent during 2007-16,
making the country as the second-fastest growing tourism market in the
world. The domestic hospitality sector is expected to see investments
of over US$ 11 billion by 2012, with 40 international brands making
their presence in the country in the next few years.
2010 saw a revival in foreign tourist arrivals after the slump in 2009
on account of the slow down. FT As in India during 2010 were 5.58
million with a growth rate of 8.1% as compared to the FTAs of 5.17
million versus de-growth of 2.2% in 2009.
Subsidiary Company:
Your Company has obtained an exemption from the Ministry of Corporate
Affairs, (MCA), Government of India, vide its letter No.
47/44/2011-CL-III dated January 28, 2011 from publication of the
accounts of its Subsidiary, OHL International (HK) Limited, under the
provisions of Section 212 of the Companies Act, 1956 and hence the the
Balance Sheet, Profit and Loss Account and other documents of the
Subsidiary Company are not appended to the Annual Report. However, the
Consolidated Financial Statement of its Subsidiary, Joint Ventures and
Associates prepared in strict compliance with Accounting Standard 21
and the Listing agreement, duly audited by the Statutory Auditors form
part of the Annual Report.
The Financial Statements of the subsidiary company and other related
detailed information are available at the office of the Company
Secretary at any point of time. The Annual Accounts of the subsidiary
company will also be available for inspection at the office of the
Company Secretary and the office of the Subsidiary Company.
Listing:
The Equity Shares of your Company are listed on Madras Stock Exchange
Limited, Chennai, Bombay Stock Exchange Limited, Mumbai, and National
Stock Exchange of India Limited, Mumbai and the Global Depositary
Receipts (GDRs) are listed on Luxembourg Stock Exchange. Listing fees
to the Stock Exchanges have been paid for the year 2011 /12.
Fixed Deposits:
The Company discontinued acceptance of fixed deposits effective from
February 17, 2003. The Company also discontinued renewal of existing
deposits with effect from July 2009. Liability on account of Fixed
Deposits amounted to Rs. 8.30 lakhs (Previous year Rs. 14.89 lakhs) which
includes 34 deposits amounting to Rs. 5.40 lakhs which remained unclaimed
as on March 31, 2011 for want of instructions from the depositors.
Product up gradation and expansion:
Construction of the 180-room Vivanta by Taj hotel in Coimbatore is
progressing as planned. 50 of the 64 rooms in the expansion block in
Vivanta by Taj-Fishermans Cove have been completed while work on
the balance 14 rooms is currently underway. A comprehensive renovation
plan at Taj Coromandel has been under implementation for the past few
years. A new swimming pool has been completed, retail shops are ready
for handing over to lessees, lobby, reception and lounge, entrance
areas of the hotel, including the entry driveway and porte cochere,
have recently been renovated.
Donation:
Donations and contributions to social causes amounted to Rs. 9 lakhs
during the year under report. Directors:
Mr. Ramesh D Hariani who was appointed as a Director of the Company in
the casual vacancy caused by the resignation of Mr. Anil P Goel to hold
office up to the date of the forthcoming Annual General Meeting, being
eligible, seeks appointment by the Members at the forthcoming Annual
General Meeting.
In accordance with the provisions of the Companies Act, 1956 and the
Articles of Association of the Company, Mr. Raymond N Bickson, Mr. D R
Kaarthikeyan and Mr. D Vijayagopal Reddy, Directors, retire by rotation
and being eligible have offered themselves for reappointment.
Directors Responsibility Statement:
Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors
based on the representations received from the Operating Management,
confirm:-
a. that in the preparation of the annual accounts, the applicable
accounting standards have been followed and that there are no material
departures;
b. that they have selected such accounting policies and applied them
consistently and made judgments and estimates that are reasonable and
prudent so as to give a true and fair view of the state of affairs of
the Company at March 31,2011 and of the profit of the Company for the
financial year ended on March 31,2011;
c. that they have taken proper and sufficient care to the best of
their knowledge and ability for the maintenance of adequate accounting
records in accordance with the provisions of the Act for safeguarding
the assets of the Company and for preventing and detecting fraud and
other irregularities; and
d. that they have prepared the annual accounts on a going concern
basis. Auditors:
The Auditors Messrs. Brahmayya & Co., Chartered Accountants and Messrs.
SNB Associates, Chartered Accountants, Chennai retire at the
forthcoming Annual General Meeting and are eligible for reappointment.
The Members are requested to re-appoint M/s. Brahmayya & Co., Chartered
Accountants and SNB Associates, Chartered Accountants as Joint
Statutory Auditors of the Company to hold office until the conclusion
of the next Annual General Meeting of the Company and authorize the
Board of Directors to fix their remuneration.
Energy conversion, Technology Transfer and Foreign Exchange Earnings
and outgo:
The information required under Section 217(l)(e) of the Companies Act,
1956 read with Rule 2 of the Companies (Disclosure of Particulars in
the Report of Board of Directors) Rules, 1988 is furnished here- under
:
a. Electricity, furnace oil, diesel, petrol and cooking gas are
purchased at the prevailing market rates from the Government Agencies
at Chennai, Kochi, Trivandrum, Madurai, Coonoor, Mangalore and
Visakhapatnam. To meet its energy requirements, the Company has entered
into a power purchase agreement for purchase of green power. As a step
towards energy conservation, the Company had installed solar water
heating systems at some of its hotels to reduce power consumption and
also initiated several other measures including conduct of an Energy
Audit. The recommendations for conservation of energy based on the
Audit have been implemented in all the Companys hotel units so as to
derive maximum benefit in terms of reduction in the consumption of
energy and thereby reduce the power cost in the long run.
b. The activity of the Company is not covered under the list of
specified industries in the Schedule to the Rules as stated above.
c. The details on foreign exchange earnings and outgo are furnished in
Notes to the Accounts (Refer Item Nos. 9 and 10)
Particulars of employees:
The particulars of employees required to be furnished under section
217(2A) of the Companies Act, 1956, read with Companies (Particulars of
Employees) Rules, 1975, forms part of this Report. However, as per the
provisions of Section 219(l)(b)(iv) of the Companies Act, 1956, the
reports and accounts are being sent to all the Shareholders of the
Company excluding the statement of particulars of employees. Any
Shareholder interested in obtaining a copy may write to the Company
Secretary at the Corporate Office of the Company.
The Directors express their appreciation for the contribution made by
all the employees of the Company who, through their unstinted
cooperation have enabled the Company to achieve sustained operational
performance during the year.
Corporate Governance:
As required by Clause 49 of the Listing Agreement with the Stock
Exchanges, the report on Management Discussion and Analysis, Corporate
Governance as well as the Auditors certificate on the compliance of
Corporate Governance, form part of the Annual Report.
Acknowledgements:
Your Directors thank the Companys clientele, vendors, investors and
bankers for their continued support during the year.
For and on behalf of the Board of Directors
Place: Mumbai R K Krishna Kumar
Date : 13.05.2011 CHAIRMAN
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