Mar 31, 2023
The Board of Directors of your Company, with immense pleasure, present the Thirty Seventh Annual Report of your Company along with the Audited Balance Sheet, Statement of Profit and Loss, Statement of changes in equity and Cash Flow Statement (Standalone and Consolidated), Schedules and Notes to Accounts for the year ended March 31, 2023.
The Companyâs financial performance, for the financial year ended March 31, 2023 on standalone and consolidated basis is summarized below:
(Rs. in Lakhs) |
||||
Particulars |
As on March 31, 2023 |
As on March 31, 2022 |
||
Consolidated |
Standalone |
Consolidated |
Standalone |
|
Revenue from operations |
26,354.88 |
16,994.62 |
13,852.39 |
7,973.90 |
Other Income |
1,613.88 |
667.02 |
1,740.74 |
851.27 |
Total revenues |
27,968.76 |
17,661.64 |
15,593.13 |
8,825.17 |
Food and Beverages Consumed |
2,671.73 |
1,777.18 |
1,727.99 |
1,110.31 |
Employee Benefit Expenses |
5,597.41 |
2,855.58 |
3,468.31 |
1,622.96 |
Finance Costs |
1,605.02 |
1,205.80 |
1,609.71 |
885.76 |
Depreciation |
1,837.18 |
1,132.71 |
1,944.33 |
854.87 |
Other Expenses |
9,897.08 |
6,843.52 |
6360.94 |
3,738.22 |
Total Expenses |
21,608.42 |
13,814.79 |
15,111.28 |
8,212.12 |
Profit before exceptional items, tax and minority interest |
6,360.34 |
3,846.85 |
481.85 |
613.05 |
Exceptional Item |
- |
- |
2,505.34 |
(501.66) |
Profit before tax and minority interest |
6,360.34 |
3,846.85 |
2,987.19 |
111.39 |
Tax expense |
1,666.53 |
1,029.25 |
308.73 |
184.03 |
Profit/(Loss) for the year |
4,693.81 |
2,817.60 |
2,678.46 |
(72.64) |
Share of profit of associate |
228.50 |
- |
- |
- |
Net Profit for the year and share of profit of associate |
4922.31 |
2,817.60 |
2,678.46 |
(72.64) |
Other comprehensive income/(loss), net of tax |
76.52 |
4.93 |
9.25 |
(12.39) |
Total comprehensive income/(loss) for the year |
4,998.83 |
2,822.53 |
2,687.71 |
(85.03) |
External Environment & Indian Hospitality Industry
The details of the External Environment & Indian Hospitality Industry and Business Overview are given in the Managementâs Discussion and Analysis Report.
Key Financial and Operational Highlights:
Standalone performance:
During the financial year 2022-23, the Company earned revenue from operations amounting to Rs. 16,994.62 lakhs as compared to Rs. 7973.90 lakhs in the previous financial year, thus marking an increase of 113.13% over the previous financial year. Total revenues of the Company have increased by Rs. 8,836.47 lakhs over the previous financial year. The Company incurred total comprehensive Income of Rs. 2,822.53 Lakhs during the year ended March 31, 2023 as compared to Rs. (85.03) lakhs in the previous financial year, thus registering an increase of 3419.45% over the previous financial year.
Consolidated/Group performance:
During the financial year 2022-23, the Group earned revenue from operations amounting to Rs. 26,354.88 lakhs as compared to Rs. 13,852.39 lakhs in the previous financial year, thus marking a growth of 90.26% over the previous financial year. The Group generated total comprehensive income of Rs 4,998.83 lakhs during the year ended March 31, 2023 as compared to income of Rs. 2,687.71 lakhs in the previous financial year, thus registering a growth of 85.99% over the previous financial year.
Changes in nature of Business:
During the year under review, there was no change in the nature of Companyâs business.
Share Capital of the Company and changes thereof:
During the financial year under review, the issued and paid-up share capital of the Company was Rs.2,742.52 Lakhs divided into 27,425,215 equity shares of face value of Rs. 10 per share. In the Financial Year 2022-23 none of the Employees have exercised their Right under the Employee Stock Option Plan.
Dividend and transfers to Reserve:
The Board recommended a dividend of Rs 2 /- per share fully paid Equity Share on 2,74,25,215 Equity Share of face value of Rs. 10/- each, for the year ended March 31, 2023.
Loans, Guarantees or Investments:
Your Company is exempt from the provisions of Section 186 of the Companies Act, 2013 (âActâ) with regard to Loans and Guarantees. Details of Investments made are given in Note No.7, 8 and 14 to the Standalone Financial Statements.
In terms of the provisions of Sections 73 and 74 of the Companies Act, 2013 read with Companies (Acceptance of Deposits) Rules, 2014, the Company had no opening or closing balances of public deposits and during the year under review, the Company has also not accepted any public deposits and as such, no amount of principal or interest was outstanding as on March 31, 2023.
Material Changes and commitments affecting financial position between the end of financial year and date of report:
There have been no material changes and commitments, affecting the financial position of the Company which occurred between the end of the financial year to which the financial statements relate and the date of this report.
Significant and Material Orders passed by the Regulators or Courts or details of ongoing significant and material Court Cases:
SEBI passed an Interim Order against the treatment of KSDPL as a subsidiary company and had sent notice. Company had filed an appeal before Honourable Securities Appellate Tribunal (âSATâ) against the Interim Order Cum Show Cause Notice issued by SEBI and SAT on the hearing held on 09.05.2023 has passed a stay on the order cum show cause notice of SEBI.
The details of significant and material orders passed by the Regulators or Courts or details of ongoing significant and material Court cases has been provided in Note no. 63 of the Notes to Consolidated Financial Statement.
Revision in Financial statements or Boardsâ Report under section 131(1) of the Companies Act, 2013:
In terms of Section 131 of the Companies Act, 2013, the Financial Statements and Boardâs Report are in compliance with the provisions of Section 129 or Section 134 of the Companies Act, 2013 and that no revision has been made during any of the three preceding financial years.
Management Discussion and Analysis Report:
The Managementâs Discussion and Analysis Report on Companyâs performance - industry trends and other material changes with respect to the Company and its subsidiaries, wherever applicable, forms part of this Annual Report.
Subsidiaries, Associates and Joint Ventures:
During the year under review no company has become the Subsidiary, Associate or Joint venture of the Company.
Pursuant to Section 129 (3) of the Companies Act, 2013, a statement containing salient features, brief financial details of the Companyâs subsidiaries for the financial year ended March 31, 2023 and their contribution to the consolidated financials in Form AOC - 1 is appended as Annexure - I to the Boardsâ Report and in consolidated financials forming part of this Report. The annual accounts of the Subsidiary Companies and the related information will be made available to any Member of the Company seeking such information and are available for inspection by any Member of the Company at the Registered Office of the Company.
Pursuant to Section 136 of the Companies Act, 2013, the financial statements of your Company, Consolidated Financial statements along with relevant documents and separate audited accounts in respect of subsidiaries are available on the website of your Company at the following link: http://www.royalorchidhotels.com/investors
The policy for determining material subsidiaries can be accessed on your Companyâs website under the link http://www. royalorchidhotels.com/investors
The names of the Promoters and entities comprising âgroupâ (and their shareholding) are as follows:
S. No. |
Name of Promoter including Persons Acting in Concert |
Total Shareholding as on March 31, 2023 |
Percentage of Shareholding |
1. |
Chander Kamal Baljee |
1,07,56,595 |
39.22 |
2. |
Sunita Baljee |
3,26,260 |
1.19 |
3. |
Sunil Sikka |
19,000 |
0.07 |
4. |
Keshav Baljee |
0 |
0 |
5. |
Arjun Baljee |
0 |
0 |
6. |
Baljees Hotels and Real Estate Private Limited |
57,14,689 |
20.84 |
7. |
Hotel Stay Longer Private Limited |
2,29,337 |
0.84 |
8. |
Harsha Farms Private Limited |
3,97,200 |
1.45 |
Particulars of Contracts or Arrangements made with Related Parties under section 188(1) and (2) of the Companies Act, 2013:
In line with the requirements of the Act and the Listing Regulations, your Company has formulated a policy on dealing with Related Party Transactions (âRPTsâ) which can be accessed on the Companyâs website under the link: http://www. royalorchidhotels.com/investors
The Policy intends to ensure that proper reporting, approval and disclosure processes are in place for all transactions between the Company and Related Parties.
Prior omnibus approval is obtained for RPTs which are of a repetitive nature and entered in the Ordinary Course of Business and are at Armâs Length. A statement on RPTs specifying the details of the transactions, pursuant to each omnibus approval granted, has been placed on a quarterly basis for review by the Audit Committee. The particulars of contracts/arrangements with related parties referred to in Section 188(1) and (2) of the Companies Act, 2013, are provided in the prescribed Form AOC - 2, appended as Annexure - II to this Boardsâ Report.
Development in Human Resources and Industrial Relations:
The Company continues to maintain a very cordial and healthy relationship with its workforce across all its units.
The Company is ensuring the best place to work to attract and retain good employees in the Company. The Company continued to strive towards attracting, retaining, training, multiskilling employees. With the increase in workforce due to expansion in business, envisaging the requirement of adequate on-the-job training across the various levels of employees, a major thrust to the training and development of multiskilled certification programmes has been initiated through Presidency college of Hotel Management. Baljee Foundation continues to offer financial support for medical and educational needs of certain category of employees. The Human Resource Team carried out the following programs across the group during the year:
1. Online Hospitality Training Program
2. Food Festivals to make staff experience cuisines of multiple types
3. Plantation drive as an environmental awareness initiative.
4. Many Employees were recognized and rewarded with financial benefits under the service bonus program. It helps in recognizing and rewarding key talent and resulting in quality talent retention.
The disclosure pursuant to Section 197 (12) of the Companies Act, 2013 read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, (as amended up to date) have been detailed in the Annexure - III to this Boardsâ Report.
Conservation of energy, technology Absorption, Foreign exchange earnings and outgoes:
Your Company is continuously striving towards conservation of energy across all its units and has implemented various Energy Conservation programs and latest technology upgradation measures, your Company also earned foreign currency in Financial Year 2022- 2023, complete details of which has been disclosed in Annexure - IV to this Boards âReport.
Particulars of Loans/Guarantees/Investments:
The Company has not given any Inter Corporate loans during the financial year 2022-23, except for the subsidiaries & associate companies amounting to Rs.2702.64 lakhs, which were duly approved under the applicable provisions of the Companies Act, 2013. Particulars relating to Investments have been detailed in the Notes to Financial Statements, forming part of this Annual Report.
Your Company has been practising the principles of good corporate governance. Pursuant to Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (âLODRâ) (applicable from December 01, 2015), a detailed report on corporate governance is available as a separate section in this Annual Report.
A certificate of the Company Secretary in whole-time practice regarding compliance with the conditions stipulated in the said clause and the LODR is provided separately as an Annexure - A to the Corporate Governance Report.
Board of Directors and changes thereof during Financial Year 2022 - 2023:
As on March 31, 2023, your Board has following Directors:
S. No. |
Name |
DIN |
Category |
Designation |
1. |
Mr. C. K. Baljee |
00081844 |
Executive |
Chairman & Managing Director |
2. |
Mr. Sunil Sikka |
00083032 |
Non-Executive |
Non - Independent Director |
3. |
Mr. Keshav Baljee |
00344855 |
Non-Executive |
Non - Independent Director |
4. |
Mr. Naveen Jain1 |
00051183 |
Non-Executive |
Independent Director |
5. |
Ms. Lilian Jessie Paul2 |
02864506 |
Non-Executive |
Independent Director |
6. |
Mr. Bhaskar Pramanik |
00316650 |
Non-Executive |
Independent Director |
7. |
Mr. Ashutosh Chandra |
09766619 |
Non-Executive |
Independent Director |
8. |
Ms. Leena S Pirgal |
10042575 |
Non-Executive |
Independent Director |
As on March 31st 2023, your Board has following Statutory Committees:
a. Audit Committee;
b. Nomination and Remuneration Committee;
c. Stakeholders Relationship Committee;
The details of the composition, meetings held during the year, attendance at the meetings and the terms of reference of the above Committees of the Board are provided in the Corporate Governance Report.
Formal Annual evaluation of Board:
Pursuant to section 134 (3) (p) of the Companies Act, 2013 and Rule 8(4) of Companies (Accounts) Rules, 2014, it is mandatory to monitor and review the Board evaluation framework, the Board has carried out peer evaluation of all Board members, annual performance evaluation of its own performance, as well as the evaluation of the working of the Committees of Board as per the criteria laid down in the Nomination and Remuneration Policy. The said policy including above said criteria for the evaluation of the Board, individual Directors including Independent Directors and the Committees of the Board has been laid down in the Corporate Governance Report, which forms part of this report.
Meetings of the Board held during the Year:
During the year under review, your Board met 5 (Five) times on 30.05.2022, 05.08.2022, 21.10.2022, 09.11.2022 and 13.02.2023. All the Board Meetings were conducted in due compliance with Companies Act, 2013 and the Corporate Governance principles specified in the LODR.
Following are the details of Board Meeting and attendance of directors in the Board Meeting:
S. No. |
Date |
No. of directors entitled to attend the meeting |
No. of directors present |
1 |
30.05.2022 |
6 |
6 |
2 |
05.08.2022 |
6 |
6 |
3 |
21.10.2022 |
7 |
5 |
4 |
09.11.2022 |
5 |
5 |
5 |
13.02.2023 |
6 |
6 |
The details of sitting fees/ remuneration paid to the Directors are disclosed in the Corporate Governance Report.
Board Meetings were conducted in due compliance with Companies Act, 2013 and the Corporate Governance principles specified in the LODR.
The details of KMPs & Management Team of the Company are provided at the cover page of this Annual Report.
Policy on Directorsâ Appointment & Remuneration:
AH the policies pertaining to appointment and remuneration of Directors are available on your Companyâs website at: http://www. royalorchidhotels.com/investors
Declaration by Independent Directors:
As on March 31, 2023, your Company has following Independent Directors:
1. Mr. Bhaskar Pramanik
2. Mr. Ashutosh Chandra
3. Ms. Leena S Pirgal
In pursuance of Section 149(7) of the Companies Act, 2013, all the three Independent Directors of the Company have submitted, a declaration, under Section 149(6) of the Companies Act, 2013 and Regulation 16(1) (b) of the LODR, that they meet the criteria of independence.
Familiarisation programme for Independent Directors:
The Company has made a familiarisation programme for the Independent Directors, which has been disclosed on Companyâs website at www.royalorchidhotels.com/investors
Separate Meeting of Independent Directors and performance evaluation of Board by them:
In due compliance with the provisions of Regulation 25(3) of the LODR, a separate meeting of Independent Directors was held on 21.10.2022, to inter alia consider and discuss the performance of Non-Independent Directors, the Chairman and to assess the quality, quantity and timeliness of flow of information between the management of the listed entity and the Board in order to help the Board to perform its duties.
Audit Committee and its Recommendation(s):
In accordance with Section 177 of the Companies Act, 2013, rules made there under and Regulation 18 of the LODR, the Company has duly constituted the Audit Committee, details of which has been disclosed in the Corporate Governance Report forming part of this Annual Report and all recommendations made by the Audit Committee were accepted by the Board.
Nomination and Remuneration Committee:
In accordance with Section 178 of Companies Act, 2013 read with Rule 6 of Companies (Meetings of Board and its Powers) Rules, 2014 and Regulation 19 of LODR, the Company has constituted a Nomination and Remuneration Committee, details of which has been disclosed in the Corporate Governance Report forming part of this Annual Report and also on Companyâs website at www.royalorchidhotels.com/investors and your Company has also formulated Nomination and Remuneration Policy which is available website of the Company at: https://www. royalorch id hotels. com/investors
Stakeholdersâ Relationship Committee:
In terms of Section 178 of the Companies Act, 2013 read with Rule 6 of Companies (Meetings of Board and its Powers) Rules, 2014 and Regulation 20 of LODR, the Company has constituted a Stakeholdersâ Relationship Committee (erstwhile Shareholdersâ Grievance Committee), details of which, along with terms of reference, has been disclosed in the Corporate Governance Report forming part of this Annual Report and also on Companyâs website at
https://www.royalorchidhotels.com/investors
Statutory Auditor
The Shareholders at their 34th AGM held on 9th November, 2020 approved the appointment of M/s. Walker Chandiok & Co LLP, Chartered Accountants (Firm Registration No. 001076N/N500013) as the Statutory Auditors of the Company to hold the office from the conclusion of this 34th Annual General Meeting till the conclusion of 39th Annual General Meeting of the Company.
The Auditorsâ Report on the financial statements of the Company for the year ending March 31, 2023 is unmodified i.e. it does not contain any qualification, reservation or adverse remark. The Auditorsâ Report is enclosed with the financial statements forming part of this Annual Report.
Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board has appointed Mr. G. Shanker Prasad (ACS 6357), Practicing Company Secretary (COP No. 6450) to undertake the Secretarial Audit of the Company for Financial Year 2022- 2023.
There were no qualifications by the Secretarial Auditor in their Secretarial Audit Report in Form MR-3 for the Financial Year ended 31st March 2023 except those as mentioned below which was due to MCA site whose details are given below:
1. Regulation 17(1) Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 in respect of the requirements pertaining to the composition of the Board not complied with the failure to appoint the woman director in time.
The Company had paid the fine amount of Rs. 70,800 (Including GST) to the National Stock Exchange (âNSEâ) and the Bombay Stock Exchange (âBSEâ) under Regulation 17(1) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 and company had applied for Waiver of fine on representation that the delay was due to issue in the MCA site i.e. DIN was not getting generated which is required for the appointment of Independent Director.
Therefore, there were a slight delay of few days i.e. 12 Days, due to MCA V3 Portal issues/glitches.
2. Regulation 18(1) Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 in respect of the requirements pertaining to constitution of the audit committee.
The Company had paid the fine amount of Rs. 28,320 (Including GST) to the National Stock Exchange (âNSEâ) and the Bombay Stock Exchange (âBSEâ) under Regulation 18(1) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 and company had applied for Waiver of fine on representation that the delay was due to issue in the MCA site i.e. DIN was not getting generated which is required for the appointment of Independent Director.
Therefore, there were a slight delay of few days i.e. 12 Days, due to MCA V3 Portal issues/glitches, with respect to constitution of committee.
3. Regulation 19(1) / 19(2) Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 in respect of the requirements pertaining to constitution of nomination and remuneration committee.
The Company had paid the fine amount of Rs. 28,320 (Including GST) to the National Stock Exchange (âNSEâ) and the Bombay Stock Exchange (âBSEâ) under Regulation 19(1)/19(2) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 and company had applied for Waiver of fine on representation that the delay was due to issue in the MCA site i.e. DIN was not getting generated which is required for the appointment of Independent Director.
Therefore, there were a slight delay of few days i.e. 12 Days, due to MCA V3 Portal issues/glitches, with respect to constitution of committee.
4. Regulation 3(5) & 3(6) SEBI (Prohibition of Insider Trading) Regulations, 2015 were not complied with in that there was one instance of purchase of 425 shares by Mr. Sunil Sikka, Promoter Non-Executive director during the period when trading window was closed.
The Company has reported this incident to the Audit Committee and Explanation received from Mr. Sunil Sikka is that he erroneously missed the closure intimation email sent by the Company and purchased 425 shares on January 02, 2023, after the closure of trading window. The Audit Committee discussed this matter and directed issue of Cautionary Letter, which has been issued by the Compliance Officer of the Company and same has been reported to the stock exchanges on 13-Feb-2023.
The issues faced by the Company along with detailed justification is available at the Waiver Application which is at the website of the Company i.e. www.royalorchidhotels.com/investors.
The aforesaid report is appended as Annexure - V to this Boardâs Report. The Secretarial Audit Reports of material subsidiaries of the Company are attached as Annexure - VI.
The details of the Credit Rating of the Company are given in point no. 10A of the Corporate Governance Report forming part of this Annual Report.
Corporate Social Responsibility:
In accordance with Section 135 of Companies Act, 2013 read with Companies (Corporate Social Responsibility Policy) Amendment Rules, 2021, the provisions of CSR are not applicable to the company. Hence, the disclosure related to CSR are not given in this report.
In line with the philosophy of ROHL, your Company is committed to following sustainable practices in its operations. The details of the initiatives taken by your Company in this regard are given in Annexure-IV attached to this report.
Business Responsibility Report:
The requirement of Business Responsibility Report under clause (f) of sub-regulation (2) of Regulation 34 of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirement) Regulations, 2015 is not applicable to the Company.
The Company has established an effective Compliance Mechanism to mitigate the risk and will be reviewed by the Board periodically. The Company has adopted Risk Management Policy, pursuant to the provision of Section 134 of the Act, to identify and evaluate business risks and approach for mitigation of such risks. The Company has identified various risks and also has mitigation plans for each risk identified and reviewed periodically.
Based on the requirements under SEBI (Prohibition of Insider Trading) Regulations, 2015 (erstwhile, SEBI (Prohibition of Insider Trading) Regulations, 1992), as amended till date, the Code of Conduct for prevention of Insider Trading and the Code of fair disclosure, as approved by the Board from time to time, are enforced by the Company.
The Company has adopted a Code of Conduct to regulate, monitor and report trading by insiders under the SEBI (Prohibition of Insider Trading) Regulations, 2015. This Code of Conduct also includes code for practices and procedures for fair disclosure of unpublished price sensitive information and this is made available on the Companyâs website: https://www.royalorchidhotels.com/investors
The objective of this Code is to protect the interest of Stakeholders at large, to prevent misuse of any price sensitive information and to prevent any insider trading activity by dealing in shares of the Company by its Directors, Officers and Designated Employees. The Company also adopts the concept of Closure of Trading Window, to prevent its Directors, Officers, Designated Employees and other employees from trading in the securities of the Company at the time when there is unpublished price sensitive information.
Vigil Mechanism and Whistle Blower Policy:
The Board of Directors of your Company has adopted the Vigil Mechanism and Whistle Blower Policy in compliance with Section 177(9) and (10) of the Companies Act, 2013 and regulations specified under LODR.
The Company has adopted a channel for receiving and redressing of employeesâ complaints. Under this policy, we encourage our employees to report any reporting of fraudulent financial or other information to the stakeholders, any conduct that results in violation of the Companyâs Code of Business Conduct. Likewise, under this policy, we have prohibited discrimination, retaliation or harassment of any kind against any employees who, based on the employeeâs reasonable belief is of the opinion that such conduct or practice have occurred or are occurring. No individual in the Company has been denied access to the Audit Committee or its Chairman.
The Whistle Blower policy can be accessed on your Companyâs website at the link: https://www.royalorchidhotels.com/investors
The Audit Committee periodically reviews the functioning of this mechanism. This meets the requirement under the said provisions above.
Employeesâ Stock Options represent a reward system based on overall performance of the individual employee and the Company. It helps the Company to attract, retain and motivate the best available talent. This also encourages employees to align individual performances with those of the Company and promotes increased participation by the employees in the growth of the Company.
During the year under review, pursuant to SEBI (Share Based Employee Benefits) Regulations, 2014 (as amended from time to time), no options were granted to the employees.
Your Company has received a certificate from Practicing Company Secretary that the scheme has been implemented in accordance with SEBI (Share Based Employee Benefits) Regulations, 2014. The certificate was placed at the 36th Annual General Meeting for inspection by Members of the Company.
Details required to be provided under Regulation 13 of the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 are available on the Companyâs website at: https://www.royalorchidhotels.com/investors
Directorsâ Responsibility Statement:
Your Companyâs Directors make the following statement in terms of Section 134(5) of the Companies Act, 2013, which is to the best of their knowledge and belief and according to the information and explanations obtained by them:
1. In the preparation of the Annual Accounts for the year ended March 31, 2023, the applicable accounting standards read with requirements set out under Schedule III to the Act, have been followed and there are no material departures from the same;
2. The Directors 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 as at March 31, 2023 and of the profit of the Company for the year ended on that date;
3. The Directors 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;
4. The Directors have prepared the annual accounts on âa going concern basisâ;
5. The Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively;
Internal Financial Controls and their adequacy:
Your Company has an adequate internal controls system, commensurate with the size and nature of its business. The system is supported by documented policies, guidelines and procedures to monitor business and operational performance which are aimed at ensuring business integrity and promoting operational efficiency. The Company also has an Internal Auditor reporting to the Audit Committee. During the year under review, the Statutory Auditors and Secretarial Auditor have not reported any instances of frauds committed in the Company by its Officers or Employees to the Audit Committee under Section 143(12) of the Act, details of which needs to be mentioned in this Report.
Consolidated Financial Statements:
The Consolidated Financial Statements of the Company and its subsidiaries and associate company prepared in accordance with the Act and applicable Accounting Standards form part of this Annual Report.
For the purpose of preparation of the Consolidated Audited Financial Statements of the Company for the financial year ended March 31, 2023 as per Ind AS, the latest audited financial results of all the subsidiaries and associate company were considered and consolidation was done as per the provisions of Section 129 of the Act.
Pursuant to Section 92(3) read with section 134(3)(a) of the Companies Act, 2013, copies of the Annual Returns of the Company prepared in accordance with Section 92(1) of the Companies Act, 2013 read with Rule 11 of the Companies (Management and Administration) Rules, 2014 are placed on the website of the Company and is accessible at the web-link: https://www.royalorchidhotels.com/investors
Compliance with secretarial standards on Board Meetings and General Meetings:
The Company has complied with Secretarial Standards issued by the Institute of Company Secretaries of India on Board Meetings and General Meetings.
Payment of Listing Fee and Custodial Fee:
Your Company has paid the both, Annual Listing Fee and Annual Custodial Fee for the Financial Year 2022 - 2023, to the National Stock Exchange (âNSEâ) and the Bombay Stock Exchange (âBSEâ) and to National Securities and Depositories Limited (NSDL) and Central Depository Services (India) Limited (CDSL) respectively.
Commission or Remuneration received from Holding or subsidiary Companies:
During the year under review, no Commission or Remuneration was paid to the Executive Directors from Holding/Subsidiary Companies.
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 in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules there under, your Board of Directors has approved and adopted a âPolicy on Prevention of Sexual Harassment at Workplaceâ to provide equal employment opportunity and is committed to provide a work environment that ensures every woman employee is treated with dignity and respect and afforded equitable treatment.
During the year under review the Company has not received any complaints on sexual harassment. The Company has complied with the Information required under Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013.
The Company''s shares are available for dematerialization with both the Depositories viz., National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL). About 99.90% of the paid-up equity share capital of the Company has been dematerialized as on 31st March 2023.
Disclosure of Frauds in the Boardsâ Report under section 143 of the Companies Act, 2013:
During the year under review, your Directors did not observe any contract, arrangement and transaction which could result in a fraud; your Directors hereby take responsibility to ensure you that the Company has not been encountered with any fraud or fraudulent activity during the Financial Year 2022 - 2023.
Policies, Affirmations and Disclosures in line with ROHLâs philosophy for adhering to ethical and governance standards and ensure fairness, accountability, responsibility and transparency to all its stakeholders, ROHL inter-alia, has adopted all the applicable policies and codes. The aforesaid policies have been uploaded on the website at: https://www.royalorchidhotels.com/investors
The Details pursuant to Schedule V (A) (2) of SEBI (LODR), 2015 are as follows:
1. The company does not have any Holding Company, hence this disclosure is not applicable.
2. The loans and advances to Subsidiaries along with name and amounts are given in Note no. 45 to the notes to
accounts enclosed in the standalone financials.
3. There are no loans and advances given to any Firms / Companies where directors are Interested.
4. The Disclosures in the subsidiary Companies to the aforesaid regulations are available in the accounts of the
respective subsidiary companies which are available at the website of the company at the following web-link: https://www.royalorchidhotels.com/investors.
5. Details of transactions with entities belonging to Promoter/ Promoters Group are given in Note no. 45 to the Notes to Accounts enclosed in the standalone financials.
6. The provisions in respect of maintenance of cost records as specified under sub-section (1) of Section 148 of the Act are not applicable to your Company.
7. The Directors have 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.
8. During the year under review, no revision was made in the previous financial statements of the Company.
9. During the year under review, the Company has not made any application and there are no proceedings pending under the Insolvency and Bankruptcy Code, 2016.
10. The Company has not defaulted in repayment of any of its loans with Banks or Financial Institutions and hence the requirement of providing details of difference between amount of the valuation done at the time of one-time settlement and the valuation done while taking loan from the Banks / Financial Institutions along with the reasons thereof is not applicable to the Company.
1. During the year under review, the Company has not bought its own shares nor has given any loans to its employees (including Key Managerial Personnel) of the Company for purchase of the Companyâs shares.
2. Your Company provides e-voting facility, to all its members to enable them to cast their votes electronically on all resolutions set forth in the Notice. This is pursuant to the Section 108 of the Companies Act, 2013 and Rule 20 of the Companies (Management and Administration) Amendment Rules, 2015.
3. Other disclosures with respect to Boardâs Report as required under the Companies Act, 2013 and the Rules notified thereunder and Securities and Exchange Board of India (Listing Obligations and Disclosure Requirement) Regulations, 2015 are either NIL or NOT APPLICABLE.
4. Pursuant to clause q under sub-section 3 of section 134 of the Companies Act, 2013, the statutory disclosures required to be given in the Boardâs Report which are available in the financial statements are not repeated. They may be referred in the financial statements which forms a part of this Annual Report.
Acknowledgments
Your Directors place on record, their deep sense of appreciation to all Employees, support staff, for adopting to the values of the Company, viz., collaborative spirit, unrelenting dedication and expert thinking, to be an expertise led organization and the Companyâs Customers for letting us deliver the Companyâs Mission statement, to help the businesses and societies flourish. The Board also immensely thank all the Shareholders, Investors, Vendors, Service Providers, Bankers and all other Stakeholders for their continued and consistent support to the Company during the year.
Your Directors would like to make a special mention of the support extended by the various Banks, Departments of Government of India, the State Governments, the Tax Authorities, the Ministry of Commerce, Ministry of Tourism, Government of India, Karnataka State Tourism Development Corporation (KSTDC), Ministry of Corporate Affairs, Ministry of Finance, SEBI, NSE and BSE and others and look forward to their continued support in all future endeavors.
For and on behalf of the Board of Directors of Royal Orchid Hotels Limited
Tenure ended on October 24, 2022;
Tenure ended on November 01, 2022.
During the financial year 2022-23 the following changes took place in the Board:
Mr. Naveen Jain was Independent Director of the company whose tenure got over on October 24, 2022.
Mr. Ashutosh Chandra, was appointed as Additional Independent Director w.e.f. October 21, 2022 and the Shareholders of the Company approved his appointment as an Independent Director through postal ballot on February 27, 2023.
Ms. Lilian Jessie Paul was Independent Director of the company whose tenure got over on November 01, 2022.
Ms. Leena S Pirgal, was appointed as Additional Independent Director w.e.f. February 13, 2023 and the Shareholders of the Company approved her appointment as an Independent Director through postal ballot on March 27, 2023.
Mar 31, 2018
Dear Members,
The Board of Directors of your Company, with immense pleasure, present the Thirty Second Annual Report of your Company along with the Standalone and Consolidated Audited Balance Sheet, Statement of Profit and Loss, Cash Flow Statement, Statement of Changes in Equity and Notes to Financial Statements for the year ended 31 March 2018.
Financial Performance
The Companyâs financial performance, for the financial year ended 31 March 2018 on standalone and consolidated basis is summarized below:
(Rs. in lakhs)
Particulars |
As on 31 March 2018 |
As on 31 March 2017 |
||
Consolidated |
standalone |
Consolidated |
standalone |
|
Revenue from operations |
18,945.35 |
10,214.02 |
17,487.22 |
9,272.53 |
Other Income |
893.16 |
598.99 |
1,276.16 |
909.65 |
Total revenues |
19,838.51 |
10,813.01 |
18,763.38 |
10,182.18 |
Food and Beverages Consumed |
2,026.85 |
1,056.07 |
2,147.82 |
1,178.36 |
Employee Benefit Expenses |
4,668.43 |
2,115.67 |
4,434.46 |
1,937.65 |
Finance Costs |
1,469.42 |
524.11 |
1,546.83 |
605.81 |
Depreciation |
1,581.79 |
438.51 |
1,612.31 |
447.80 |
Other Expenses |
9,314.55 |
5,275.12 |
9,010.70 |
5,039.17 |
total expenses |
19,061.04 |
9,409.48 |
18,752.12 |
9,208.79 |
Profit before exceptional items, tax and minority interest |
777.47 |
1,403.53 |
11.26 |
973.39 |
Exceptional Item |
145.00 |
145.00 |
- |
- |
Profit before tax and minority interest |
922.47 |
1,548.53 |
11.26 |
973.39 |
Tax expense |
681.25 |
450.90 |
466.85 |
397.59 |
Profit/(Loss) for the year |
241.22 |
1,097.63 |
(455.59) |
575.80 |
Other comprehensive income/(loss), net of tax |
4.73 |
(0.06) |
1.62 |
(12.42) |
total comprehensive income/(loss) for the year |
245.95 |
1,097.57 |
(453.97) |
563.38 |
External Environment
The Indian economy grew by 7.2% year on year in the quarter ending December 2017 on good showing by key sectors like agriculture, construction and manufacturing, as against 6.3% year on year in the previous quarter. The growth in GDP during FY 2017-18 is estimated at 6.5% as compared to the growth rate of 7.1% in FY 2016-17.
Indiaâs annual inflation rate rose to a 3 month high of 4.58% in April 2018 from 4.28% in the previous month. Inflation rate in India averaged 6.60% from 2012 until 2018, reaching an all-time high of 12.17% in November 2013 and a record low of 1.54% in June 2017 mainly due to demonetization.
Revival in rural demand and increased infrastructure spending is likely to drive Indiaâs growth in current year, even as increasing debt and trade protectionism could pose a challenge. After a year of disruptions and growth slowdown due to Goods and Services Tax & demonetisation, Indian economy is consolidating the gains from the recent reforms. There is high optimism in domestic demand in the form of consumption and revival in small scale business activities, resulting in an increase in Foreign Direct Investment flows into the country. With an eye on infrastructure development, the Government has given green light to Rs. 7 trillion infrastructure program in late 2017, with the aim to pave more than 80,000 km of road by March 2022. In addition, Government continues to encourage the expansion of Digital India.
Indian Hospitality Industry
The Indian hospitality industry has been instrumental in contributing to the nationâs economic growth. The introduction of e-visa for foreign tourists and the increased domestic travel have helped in contributing to the same.
International travel and tourism arrivals increased by a remarkable 7% to reach a total of 13,220 lakhs in 2017 (January to December), 870 lakhs more than the calendar year 2016. (Source: UNWTO).
For India, Foreign Tourist Arrivals during 2017 were 10.18 million with a growth of 15.6% over the same period of the previous year. During 2016 Foreign Tourist Arrivals were 88 lakhs with a growth rate of 9.7% over 2015. (Source: Ministry of Tourism, Government of India)
The facility of e-visa has been enhanced and is now offered to citizens of 163 specified countries. In 2017, a total of 17 lakhs tourists availed the facility as compared to 10.79 lakhs in 2016, which represents a growth of 57%.
The growth in demand for rooms (5%) has been consistently outpacing the supply (3.2%) growth in India and this trend has been sustained over the recent past. This has resulted in an all India occupancy level of 65% across the industry. Except Chennai & Gurgaon, most key cities saw a healthy increase in demand. (Source: STR reports)
Key Financial and Operational Highlights
Standalone performance:
During the financial year 2017-18, the Company earned revenue from operations amounting to Rs. 10,214.02 lakhs as compared to Rs. 9,272.53 lakhs in the previous financial year, thus marking a growth of 10.15% over the previous financial year. Total revenues of the Company have increased by 7.62% over the previous financial year. The Company generated total comprehensive income of Rs. 1,097.57 lakhs during the year ended 31 March 2018 as compared to Rs. 563.38 lakhs in the previous financial year, thus registering a growth of 94.82% over the previous financial year.
Consolidated/ Group performance:
During the financial year 2017-18, the Group earned revenue from operations amounting to Rs. 18,945.35 lakhs as compared to Rs. 17,487.22 lakhs in the previous financial year, thus marking a growth of 8.34% over the previous financial year. Total revenues of the Group have increased by 6.50% over the previous financial year. The Group generated total comprehensive income of Rs. 245.95 lakhs during the year ended 31 March 2018 as compared to losses of Rs. 453.97 lakhs in the previous financial year, thus registering a growth of 154.18% over the previous financial year.
Key Business Developments during the year
The Company continues to expand through âasset light strategyâ and building the brand portfolio through Management Contracts and Franchise contracts in various parts of the country and abroad. Royal Orchid Group has presence in 34 cities in 11 states with 3,294 Rooms and 1.74 Lakh Royal reward members. Most of the hotels in the group are present in Metro cities. Royal Orchid Hotels Limited has demonstrated the scalability of keys by establishing its presence in Tier I & Tier II cities. Royal Orchid Hotels Limited will continue to bring Luxury rooms at lower rates across country.
During the financial year 2017-18, the Company opened ten hotels under the asset light model. The details of the hotels opened during the year are as follows:
Regenta Central Antarim, Ahmedabad
Located in the heart of the city on CG Road at Navrangpura, Hotel Regenta Central Antarim is at close proximity to major prestigious locations within the city like Kankaria Lake, Sardar Patel Stadium and Gandhi Ashram making it one of the best hotels in Ahmedabad.
- Artisan offers A la Carte and Buffet dining options to the guests.
- Hibachi is your one-stop destination for the authentic flavours of Oriental cuisine.
- Cake Walk is a 24*7 patisserie with a mini-library
- Teraso is one of the most sought after banquet halls in Ahmedabad, which is of 1680 sq.ft with a capacity of over 200 guests.
- Lincoln 1 is spread over an area of 560 sq with a capacity of 75 guests
- Lincoln 2 is spread over 315 sq. ft. and can hold a gathering of maximum 40 guests.
- Lincoln 3 is spread over area of 305 sq. ft. and is spacious enough to hold a gathering of 40 guests
- Oval Office is personalised corporate meetings, training sessions, presentations or any other business gathering for up to 12 guests.
Regenta Inn Embassy, Ajmer
Located very close to the railway station is one of the best destinations that you can choose as your home during your trip to Ajmer.
- Silver Leaf, our all-day dining multi-cuisine veg restaurant is known for serving a variety of Indian, Chinese and Continental delights.
- Status offers an array of cuisines from our global menu and embark on a gastronomical journey at our multi-cuisine veg restaurant
- Boardroom is equipped with all business-friendly amenities, our formal and well-furnished boardroom is ideal for any kind of corporate meetings and business get-togethers.
Regenta LP Vilas, Dehradun
Nestled among the lush green valley of Dehradun, is an ode to the bygone era of Rajput and Mughal dynasties, kept alive through aweinspiring architecture and decor.
- CoCo, our round the clock coffee lounge that will quickly fix any sweet or savory Indian or European delight
- Zaffran, offers the best multi-cuisine buffet/a-la-carte service in the city with menus ranging from authentic Indian, Continental, Chinese, exotic Thai and various other cuisines
- Un-Plugged, a bar which offers wide varieties of cocktails and drinks, along with lip-smacking snacks
- Mewar the richly decorated venue exuding heritage and art with its intricate detailing of Rajasthan ethos and style
- Rajputana, Mewar the richly decorated venue exuding heritage and art with its intricate detailing of Rajasthan ethos and style
- Vindhya, This versatile venue with an intimate pre-function area is an ideal place for hosting small social gatherings, birthday parties, classroom sessions and as a conference breakout room
- Royal Garden Lawn, with a sprawling area of over 40000 square feet and can serve nearly 2000 guests
- The Vatika, adjoining open-air area next to the Royal garden lawns is Vatika. The spacious place adjoining the forest can host more than 700 to 800 people.
- Shivalik, the opulent venue where heritage meets modernity has tastefully done interiors with traditional jalli work and can easily host 200 guests
- Aravali, an elegant venue with rich dark wood paneling and graceful wallpaper work is the ideal venue for a more intimate group or business and board meets.
- Courtyard, offers a magnificent view of the forest as a highlight, the courtyard with both indoor and outdoor setup offers a dazzling and cozy venue for an evening drinks party, reception or private social gatherings.
Regenta Central, Somnath
Nestled in the coastal city of Somnath, the abode of Lord Shiva and the divine land where Lord Krishna took his last breath. The hotel is located in close proximity to Somnath Railway Station and Veraval Railway Station.
Regenta Central Herald, Mysore
Regenta Central Herald is at a close distance from Mysore railway station and all the major attractions of Mysore such as Mysore Zoo, Mysore Palace.
- Pinxx - fine dining multi cuisine restaurant
- Seasons 1 is an ideal venue for hosting corporate meetings, MICE events, business gatherings, or any social or private functions
- Seasons 2, is spread across an area of 900 sq. ft. that can host up to 100 guests
Boardroom designed to accommodate a maximum of 20 guests. The room is well equipped with all the essential amenities needed for business meetings or interviews
Regenta Central Crystal , Kanpur
Located in the center of the bustling city as the latest icon of Kanpur.
- Red Olive, a multi-cuisine restaurant which offers a list of delicacies from the global menu
- 60 Degreeze , a multi-cuisine restaurant which offers an extravagant menu of Indian, Italian and Mughlai delicacies
- Bohemia, is spread across 1,260 sq. ft. hall can house 40 guests in a theatre like seating arrangement; ensures professionalism, perfection, and class that the business world demands
- Solitaire 24 Carat, is spread across 5,040 sq. ft. and can accommodate 60 pax in a cluster like arrangement
Regenta Inn Dwarika, Dwarka
An ideal place for all those who wish to spend a quiet and peaceful time in the enchanting kingdom of Lord Krishna.
- Prasad, multi-cuisine restaurant offers delectable foods with varied dining options that will excite your palate
- Coffee shop, for a variety of options for beverages for savor your tongue
- Shubham I, is spread over a large area of 1025 sq. ft. With a capacity of 100 guests
- Shubam II, can house 150 guests at a time signifies itself to be another state-of-the-art venue that helps in making your events a successful endeavor
Regenta Resort Fort, Pushkar
Magnificent heritage property due to its architecture and is one of the most sought-after destinations in Pushkar.
- Rajwada - the multi-cuisine restaurant boasts of a long list of Indian delicacies with tempting aromas
- Dining Hall, the traditional spirit of the Rajasthani culture has been kept alive in the dining hall with vibrant decorations and colour scheme, which give freedom to its guests to plan an event according to their priorities
Regenta Central, Indore
Located on the Mangliya bypass, is another establishment that adds to the charm of the lively city.
- Fountain Cafe, our A la carte multi-cuisine restaurant spread across 1,200 sq. ft.
- Bistro 76, an expresso bar is located in the ground floor and is spread across 2,200 sq. ft.
- Masala Craft, enjoy varied and sumptuous list of delicacies from the menu of this restaurant invites you to get on an unforgettable culinary journey
- Sunrise Lawn, it provides a picture-perfect setting for an occasion as big as your wedding or a beautiful dinner date
- NH-01 is spread across 3,768 sq. ft and can host 250 pax at the venue and best of services
- Crystal Hall is spread across 4,800 sq. ft. and can host about 350 to 400 pax thatâs best suited for parties, functions and even conferences
Regenta Resort soma Vine, Nashik
Situated 13 km away from Nashikâs key business areas and tourist spots.
- Suraahi, a multi-cuisine restaurant which boasts of an extensive A la carte menu with a wide selection of wine to choose from
- Suraahi, a multi-cuisine restaurant which boasts of an extensive A la carte menu with a wide selection of wine to choose from
- Amphitheatre, Situated in the picturesque vineyard, it provides the perfect setting for an occasion as big as the celebration of love or even an intimate dinner event
- White Room conference hall at The Regenta Resort Nashik is a state-of-the-art venue that helps make all your corporate events a success
Changes in nature of Business
During the year under review, there was no change in the nature of Companyâs business.
Share Capital of the Company and changes thereof
During the year under review the Company has granted 39,000 Stock Options to the employees of the Company under the Employee Stock Option Plan (ESOP) 2014.
During the financial year under review, the issued and paid-up share capital of the Company was increased to Rs. 2,730.12 lakhs divided into 2,73,01,188 equity shares of face value of Rs. 10 per share by issue and allotment of 67,223 equity shares on account of exercise of employee stock options.
Your Company has received a certificate from the Statutory Auditors of the Company that the scheme has been implemented in accordance with SEBI (Share Based Employee Benefits) Regulations, 2014. The certificate would be placed at the ensuing Annual General Meeting for inspection by Members of the Company.
During the financial year, 19,760 Equity Shares on which no unpaid dividend was claimed for a period of seven years were transferred to Investor Education and Protection Fund Authority, Ministry of Corporate Affairs.
Appropriations Dividend and Transfers to Reserve
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 15% i.e. Rs. 1.50 per share. The dividend on Equity Shares, if approved by the Members would involve a cash payout of Rs. 492.89 lakhs, including dividend distribution tax.
Further, during the year under review, no amount has been transferred to reserve.
Loans, Guarantees or Investments
Your Company is exempt from the provisions of Section 186 of the Companies Act, 2013 (âActâ) with regard to Loans and Guarantees. Details of Investments made are given in the Note No. 4 to the Financial Statements.
Public Deposits
In terms of the provisions of Sections 73 and 74 of the Companies Act, 2013 read with Companies (Acceptance of Deposits by Companies) Rules, 2014, the Company had no opening or closing balances and during the year under review, the Company has also not accepted any public deposits and as such, no amount of principal or interest was outstanding as on 31 March 2018.
Material Changes and commitments affecting financial position between the end of financial year and date of report
There have been no material changes and commitments, affecting the financial position of the Company which occurred between the end of the financial year to which the financial statements relate and the date of this report.
Revision in Financial statements or Boardsâ Report under section 131(1) of the Companies Act, 2013
In terms of Section 131 of the Companies Act, 2013, the Financial Statements and Boardâs Report are in compliance with the provisions of Section 129 or Section 134 of the Companies Act, 2013 and that no revision has been made during any of the three preceding financial years.
Management Discussion and Analysis Report
The Managementâs Discussion and Analysis Report on Companyâs performance - industry trends and other material changes with respect to the Company and its subsidiaries, wherever applicable, forms part of this Annual Report.
Subsidiaries, Associates and Joint Ventures
Pursuant to the Memorandum of Understanding entered into by the Company, the Articles of Association of jointly controlled entities namely Ksheer Sagar Developers Private Limited; J H Builders Private Limited; Ksheer Sagar Buildcon Private Limited & Raj Kamal Buildcon Private Limited have been altered on March 30, 2018 by inserting Board Composition clause, by virtue of which the Company has the right to appoint majority of the Directors in the Board of the aforesaid companies and hence these companies have become the subsidiary Company by virtue of Section 2 (87) of the Companies Act, 2013.
Pursuant to Section 129 (3) of the Companies Act, 2013, a statement containing salient features, brief financial details of the Companyâs subsidiaries for the financial year ended 31 March 2018 and their contribution to the consolidated financials in Form AOC - 1 is appended as Annexure - I to the Boardsâ Report and in consolidated financials forming part of this Report. The annual accounts of the Subsidiary Companies and the related information will be made available to any Member of the Company seeking such information and are available for inspection by any Member of the Company at the Registered Office of the Company.
Pursuant to Section 136 of the Companies Act, 2013, the financial statements of your Company, Consolidated Financial statements along with relevant documents and separate audited accounts in respect of subsidiaries are available on the website of your Company at the following link http://www.royalorchidhotels.com/investors.
The policy for determining material subsidiaries can be accessed on your Companyâs website under the link http://www.royalorchidhotels. com/Images/factsheet/Determining-Material-Subsidiary.pdf
Promoter Group
The names of the Promoters and entities comprising âgroupâ (and their shareholding) as defined under the Competition Act, 2002 for the purposes of Section 3(1)(e)(i) of SEBI (Substantial Acquisition of Shares and Takeover) Regulations, 2011 include the following:
S. No. |
Name of Promoter including Persons Acting in Concert |
Total Shareholding as on 31 March 2018 |
Percentage of Shareholding |
1. |
Mr. Chander K. Baljee |
1,20,01,060 |
43.96 |
2. |
Mrs. Sunita Baljee |
2,26,260 |
0.83 |
4. |
Mr. Keshav Baljee |
8,03,424 |
2.95 |
5. |
Mr. Sunil Sikka |
6,975 |
0.03 |
6. |
Baljees Hotels and Real Estates Private Limited |
57,14,689 |
20.97 |
7. |
Hotel Stay Longer Private Limited |
2,29,337 |
0.84 |
Particulars of Contracts or Arrangements made with Related Parties under section 188(1) and (2) of the Companies Act, 2013
In line with the requirements of the Act and the Listing Regulations, your Company has formulated a policy on dealing with Related Party Transactions (âRPTsâ) which can be accessed on the Companyâs website under the link: http://www.royalorchidhotels.com/Images/factsheet/ Policy-Related-party-transaction.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.
Prior omnibus approval is obtained for RPTs which are of a repetitive nature and entered in the Ordinary Course of Business and are at Armâs Length. A statement on RPTs specifying the details of the transactions, pursuant to each omnibus approval granted, has been placed on a quarterly basis for review by the Audit Committee.
The particulars of contracts/arrangements with related parties referred to in Section 188(1) and (2) of the Companies Act, 2013, are provided in the prescribed Form AOC-2, appended as Annexure - II to this Boardsâ Report.
Development in Human Resources and Industrial Relations
The Company continues to maintain a very cordial and healthy relationship with its workforce across all its units. The total number of persons working in the group (permanent employees on rolls and contractual employees) as at 31 March 2018 was 3,351 across all its units in the group.
The Company is ensuring the best place to work to attract and retain good employees in the Company. The Company continued to strive towards attracting, retaining, training, multiskilling employees. With the increase in workforce due to expansion in business, envisaging the requirement of adequate on the job training across the various levels of employees, a major thrust to the training and development of multiskilled certification programmes has been initiated through Presidency college of Hotel Management. Under Baljee Foundation the Company continues to offer financial support for medical and educational needs of certain category of employees. The Human Resource Team carried out the following programs across the group during the year:
1. Online Hospitality Training Program
2. Food Festivals to make staff experience cuisines of multiple types
3. Plantation drive as an environmental awareness initiative.
4. Blood donation camp and staff health checkup camps in collaboration with Rotary Club, Columbia Asia Hospital & Manipal Hospitals
5. Many Employees were recognized and rewarded with financial benefits under service bonus program. It helps in recognizing and rewarding key talent and resulting in quality talent retention.
The disclosure pursuant to Section 197 (12) of the Companies Act, 2013 read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, (as amended up to date) have been detailed in the Annexure - III to this Boardsâ Report.
Extract of Annual Return
The extract of Annual Return in Form MGT - 9, as provided under Section 92 (3) of the Companies Act, 2013, read with Rule 12 of the Companies (Management and Administration) Rules, 2014 is annexed hereto as Annexure - IV to this Boardâs Report.
Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and outgoes
Your Company is continuously striving towards conservation of energy across all its units and has implemented various Energy Conservation programs and latest technology up gradation measures, your Company also earned foreign currency in Financial Year 2017- 2018, complete details of which has been disclosed in Annexure - V to this Boardsâ Report.
Particulars of Loans/Guarantees/Investments
During the year under review the Company has given a Corporate Guarantee of Rs. 20 Crore to Tourism Finance Corporation of India Limited for term loan facility availed by Icon Hospitality Private Limited, a Subsidiary Company. The Company has not given any Inter Corporate loans during the financial year 2017-18, except for the wholly owned subsidiaries amounting to Rs. 171.27 lakhs, which were duly approved under the applicable provisions of the Companies Act, 2013. Particulars relating to Investments have been detailed in the Note No. 4 of the Financial Statements, forming part of this Annual Report.
Corporate Governance
Your Company has been practising the principles of good corporate governance. pursuant to Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (âLODRâ) a detailed report on corporate governance is available as a separate section in this Annual Report.
A certificate of the Company Secretary in whole-time practice regarding compliance with the conditions stipulated in the said clause and the LODR is provided separately as an Annexure - A to the Corporate Governance Report.
Board of Directors and changes thereof during Financial Year 2017-2018
As on 31 March 2018, your Board has following Directors:
s. No. |
Name |
DIN |
Category |
Designation |
|
1 |
Mr. Chander K. Baljee |
00081844 |
Executive |
Managing Director |
|
2 |
Mr. Sunil Sikka |
00083032 |
Non-Executive |
Non-Independent Director |
|
3 |
Mrs. Sunita Baljee |
00080737 |
Non-Executive |
Non-Independent Director |
|
4 |
Dr. Vivek Mansingh |
06903079 |
Non-Executive |
Independent Director |
|
5 |
Mr. Naveen Jain |
00051183 |
Non-Executive |
Independent Director |
|
6 |
Ms LilianJessie Paul |
02864506 |
Non-Executive |
Independent Director |
|
During the financial year 2017-18 the following changes took place in the Board:
1. Mr Vijay Rekhi tenure was completed on October 01, 2017
2. Mr. Naveen Jain was appointed as Independent Director for a period of 3 years w.e.f October 25, 2016 at the 31st Annual General Meeting of the Company held on September 27, 2017.
3. Ms Lilian Jessie Paul was appointed as Additional Director designated as Independent Director by the Board on 02 November 2017. She is now proposed to be appointed as an Independent Director for a period of three years. Her profile is given in the Annexure to the Notice calling the 32nd Annual General Meeting of the Company.
4. Mr. Sunil Sikka, Director of the Company, is retiring by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment, his brief profile is disclosed in the Annexure to Notice calling 32nd Annual General Meeting of the Company.
Details of Key Managerial Personnel
As on 31 March 2018 details of Key Managerial Personnel are as follows:
1. Mr. Chander .K. Baljee- Managing Director
2. Mr. Amit Jaiswal- Chief Financial Officer
3. Dr. Ranabir Sanyal- Company Secretary & Compliance Officer
There were no changes in KMP during the financial year.
Committees of the Board
As on March 31st 2018, your Board has following Statutory Committees:
a) Audit Committee
b) Nomination and Remuneration Committee
c) Stakeholders Relationship Committee
d) Corporate Social Responsibility Committee
The details of the composition, meetings held during the year and attendance of the meetings and the terms of reference of the above Committees of the Board are provided in the Corporate Governance Report.
Formal Annual Evaluation of Board
Pursuant to section 134 (3) (p) of the Companies Act, 2013 and Rule 8(4) of Companies (Accounts) Rules, 2014, it is mandatory to monitor and review the Board evaluation framework, the Board has carried out peer evaluation of all Board members, annual performance evaluation of its own performance, as well as the evaluation of the working of the Committees of Board as per the criteria laid down in the Nomination, Remuneration and Evaluation policy. The said policy including above said criteria for the evaluation of the Board, individual directors including independent directors and the committee of the board has been laid down in the Corporate Governance Report, which form part of this report.
Meetings of the Board held during the Year
During the year under review, your Board met 4 (Four) times on 29.05.2017; 10.08.2017; 02.11.2017 and 01.02.2018, all the Board Meetings were conducted in due compliance with Companies Act, 2013 and the Corporate Governance principles specified in the LODR.
Managerial Remuneration
During the year under review, the Ministry of Corporate Affairs vide their letter number: SRN/C54697651/5/2015 - CL.VII dated November, 3rd, 2015, has approved a total remuneration of Rs. 210.03 lakhs to Mr. Chander K. Baljee, Managing Director of the Company, for Financial Year 2017 - 2018, and your Company has not paid remuneration to him in excess of the limit specified above.
Declaration by Independent Directors
As on March 31st, 2018 your Company has following Independent Directors:
1. Dr. Vivek Mansingh
2. Mr. Naveen Jain
3. Ms Lilian Jessie Paul
In pursuance of Section 149(7) of the Companies Act, 2013, all the three Independent Directors of the Company have submitted, a declaration, under Section 149(6) of the Companies Act, 2013 and Regulation 16(1 )(b) of the LODR, that they meet the criteria of independence.
Familiarisation programme for Independent Directors
The Company has made a familiarisation programme for the Independent Directors, which has been disclosed on Companyâs website at www.royalorchidhotels.com/pdfs/familiarization-programmes.pdf.
Separate Meeting of Independent Directors and performance evaluation of Board by them
In due compliance with the provisions of Regulation 25(3) of the LODR, a separate meeting of Independent Directors was held in the previous calendar year 2017-18 , to inter-alia consider and discuss the performance of Non-Independent Directors and to assess the quality, quantity and timeliness of flow of information between the management and the listed entity and the Board in order to help Board to perform its duties.
Audit Committee and its Recommendation(s)
In accordance with Section 177 of the Companies Act, 2013, rules made there under and Regulation 18 of the LODR, the Company has duly constituted the Audit Committee, details of which has been disclosed in the Corporate Governance Report forming part of this Annual Report and all recommendations made by the Audit Committee were accepted by the Board.
Nomination and Remuneration Committee
In accordance with Section 178 of Companies Act, 2013 read with Rule 6 of Companies (Meetings of Board and its Powers) Rules, 2014 and Regulation 19 of LODR, the Company has constituted a Nomination and Remuneration Committee, details of which has been disclosed in the Corporate Governance Report forming part of this Annual Report and also on Companyâs website at www.royalorchidhotels.com/pdfs/ Composition-Various-committees.pdf, and your Company has also formulated Royal Orchid Nomination and Remuneration Policy, extracts of which are hereunder:
1) The Nomination and Remuneration Committee shall identify potential candidates who are qualified to become Directors and who may be appointed in senior management in accordance with the criteria laid down, recommend to the Board their appointment and removal.
2) The Nomination and Remuneration Committee shall formulate the criteria for determining qualifications, positive attributes and independence of a Director and recommend to the Board a policy, relating to the remuneration for the directors, key managerial personnel and other Employees.
3) The Nomination and Remuneration Committee shall, while formulating the policy ensure thatâ
a) the level and composition of remuneration is reasonable and sufficient to attract, retain and motivate Directors of the quality required to run the Company successfully;
b) relationship of remuneration to performance is clear and meets appropriate performance benchmarks; and
c) remuneration to Directors, key managerial personnel and senior management involves a balance between fixed and incentive pay reflecting short and long-term performance objectives appropriate to the working of the Company and its goals, provided that such policy shall be disclosed in the Boardâs Report.
4) Recommend nominees to various committees of the Board.
5) Approve and make recommendations to the Board of Directors in respect of Directorsâ fees, salary structure and actual compensation (inclusive of performance based incentives and benefits) of the Executive Directors, including the Managing Director;
6) Recommending remuneration for Non-Executive Directors.
7) Ensuring that appropriate procedures are in place to assess Boardâs effectiveness and shall carry out evaluation of every Directorâs performance.
8) Developing an annual evaluation process of the Board and its Committees.
9) Assist the Board of Directors in ensuring that affordable, fair and effective compensation philosophy and policies are implemented;
10) Review and approve the compensation and Employee Stock Option Plan (âESOPâ) to be granted to senior executives, requiring approval from the Board of Directors;
11) Review and approve the changes in terms and conditions of the ESOP;
12) Review and approve the overall budgetary increment proposals for annual increase of compensation and benefits for the Employees;
13) Criteria for selection and appointment of Non-Executive Directors; and
14) Review and approve any disclosures in the annual report or elsewhere in respect of compensation policies or Directorsâ compensation.
15) devising a policy on diversity of board of directors;
16) whether to extend or continue the term of appointment of the independent director, on the basis of the report of performance evaluation of independent directors.
The Policy for making payment to Non Executive Directors is available on the website of the Company at the following link. http://www. royalorchidhotels.com/Images/factsheet/Non-Executive-Directors. pdf
stakeholdersâ Relationship Committee
In terms of Section 178 of the Companies Act, 2013 read with Rule 6 of Companies (Meetings of Board and its Powers) Rules, 2014 and Regulation 20 of LODR the Company has constituted a Stakeholdersâ Relationship Committee (erstwhile Shareholdersâ Grievance Committee), details of which, along with terms of reference, has been disclosed in the Corporate Governance Report forming part of this Annual Report and also on Companyâs website at www.royalorchidhotels.com/pdfs/ Composition-Various-committees.pdf.
secretarial Auditor
Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014, the Board has appointed, Mr. G. Shanker Prasad (ACS 6357), Practicing Company Secretary (CoP No. 6450), to undertake the Secretarial Audit of the Company for Financial Year 2017 - 2018.
There were no qualifications by the Auditor in their Secretarial Audit Report in Form MR-3 for the Financial Year ended 31 March 2018 which is appended as Annexure - VI to this Boardsâ Report.
Corporate Social Responsibility
Your Company has always been committed to Corporate Social Responsibility (âCSRâ) and it is one of our commitments to the society. Our CSR activities are embedded around the vision of the Promoters of the Company. The CSR at Royal Orchid focuses on Environment, Sustainability, Hunger eradication imparting Education, enhancing Employability and Skill Development of budding entrepreneurs. The Presidency Educational Trust established Presidency College for Hotel Management to focus on the education in the field of hospitality and Tourism sector. The academy is a unique institution where students are exposed to hotel operations continuously as part of their academic curriculum. This is in addition to the mandatory industrial training. The details of the CSR activities of the Company are enclosed in Annexure - VII.
Your Company has signed a Memorandum of Understanding with National Skill Development Corporation (NSDC) a non-profit Company for a project called UDAAN, a Special Industry Initiative scheme for the State of Jammu and Kashmir with the aim to provide employment to the youths of J & K by imparting them industry specific skills.
The Company has collaborated with American Hotel and Lodging Educational Institute (AHLEI) through Presidency College and funds Operations Certification courses through Baljee Trust. Under Baljee Foundation, the Company continues to serve the well-being of the larger community in terms of assisting them to be self reliant by honing their skills Baljee Foundation continues to offer financial support for medical and educational needs of certain category of employees.
In accordance with Section 135 of Companies Act, 2013 read with Companies (Corporate Social Responsibility Policy) Rules, 2014, the Company has formulated a Corporate Social Responsibility Committee, details and composition of which has been disclosed in the Corporate Governance Report forming part of this report and also on Companyâs website at www.royalorchidhotels.com/pdfs/Composition-Various-committees.pdf and the Company has also adopted a Corporate Social Responsibility Policy (Royal Orchid Corporate Social Responsibility Policy) in this respect, extracts of which are available on the website of the Company at the following link http://www.royalorchidhotels.com/ investors.
Risk Management
The Company has established an effective Compliance Mechanism to mitigate the risk and will be reviewed by the Board periodically.
The Company has adopted Risk Management Policy, pursuant to the provision of Section 134 of the Act, to identify and evaluate business risks and approach for mitigation of such risks. The Company has identified various risks and also has mitigation plans for each risk identified and reviewed periodically.
Green Initiatives
The Company, in order to promote green initiative, has sent electronic copies of the Annual Report for Financial Year 2017 - 2018, along with the Notice of the 32nd Annual General Meeting, are sent to all members whose email addresses are registered with the Company / Registrar and Share Transfer Agent (âRTAâ). For members who have not registered their email addresses, physical copies of the Annual Report 2017-2018 under Section 101 of the Companies Act, 2013 are sent in the permitted mode. Members who have been sent Annual Report copies in electronic mode, desirous to have physical copies of the same can send a request, in writing, either to the Company or the RTA.
Insider Trading Regulations
Based on the requirements under SEBI (Prohibition of Insider Trading) Regulations, 2015 (erstwhile, SEBI (Prohibition of Insider Trading) Regulations, 1992), as amended till date, the Code of Conduct for prevention of Insider Trading and the Code of fair disclosure, as approved by the Board from time to time, are enforced by the Company.
The Company has adopted a Code of Conduct to regulate, monitor and report trading by insiders under the SEBI (Prohibition of Insider Trading) Regulations, 2015. This Code of Conduct also includes code for practices and procedures for fair disclosure of unpublished price sensitive information and this is made available on the Companyâs website http://www.royalorchidhotels.com/investors.
The objective of this Code is to protect the interest of Stakeholders at large, to prevent misuse of any price sensitive information and to prevent any insider trading activity by dealing in shares of the Company by its Directors, Officers and Designated Employees. The Company also adopts the concept of Closure of Trading Window, to prevent its Directors, Officers, Designated Employees and other employees from trading in the securities of the Company at the time when there is unpublished price sensitive information.
Statutory Auditors
Deloitte Haskins & Sells LLP, Chartered Accountants (Firm Registration No. 117366W/W-100018), were appointed as Statutory Auditors of your Company to hold office from the conclusion of the 29 AGM held in the year 2015, until the conclusion of the 34th AGM to be held in the year 2020. The requirement to place the matter relating to appointment of Auditors for ratification by members at every Annual General Meeting is done away with vide Notification dated May 7, 2018 issued by the Ministry of Corporate Affairs, New Delhi. Accordingly, no resolution is proposed for ratification of appointment of Auditors, who are appointed in the Annual General Meeting held on September 29, 2015.
Explanations or Comments by the Board on every qualification, reservation or adverse remark or disclaimer made by the statutory and secretarial Auditors
There were no qualifications or adverse remark by either of the Auditors in their respective Reports.
Litigation
1. The Company has been named as a defendant in two civil suits on small portion of land taken on lease from the Karnataka State Tourism Development Corporation (âKSTDCâ) for the operation of the Hotel Royal Orchid, Bangalore, which are adjacent to the hotel premises. One of the civil suit has been settled in favour of the Company, against which an appeal before the High Court of Karnataka, is pending and in the other matter the Company has an injunction against the other party. Management believes that these cases are not material and will not adversely affect its operations.
2. The Company has been named as a defendant in a suit filed in mid 2008 by Kamat Hotels (India) Limited (âthe plaintiffâ or âKamat Hotelsâ) with Bombay High Court restraining the alleged use of the trademark of the Company and a relief of a permanent injuction restraining the Company from using the trademark âOrchid. The Company had filed an application seeking an interim injuction while the above proceedings are pending. The Bombay High Court vide its interim order dated 05 April 2011, has allowed the Company to continue to operate its current hotels as on that date but has restrained the Company from opening new hotels under the said brand. However, the Division bench of the Bombay High Court vide its order dated 06 May 2011 has partially stayed operation of the said Order and allowed opening of one of Companyâs proposed hotels in Vadodara under the âRoyal Orchidâ brand.
During the year ended 31 March 2014, the Company has obtained two favourable rulings from the Intellectual Property Appellate Board (âIPABâ). Kamat Hotels had preferred to appeal the ruling of IPAB in Madras High Court. The Madras High Court has passed orders cancelling the registration in Class 42 of Trademarks Act and the Company has filed a Special Leave Petition âSLPâ with the Honorable Supreme Court in 2015. Reply to SLP was filed by Kamat Hotels in the form of Counter affidavit and the Company has filed a Rejoinder in the form of an affidavit. The matter was partly heard by the Honorable Supreme Court in April and May of 2017 and has advised Kamat Hotels to consider the options for settlement by displaying the disclaimers on the Websites regarding the disassociation between the two brands. On 13 February 2018, the Supreme Court dismissed the SLP filed by the Company and consequently, the Company has filed a Chamber Appeal against the said Order which is pending for listing. However, the management believes that the outcome of SLP affects only the registration of the trademarks in Class 42 and does not in any way affect the use of marks by the Company.
The management believes that the case will be settled in its favour and will not affect its current and future operations.
3. During the prior years, a Subsidiary Company had received an Order from Office of the Commissioner of Customs (Export) imposing differential duties and penalties amounting to Rs. 323.36 lakhs plus applicable interests for certain alleged violations of the Export Promotion Capital Goods Scheme. The Subsidiary Company has filed an appeal before the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Mumbai and an unconditional stay in the matter is granted till the disposal of the appeal. Based on a detailed evaluation and independent advise obtained, the management believes that the case will be settled in its favour. Accordingly, these financial statements do not include adjustments, if any, on the above account.
4. The Company received tax demand including interest, from the Indian tax authorities for payment of Rs. 449 lakhs (31 March 2017: Rs. 426.20 lakhs; 01 April 2016: Rs. 449 lakhs) arising on denial of certain expenditure, upon completion of tax assessment for the fiscal years 2009, 2011 and 2012. The Companyâs appeal against the said demands were disposed off by the appellate authorities in favour of the Company for fiscal year 2012 and allowed partial benefit in favour of the Company for fiscal years 2009 and 2011. Currently, the matter for these fiscal years are before the Income Tax Appellate Tribunal for hearing.
The Company is contesting the above demands and the management believes that it is more-like-than-not that the advance tax receivables (net of provision) recorded in the financial statements towards the tax demands is recoverable. Considering the facts and nature of disallowances, the Company believes that the final outcome of the disputes should be in favour of the Company and will not have any material adverse effect on the financial position and results of operations.
Details of significant and material orders passed by the regulators/ courts/ tribunals impacting the going concern status and the Companyâs operations in future
There were no significant material orders passed by the Regulators/ Courts which would impact the going concern status of the Company and its future operations.
Internal Financial Control systems
The Company has adequate system of internal controls, which ensures that all the transactions are authorised, recorded and reported correctly and assets are safeguarded and protected against loss from unauthorized use or disposition.
The Company has appointed an Internal Auditor Mr. Asokka Gandhi who along with his team conducts the Internal Audit of the Company and reports directly to the Audit committee.
The Company also has an Audit Committee comprising of 3 (Three) professionally qualified Independent Directors, who interact with the Statutory Auditors, Internal Auditors and Management in dealing with matters within its terms of reference. This Committee mainly deals with accounting matters, financial reporting and internal controls.
Vigil Mechanism and Whistle Blower Policy
The Board of Directors of your Company has adopted the Vigil Mechanism and Whistle Blower Policy in compliance with Section 177(9) and (10) of the Companies Act, 2013, and regulations specified under LODR.
The Company has adopted a channel for receiving and redressing of employeesâ complaints. Under this policy, we encourage our employees to report any reporting of fraudulent financial or other information to the stakeholders, any conduct that results in violation of the Companyâs Code of Business Conduct. Likewise, under this policy, we have prohibited discrimination, retaliation or harassment of any kind against any employees who, based on the employeeâs reasonable belief that such conduct or practice have occurred or are occurring. No individual in the Company has been denied access to the Audit Committee or its Chairman.
The Whistle Blower policy can be accessed on your Companyâs website at the link: http://www.royalorchidhotels.com/Images/factsheet/ Whistle-Blower-Policy.pdf
The Audit Committee periodically reviews the functioning of this mechanism. This meets the requirement under the said provisions above.
Directorsâ Responsibility statement
Your Companyâs Directors make the following statement in terms of Section 134(5) of the Companies Act, 2013, which is to the best of their knowledge and belief and according to the information and explanations obtained by them:
1) in the preparation of the Annual Accounts for the year ended 31 March 2018, the applicable accounting standards read with requirements set out under Schedule III to the Act, have been followed and there are no material departures from the same;
2) the Directors 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 as at 31 March 2018 and of the profit of the Company for the year ended on that date;
3) the Directors 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;
4) the Directors have prepared the annual accounts on âa going concern basisâ;
5) the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and
6) the Directors have devised proper system to ensure compliances with the provisions of all applicable laws and that such systems are adequate and operating effectively.
Compliance with secretarial standards on Board Meetings and General Meetings
The Company has complied with Secretarial Standards issued by the Institute of Company Secretaries of India on Board Meetings and General Meetings.
Payment of Listing Fee and Custodial Fee
Your Company has paid the both, Annual Listing Fee and Annual Custodial Fee for the Financial Year 2017 - 2018, to the National Stock Exchange (âNSEâ) and the Bombay Stock Exchange (âBSEâ) and to National Securities and Depositories Limited (NSDL) and Central Depository Services (India) Limited (CDSL) respectively.
Commission or Remuneration received from Holding or subsidiary Companies
During the year under review, no Commission or Remuneration was paid to the Executive Directors from Holding/Subsidiary Companies.
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 in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules there under, your Board of Directors has approved and adopted a âPolicy on Prevention of Sexual Harassment at Workplaceâ to provide equal employment opportunity and is committed to provide a work environment that ensures every woman employee is treated with dignity and respect and afforded equitable treatment.
During the year under review the Company has not received any complaints on sexual harassment. The Company has complied with the Information required under Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013.
Dematerialisation
The Companyâs shares are available for dematerialization with both the Depositories viz., NSDL and CDSL. About 99.88% of the paid-up equity share capital of the Company has been dematerialized as on 31 March 2018.
Disclosure of Frauds in the Boardsâ Report under section 143 of the Companies Act, 2013
During the year under review, your Directors do not observe any contract, arrangement and transaction which could result in a fraud; your Directors hereby take responsibility to ensure you that the Company has not been encountered with any fraud or fraudulent activity during the Financial Year 2017 - 2018. other Disclosures
1) During the year under review, the Company has not bought its own shares nor has given any loans to its employees (including Key Managerial Personnel) of the Company for purchase of the Company shares.
2) Your Company provides e-voting facility, to all its members to enable them to cast their votes electronically on all resolutions set forth in the Notice. This is pursuant to the Section 108 of the Companies Act, 2013 and Rule 20 of the Companies (Management and Administration) Amendment Rules, 2015.
Acknowledgments
Your Directors place on record, their deep sense of appreciation to all Employees, support staff, for adopting to the values of the Company, viz., collaborative spirit, unrelenting dedication and expert thinking, to be an expertise led organization and the Companyâs Customers for letting us deliver the Companyâs Mission statement, to help the businesses and societies flourish.
The Board also immensely thank all the Shareholders, Investors, Vendors, Service Providers, Bankers and all other Stakeholders for their continued and consistent support to the Company during the year.
Your Directors would like to make a special mention of the support extended by the various Banks, Departments of Government of India, the State Governments, the Tax Authorities, the Ministry of Commerce, Ministry of Tourism, Government of India, Karnataka State Tourism Development Corporation (KSTDC), Ministry of Corporate Affairs, Ministry of Finance, SEBI, NSE and BSE and others and look forward to their continued support in all future endeavours.
For and on behalf of the Board of Directors of
Royal orchid Hotels Limited
Chander K. Baljee sunita Baljee
Place : Bengaluru Managing Director Director
Date : July 27, 2018 (DIN: 00081844) (DIN:00080737)
Mar 31, 2016
Boards'' Report
Dear Members,
The Board of Directors of your Company, with immense pleasure, present the Thirtieth Annual Report of your Company along with the Audited Balance Sheet, Profit and Loss Account and Cash Flow Statement (Standalone and Consolidated), Schedules and Notes to Accounts for the year ended March 31, 2016.
Financial Performance
The Company''s financial performance, for the financial year ended March 31, 2016 on standalone and consolidated basis is summarized below:
(Rs. in crores)
Financial Particulars |
As on March 31, 2016 |
As on March 31, 2015 |
||
Consolidated |
standalone |
Consolidated |
standalone |
|
Revenue from operations |
158.54 |
87.85 |
147.75 |
84.62 |
Other Income |
4.36 |
5.61 |
3.30 |
8.64 |
Total revenues |
162.90 |
93.46 |
151.05 |
93.27 |
Employee Benefit Expense |
36.77 |
18.34 |
35.25 |
19.67 |
Finance Costs |
14.92 |
6.11 |
15.57 |
6.32 |
Depreciation |
13.90 |
3.99 |
14.61 |
4.39 |
Other Expenses |
101.43 |
58.84 |
93.41 |
55.91 |
total Expenses |
167.02 |
87.28 |
158.84 |
86.30 |
(Loss)/Profit before exceptional items, tax and minority interest |
(4.12) |
6.16 |
(7.79) |
6.97 |
Exceptional Item |
1.32 |
1.32 |
2.00 |
2.00 |
(Loss)/Profit before tax and minority interest |
(2.80) |
7.48 |
(5.79) |
8.97 |
Tax expense/(credit) |
0.84 |
- |
0.99 |
- |
Minority Interest |
(2.34) |
- |
(2.92) |
- |
(Loss)/Profit for the year |
(1.30) |
7.48 |
(3.86) |
8.97 |
* The figures were regrouped for the purposes of accounting in respect of March 31, 2016.
Key Financial and Operational Highlights
The total income of the Group for the year ended March 31, 2016 was Rs.162.90 crores registering a growth of 8% over the previous year.
The Revenue from Standalone operations during the year
2015 - 2016 is Rs.87.85 crores as compared to Rs.84.62 crores during the year 2014 - 2015. The Company, on a standalone basis, has earned a profit of Rs.7.48 crores during the year 2015 - 2016 as against Rs.8.97 crores during the year 2014 - 2015.
India has emerged as the fastest growing major economy in the world as per the Central Statistics Organization (CSO) and International Monetary Fund (IMF). According to the Economic Survey 2015-16 conducted by IBEF, the Indian economy will continue to grow more than 7 per cent in 2016-17. The inflation during the year has moderated from 5.2% to 4.8%. Over 7.1 million foreign tourists arrived in 2015.
The Hospitality Industry has grown at a tremendous pace over the years and has emerged as one of the key drivers of growth of the services sector in India. The industry is seeing a cumulative annual growth rate of 11.7% every year and is expected to grow further.
Online booking facilities, social media advertisements and digital operations and IT enabled interactions with the customers have contributed significantly to improve hospitality industry.
However, lack of adequate infrastructure, inadequate talent pool and high attrition rates are still some of the teething problems in the hospitality industry.
Royal Orchid Hotels Limited continues to pursue asset light strategy wherein focusing on adding new Hotels under its Management Wing. The Company aims to cover all major cities in India.
During the year under review the Company has renovated its main Hotels and foresees a promising year ahead with the renovated properties getting ready for business and addition of more rooms and services in some of the properties.
Key Business Developments during the year
Royal Orchid Hotels group currently operates 36 hotels in 25 popular destinations. Royal Orchid Hotels primarily operates 5 and 4 star hotels, enabling it to target the discerning business and leisure traveller.
The brand ''Regenta'' is another business-centric brand under the house of the Royal Orchid Hotels group. It is designed for the corporate traveller whose watchword is value and convenience. Currently they are 15 hotels under this brand.
With Sales Offices at 11 locations across India like Bengaluru, Delhi, Mumbai, Chennai, Jaipur, Goa, Pune, Mysuru, Ahmedabad, Kolkata, and Hyderabad, your Company is penetrating deep into the market for a better market share and following an aggressive feet-on-the-street approach to meet all potential clients in the corporate sector and travel agents parallelly.
New Hotels opened during the year
1. Regenta Resort Vanya Mahal, Ranthambore, Rajasthan
Regenta Resort Vanya Mahal, Ranthambore is a perfect blend of old world charm and contemporary elegance with its great Rajasthani architecture that preserves the age old traditions combined with high-end amenities for those seeking tranquility and re-live the grandeur of the Maharajas. The newly built resort offers 70 elegant guestrooms with the highest levels of comfort and the largest banqueting facilities in town. Regenta Resort Vanya Mahal, Ranthambore is an ideal destination for special occasions like Weddings, Conferences & Events where its architecture complements the beauty of the event.
2. Regenta Camellia Resort and spa, santiniketan, West Bengal
Regenta Camellia Resort & Spa, Santiniketan is a perfect blend of comfort and luxury, which is evident from its exquisite interiors, beautiful architecture and high-end amenities. Our lavish resort is known for the personalized attention that we offer to our guests. Its central location, dining, banqueting facilities and other recreational facilities make it an ideal stopover for any tourist in the town.
3. Regenta Inn, Bengaluru
Regenta Inn offers quality accommodation and facilities to meet all the requirements of a modern day traveler. The hotel is just a 5 minutes drive from airport. Its strategic location, high-end amenities and its impeccable service standards makes it the ideal stopover for any traveler in Bengaluru. With 40 well-appointed rooms and a multi-cuisine dining outlet, one''s stay in the city is bound to be a convenient one.
4. Regenta Resort Central, Dandeli
Regenta Resort Century, Dandeli offers 17 premium cottages with in-room dining services and many fun activities in the vicinty. It is the perfect destination for any nature lover to explore the frontiers at the Dandeli wildlife sanctuary, adventure trills and bird watching treks.
5. Regenta Almeida, Zirakpur, Chandigarh
Hotel Regenta Almeida is strategically located in the heart of the city which is why it is easily accessible from all major places of interest. With multiple dining options, a full service spa, a roof-top swimming pool, fitness center, in-room dining facilities, and banquet venues.
6. Regenta orkos, Kolkata
Kolkata, the ''City Of Joy'' welcomes many travelers each year for business and leisure purposes and the hotel is a much sought after destination in the city. The strategic location, dining options, a roof top pool, a fitness centre and banqueting facilities is the preferred choice for all occasions.
The other particulars of some of the key business developments which took place during the financial year 2015-16 have also been detailed out under the sections: Management Discussion & Analysis and Highlights 2015-2016 of this Annual Report.
Changes in nature of Business
During the year under review, there was no change in the nature of Company''s business.
share Capital of the Company and changes thereof
During the year under review the Company has neither issued shares nor granted stock options/sweat equity.
Dividend and Transfers to Reserve
The Company has entered a new phase of growth and is now undertaking the various expansions and renovation plans. To conserve resources and to fund new projects, the Board has not recommended for any Dividend for the fiscal year 2015-2016.
Further, during the year under review, no amount has been transferred to reserve.
Public Deposits
In terms of the provisions of Sections 73 and 74 of the Companies Act, 2013 read with Companies (Acceptance of Deposits by Companies) Rules, 2014, the Company had no opening or closing balances and during the year under review, the Company has also not accepted any public deposits and as such, no amount of principal or interest was outstanding as on March 31, 2016.
Material Changes and commitments affecting financial position between the end of financial year and date of report
There have been no material changes and commitments, affecting the financial position of the Company which occurred between the end of the financial year to which the financial statements relate and the date of this report.
Revision in Financial statements or Boards'' Report under section 131(1) of the Companies Act, 2013
In terms of Section 131 of the Companies Act, 2013, the Financial Statements and Board''s Report are in compliance with the provisions of Section 129 or Section 134 of the Companies Act, 2013 and that no revision has been made during any of the three preceding financial years.
Management Discussion and Analysis Report
The Management''s Discussion and Analysis Report on Company''s performance - industry trends and other material changes with respect to the Company and its subsidiaries, wherever applicable, forms part of this Annual Report.
subsidiaries, Associates and Joint Ventures
The Consolidated Financial Statements of your Company and its Subsidiaries, Joint Ventures and Associates, prepared in accordance with the relevant Accounting Standards of the Institute of Chartered Accountants of India, duly audited by the Statutory Auditors, form a part of the Annual Report and are reflected in the Consolidated Accounts.
As at March 31, 2016, your Company has 13 Indian subsidiaries, 1 Foreign Subsidiary and 4 Joint Venture companies.
Pursuant to Section 129 (3) of the Companies Act, 2013, a statement containing salient features, brief financial details of the Company''s subsidiaries for the financial year ended March 31, 2016 and their contribution to the consolidated financials in Form AOC - 1 is appended as Annexure - I to the Boards'' Report and in consolidated financials forming part of this Report. The annual accounts of the Subsidiary Companies and the related information will be made available to any Member of the Company seeking such information and are available for inspection by any Member of the Company at the Registered Office of the Company.
Pursuant to Section 136 of the Companies Act, 2013, the financial statements of your Company, Consolidated Financial statements along with relevant documents and separate audited accounts in respect of subsidiaries are available on the website of your Company.
Promoter Group
The names of the Promoters and entities comprising "group" (and their shareholding) as defined under the Competition Act, 2002 for the purposes of Section 3(1)(e)(i) of SEBI (Substantial Acquisition of Shares and Takeover) Regulations, 2011 include the following:
sl. Name of Promoter including No. Persons Acting in Concert |
Total shareholding as on March 31, 2016 |
Percentage of shareholding |
|
1. |
Mr. Chander K Baljee |
1,20,14,560 |
44.12 |
2. |
Mrs. Sunita Baljee |
2,26,260 |
0.83 |
3. |
Mr. Arjun Baljee |
3,01,593 |
1.11 |
4. |
Mr. Keshav Baljee |
8,03,424 |
2.95 |
5. |
Mr. Sunil Sikka |
15,296 |
0.06 |
6. |
Baljees Hotels and Real Estates Private Limited |
57,14,689 |
20.98 |
7. |
Hotel Stay Longer Private Limited |
2,29,337 |
0.84 |
Particulars of Contracts or Arrangements made with Related Parties under section 188(1) and (2) of the Companies Act, 2013
The particulars of contracts/arrangements with related parties referred to in Section 188(1) and (2) of the Companies Act, 2013, are provided in the prescribed Form AOC-2, appended as Annexure - II to this Boards'' Report.
Development in Human Resources and Industrial Relations
The Company continues to maintain a very cordial and healthy relationship with its work force across all its units. Your Company participated in "Great Place to Work" Employee Satisfaction survey during 2015 and achieved 79 percentile Index scores; it was conducted by "The Economic Times".
The disclosure pursuant to Section 197 (12) of the Companies Act, 2013 read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, (as amended up to date) have been detailed in the Annexure - III to this Boards'' Report.
Extract of Annual Return
The extract of Annual Return in Form MGT - 9, as provided under Section 92 (3) of the Companies Act, 2013, read with Rule 12 of the Companies (Management and Administration) Rules, 2014 is annexed hereto as Annexure - IV to this Board''s Report.
Conservation of Energy, Technology Absorption, Foreign Exchange earnings and outgoes
Your Company is continuously striving towards conservation of energy across all its units and has implemented various Energy Conservation programs and latest technology up gradation measures, your Company also earned foreign currency in Financial Year 2015 - 2016, complete details of which has been disclosed in Annexure - V to this Boards'' Report.
Particulars of Loans/Guarantees/Investments
Particulars relating to Inter-Corporate Loans, Investments and Corporate Guarantee have been detailed in the Notes to Financial Statements, forming part of this Annual Report.
Corporate Governance
Your Company has been practicing the principles of good corporate governance. Pursuant to Clause 49 of the Listing Agreements with the Stock Exchanges (effective till November 30th, 2015) and Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("LODR") (applicable from December 1st, 2015), a detailed report on corporate governance is available as a separate section in this Annual Report.
A certificate of the Company Secretary in whole-time practice regarding compliance with the conditions stipulated in the said clause and the LODR is provided separately as an Annexure - A to the Corporate Governance Report.
Board of Directors and changes thereof during Financial Year 2015-2016
As on March 31, 2016, your Board has following Directors:
sl. No. |
Name |
DIN |
Category |
Designation |
1. |
Mr. C. K. Baljee |
00081844 |
Executive |
Managing Director |
2. |
Mr. Sunil Sikka |
00083032 |
Non-Executive |
Non - Independent Director |
3. |
Ms. Sunita Baljee 00080737 Non-Executive Non - Independent Director |
|||
4. |
Mr. R. V. S. Rao |
00061599 Non-Executive Independent Director |
||
5. |
Mr. Vijay K. Rekhi |
00191298 Non-Executive Independent Director |
||
6. |
Mr. K. Jairaj |
01875126 |
Non-Executive |
Independent Director |
1. Dr. Vivek Mansingh (DIN: 06903079), who was appointed as Additional Director on the Board on 12.08.2016, is now proposed to be appointed as Independent Director for a term of 5 (Five) Years, in the ensuing Annual General Meeting, his brief profile is disclosed in the Annexure to Notice calling 30th Annual General Meeting of the Company.
2. Mr. Vijay K. Rekhi (DIN: 00191298), Non-Executive Independent Director of the Company is proposed to be reappointed for a second term of 1 (One) Year, in the ensuing Annual General Meeting, his brief profile is disclosed in the Annexure to Notice calling 30th Annual General Meeting of the Company.
3. Mr. Sunil Sikka (DIN: 00083032), who was holding the position of Whole Time Director in the Company, has resigned from the office of Whole Time Director w.e.f. 07.08.2015 and remained on the Board of Company in the capacity of Director.
4. Mr. Sunil Sikka (DIN: 00083032), Director of the Company, is retiring by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment, his brief profile is disclosed in the Annexure to Notice calling 30th Annual General Meeting of the Company.
Following are the details of Key Managerial Personnel (KMP) who were appointed or have resigned or whose designation has been changed during the Year 2015 - 2016.
Sl. No. |
Name of the KMP |
Designation |
Date of Appointment |
Date of Change in designation |
Date of Resignation |
1. |
Ms. Payal Sharma |
Company Secretary |
29.05.2014 |
- |
07.08.2015 |
2. |
Mr. Sudhir Anand |
Company Secretary |
07.08.2015 |
- |
26.12.2015 |
Committees of the Board
As on March 31st 2016, your Board has following Committees:
a) Audit Committee
b) Nomination and Remuneration Committee
c) Stakeholders Relationship Committee
d) Corporate Social Responsibility Committee
The details of the composition, meetings held during the year and attendance of the meetings and the terms of reference of the above Committees of the Board are provided in the Corporate Governance Report.
Formal Annual Evaluation of Board
Pursuant to section 134 (3) (p) of the Companies Act, 2013 and Rule 8(4) of Companies (Accounts) Rules, 2014, it is mandatory to monitor and review the Board evaluation framework, the Board has carried out peer evaluation of all Board members, annual performance evaluation of its own performance, as well as the evaluation of the working of the Committees of Board as per the criteria laid down in the Nomination, Remuneration and Evaluation policy. The said policy including above said criteria for the evaluation of the Board, individual directors including independent directors and the committee of the board has been laid down in the Corporate Governance Report, which form part of this report.
Meetings of the Board held during the Year
During the year under review, your Board met 4 (Four) times on 30.05.2015, 07.08.2015, 04.11.2015 and 28.01.2016, all the Board Meetings were conducted in due compliance with Companies Act, 2013 and the Corporate Governance principles specified in the LODR.
Managerial Remuneration
During the year under review, the Ministry of Corporate Affairs vide their letter number: SRN/C54697651/5/2015 - CL.VII dated November, 3rd, 2015, has approved a total remuneration of ''1.58 Crores to Mr. C. K. Baljee (DIN: 00081844), Managing Director of the Company, for Financial Year 2015 - 2016, and your Company has not paid remuneration to the him in excess of the limit specified above.
Declaration by Independent Directors
As on March 31st, 2016, your Company has following Independent Directors:
1. Mr. R. V. S. Rao (DIN: 00061599).
2. Mr. Vijay Rekhi (DIN: 00191298).
3. Mr. K. Jairaj (DIN: 01875126).
In pursuance of Section 149(7) of the Companies Act, 2013, all the three Independent Directors of the Company have submitted, a declaration, under Section 149(6) of the Companies Act, 2013 and Regulation 16(1)(b) of the LODR, that they meet the criteria of independence.
Familiarization programme for Independent Directors
The Company has made a familiarization programme for the Independent Directors, which has been disclosed on Company''s website at www.royalorchidhotels.com/pdfs/familiarization-programmes.pdf.
separate Meeting of Independent Directors and performance evaluation of Board by them
In due compliance with the provisions of Regulation 25(3) of the LODR, a separate meeting of Independent Directors was held 28.01.2016, to inter-alia consider and discuss the performance of Non-Independent Directors, the Chairman and to assess the quality, quantity and timeliness of flow of information between the management and the listed entity and the Board in order to help Board to perform its duties.
Audit Committee and its Recommendation(s)
In accordance with Section 177 of the Companies Act, 2013, rules made there under and Regulation 18 of the LODR, the Company has duly constituted the Audit Committee, details of which has been disclosed in the Corporate Governance Report forming part of this Annual Report and all recommendations made by the Audit Committee were accepted by the Board.
Nomination and Remuneration Committee
In accordance with Section 178 of Companies Act, 2013 read with Rule 6 of Companies (Meetings of Board and its Powers) Rules, 2014 and Regulation 19 of LODR, the Company has constituted a Nomination and Remuneration Committee, details of which has been disclosed in the Corporate Governance Report forming part of this Annual Report and also on Company''s website at www. royalorchidhotels.com/pdfs/Composition-Various-committees. pdf, and your Company has also formulated Royal Orchid Nomination and Remuneration Policy, extracts of which are hereunder:
1) The Nomination and Remuneration Committee shall identify potential candidates who are qualified to become Directors and who may be appointed in senior management in accordance with the criteria laid down, recommend to the Board their appointment and removal.
2) The Nomination and Remuneration Committee shall formulate the criteria for determining qualifications, positive attributes and independence of a Director and recommend to the Board a policy, relating to the remuneration for the directors, key managerial personnel and other Employees.
3) The Nomination and Remuneration Committee shall, while formulating the policy ensure that-
a) the level and composition of remuneration is reasonable and sufficient to attract, retain and motivate Directors of the quality required to run the Company successfully;
b) relationship of remuneration to performance is clear and meets appropriate performance benchmarks; and
c) remuneration to Directors, key managerial personnel and senior management involves a balance between fixed and incentive pay reflecting short and long-term performance objectives appropriate to the working of the Company and its goals, provided that such policy shall be disclosed in the Board''s Report.
4) Recommend nominees to various committees of the Board.
5) Approve and make recommendations to the Board of Directors in respect of Directors'' fees, salary structure and actual compensation (inclusive of performance based incentives and benefits) of the Executive Directors, including the Managing Director;
6) Recommending remuneration for Non-Executive Directors.
7) Ensuring that appropriate procedures are in place to assess Board''s effectiveness and shall carry out evaluation of every Director''s performance.
8) Developing an annual evaluation process of the Board and its Committees.
9) Assist the Board of Directors in ensuring that affordable, fair and effective compensation philosophy and policies are implemented;
10) Review and approve the compensation and Employee Stock Option Plan ("ESOP") to be granted to senior executives, requiring approval from the Board of Directors;
11) Review and approve the changes in terms and conditions of the ESOP;
12) Review and approve the overall budgetary increment proposals for annual increase of compensation and benefits for the Employees;
13) Criteria for selection and appointment of Non-Executive Directors; and
14) Review and approve any disclosures in the annual report or elsewhere in respect of compensation policies or Directors'' compensation.
15) devising a policy on diversity of board of directors;
16) whether to extend or continue the term of appointment of the independent director, on the basis of the report of performance evaluation of independent directors.
stakeholders'' Relationship Committee
In terms of Section 178 of the Companies Act, 2013 read with Rule 6 of Companies (Meetings of Board and its Powers) Rules, 2014 and Regulation 20 of LODR the Company has constituted a Stakeholders'' Relationship Committee (erstwhile Shareholders'' Grievance Committee), details of which, along with terms of reference, has been disclosed in the Corporate Governance Report forming part of this Annual Report and also on Company''s website at www.royalorchidhotels.com/pdfs/Composition-Various-committees.pdf.
Corporate social Responsibility
Your Company has always been committed to Corporate Social Responsibility ("CSR") and it is one of our commitments to the society. Our CSR activities are embedded around the vision of the Promoters of the Company. The CSR at Royal Orchid focuses on imparting Education, enhancing Employability and Skill Development of budding entrepreneurs in association with the Presidency Educational Trust. The Trust established Presidency College for Hotel Management to focus on the education in the field of hospitality and Tourism sector. The academy is a unique institution where students are exposed to hotel operations continuously as part of their academic curriculum. This is in addition to the mandatory industrial training.
Your Company has signed a Memorandum of Understanding with National Skill Development Corporation (NSDC) a non-profit Company for a project called UDAAN, a Special Industry Initiative scheme for the State of Jammu and Kashmir with the aim to provide employment to the youths of J & K by imparting them industry specific skills.
The Company has collaborated with American Hotel and Lodging Educational Institute (AHLEI) through Presidency College and funds Operations Certification courses through Baljee Trust. Under Baljee Foundation, the Company continues to serve the well-being of the larger community in terms of assisting them to be self reliant by honing their skills. The ''Hotel Royal Orchid Employees Welfare Trust'' continues to offer financial support for medical and educational needs of certain category of employees.
In accordance with Section 135 of Companies Act, 2013 read with Companies (Corporate Social Responsibility Policy) Rules, 2014, the Company has formulated a Corporate Social Responsibility Committee, details and composition of which has been disclosed in the Corporate Governance Report forming part of this report and also on Company''s website at www.royalorchidhotels.com/ pdfs/Composition-Various-committees.pdf and the Company has also adopted a Corporate Social Responsibility Policy (Royal Orchid Corporate Social Responsibility Policy) in this respect, extracts of which are hereunder:
To define the Group''s corporate and social obligations as a responsible citizen and oversee its conduct in the context of those obligations including as follows:
1) To oversee the creation of appropriate policies, review the CSR policies from time to time.
2) To approve a strategy for discharging the Group''s corporate and social responsibilities.
3) To Monitor and Report the CSR activities to the Board.
4) To conduct an annual self-assessment of its performance and effectiveness, including its Terms of Reference, and report conclusions and recommendations for change to the Board.
Risk Management
The Company has established an effective Compliance Mechanism to mitigate the risk and will be reviewed by the Board periodically. The Company has adopted Risk Management Policy, pursuant to the provision of Section 134 of the Act, to identify and evaluate business risks and approach for mitigation of such risks. The Company has identified various risks and also has mitigation plans for each risk identified and reviewed periodically.
Green Initiatives
The Company, in order to promote green initiative, has sent electronic copies of the Annual Report for Financial Year 2015 -2016, along with the Notice of the 30th Annual General Meeting, are sent to all members whose email addresses are registered with the Company / Registrar and Share Transfer Agent ("RTA"). For members who have not registered their email addresses, physical copies of the Annual Report 2015-2016 under Section 101 of the Companies Act, 2013 are sent in the permitted mode. Members who have been sent Annual Report copies in electronic mode, desirous to have physical copies of the same can send a request, in writing, either to the Company or the RTA.
Insider Trading Regulations
Based on the requirements under SEBI (Prohibition of Insider Trading) Regulations, 2015 (erstwhile, SEBI (Prohibition of Insider Trading) Regulations, 1992), as amended till date, the Code of Conduct for prevention of Insider Trading and the Code of fair disclosure, as approved by the Board from time to time, are enforced by the Company.
The Company has adopted a Code of Conduct to regulate, monitor and report trading by insiders under the SEBI (Prohibition of Insider Trading) Regulations, 2015. This Code of Conduct also includes code for practices and procedures for fair disclosure of unpublished price sensitive information and this is made available on the Company''s website www.royalorchidhotels.com.
The objective of this Code is to protect the interest of Stakeholders at large, to prevent misuse of any price sensitive information and to prevent any insider trading activity by dealing in shares of the Company by its Directors, Officers and Designated Employees. The Company also adopts the concept of Closure of Trading Window, to prevent its Directors, Officers, Designated Employees and other employees from trading in the securities of the Company at the time when there is unpublished price sensitive information.
Statutory Auditors
The Statutory Auditors, M/s Deloitte Haskins & Sells LLP, Chartered Accountants (Firm Registration No. 117366W/ W-100018), were appointed as Statutory Auditors of the Company in the 29th Annual General Meeting of the Company to hold office as Statutory Auditors until the conclusion of 34th Annual General Meeting of the Company, subject to ratification by the shareholders in each Annual General Meeting of the Company, the same has been proposed in the Notice calling 30th Annual General Meeting of the Company.
Secretarial Auditor
Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board, in its meeting held on May 30, 2016, appointed, Mr. G. Shanker Prasad (ACS 6357), Practicing Company Secretary (CoP No. 6450), to undertake the Secretarial Audit of the Company for Financial Year 2015 - 2016.
There were no qualifications by the Auditor in their Secretarial Audit Report in Form MR-3 for the Financial Year ended March 31, 2016 which is appended as Annexure - VI to this Boards'' Report.
Explanations or Comments by the Board on every qualification, reservation or adverse remark or disclaimer made by the Statutory and Secretarial Auditors
There were no qualifications or adverse remark by either of the Auditors in their respective Reports.
Litigation
The Company has been named as a defendant along with Cygnus Business Consulting & Research Private Limited in a suit filed in mid 2008 by Kamat Hotels (India) Limited (''the plaintiff'') restraining the alleged use of the trademark of the plaintiff by the Company since 1997. The plaintiff seeks a relief of a permanent injunction restraining the Company from using the trademark ''Orchid''. The plaintiff had filed an application seeking an interim injunction while the above proceedings are pending. The Bombay High Court vide its interim order dated April 05, 2011, has allowed the Company to continue to operate its current hotels as on that date but has restrained the Company from opening new hotels under the said brand. However, the Division bench of the Bombay High Court vide its order dated May 06, 2011 has partially stayed operation of the said order and allowed opening of one of Company''s proposed hotels in Vadodara under the ''royal orchid'' brand. During the year ended 31 March 2014, the Company has obtained favourable rulings from the intellectual property appellate board. The Madras High Court has passed an order in February, 2015 for cancellation of registration of trademark, against which the Company has filed an appeal before the Supreme Court and the appeal is yet to come up for hearing before Supreme Court.
Details of significant and material orders passed by the regulators/ courts/ tribunals impacting the going concern status and the Company''s operations in future
There were no significant material orders passed by the Regulators/Courts which would impact the going concern status of the Company and its future operations.
Internal Financial Control systems
The Company has adequate system of internal controls, which ensures that all the transactions are authorized, recorded and reported correctly and assets are safeguarded and protected against loss from unauthorized use or disposition.
The Company has appointed M/s K. P. Rao and Co. as its Internal Auditors who does concurrent internal audits and management reviews and supplements the process of internal control every month. The internal control system has been designed to ensure that the financial and other records are reliable for preparing financial and other statements and for maintaining accountability of assets.
The Company also has an Audit Committee comprises of 3 (Three) professionally qualified Independent Directors, who interact with the Statutory Auditors, Internal Auditors and Management in dealing with matters within its terms of reference. This Committee mainly deals with accounting matters, financial reporting and internal controls.
Vigil Mechanism and Whistle Blower Policy
The Board of Directors of your Company has adopted the Vigil Mechanism and Whistle Blower Policy in compliance with Section 177(9) and (10) of the Companies Act, 2013, Clause 49(F) (3) of Listing Agreements with Stock Exchanges and regulations specified under LODR.
The Company has adopted a channel for receiving and redressing of employees'' complaints. Under this policy, we encourage our employees to report any reporting of fraudulent financial or other information to the stakeholders, any conduct that results in violation of the Company''s Code of Business Conduct. Likewise, under this policy, we have prohibited discrimination, retaliation or harassment of any kind against any employees who, based on the employee''s reasonable belief that such conduct or practice have occurred or are occurring. No individual in the Company has been denied access to the Audit Committee or its Chairman.
The Audit Committee periodically reviews the functioning of this mechanism. This meets the requirement under the said provisions above.
Directors'' Responsibility statement
Your Company''s Directors make the following statement in terms of Section 134(5) of the Companies Act, 2013, which is to the best of their knowledge and belief and according to the information and explanations obtained by them:
1) in the preparation of the Annual Accounts for the year ended March 31, 2016, the applicable accounting standards read with requirements set out under Schedule III to the Act, have been followed and there are no material departures from the same;
2) the Directors 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 as at March 31, 2016 and of the profit of the Company for the year ended on that date;
3) the Directors 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;
4) the Directors have prepared the annual accounts on ''a going concern basis'';
5) the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and
6) the Directors have devised proper system to ensure compliances with the provisions of all applicable laws and that such systems are adequate and operating effectively.
Payment of Listing Fee and Custodial Fee
Your Company has paid the both, Annual Listing Fee and Annual Custodial Fee for the Financial Year 2015 - 2016, to the National Stock Exchange ("NSE") and the Bombay Stock Exchange ("BSE") and to National Securities and Depositories Limited (NSDL) and Central Depository Services (India) Limited (CDSL) respectively.
Commission or Remuneration received from Holding or subsidiary Companies
During the year under review, no Commission or Remuneration was paid to the Executive Directors from Holding/Subsidiary Companies.
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 in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules there under, your Board of Directors has approved and adopted a "Policy on Prevention of Sexual Harassment at Workplace" to provide equal employment opportunity and is committed to provide a work environment that ensures every woman employee is treated with dignity and respect and afforded equitable treatment.
During the year under review the Company has not received any complaints on sexual harassment. The Company has complied with the Information required to be provided under Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013.
Dematerialization
The Company''s shares are available for dematerialization with both the Depositories viz., NSDL and CDSL. About 99.79% of the paid-up equity share capital of the Company has been dematerialized as on March 31, 2016.
Disclosure of Frauds in the Boards'' Report under section 143 of the Companies Act, 2013
During the year under review, your Directors do not observe any contract, arrangement and transaction which could result in a fraud; your Directors hereby take responsibility to ensure you that the Company has not been encountered with any fraud or fraudulent activity during the Financial Year 2015 - 2016.
other Disclosures
1) During the year under review, the Company has not bought its own shares nor has given any loans to it''s employees (including Key Managerial Personnel) of the Company for purchase of the Company shares.
2) Your Company provides e-voting facility, to all its members to enable them to cast their votes electronically on all resolutions set forth in the Notice. This is pursuant to the Section 108 of the Companies Act, 2013 and Rule 20 of the Companies (Management and Administration) Amendment Rules, 2015.
Awards and Recognitions
1) Royal Orchid Hotels was awarded as one of the " Bengaluru ''s Hot 50 Best Brands" at The Brand Summit and Awards for the years 2015 and 2014 which has been organized by Paul Writer.
2) Trip Advisor Winner 2015 - Hotel Royal Orchid is awarded with Tripadvisor âCertificate of Excellence".
3) Rocheston Accreditation Institute New York, has conferred the prestigious honour of the ''Distinguished Bar'' upon Geoffreys at Hotel Royal Orchid, Bangalore 2016.
4) Royal Orchid Metropole, Mysore has been Awarded âThe Best in Heritage Hotel" Category Tourism Awards 2016 the by Federation of Karnataka Chambers of Commerce & Industry (FKCCI), Bengaluru Karnataka.
5) Regenta Resort Varca- Goa won the âBest Debut Beach Resort" for India Hospitality Award ( West & South) 2016.
6) Royal Orchid Beach Resort, Goa was awarded for by the Goan" Best 5 star Fun & Fly Resort and the â Best Food & Bev. Manager in 5 star category (south) - Mr. sujit Kushwaha" Hospitality award of Excellence 2016
Acknowledgments
Your Directors place on record, their deep sense of appreciation to all Employees, support staff, for adopting/adapting to the values of the Company, viz., collaborative spirit, unrelenting dedication and expert thinking, to be an expertise led organization and the Company''s Customers for letting us deliver the Company''s Mission statement, to help the businesses and societies flourish.
The Board also immensely thank all the Shareholders, Investors, Vendors, Service Providers, Bankers and all other Stakeholders for their continued and consistent support to the Company during the year.
Your Directors would like to make a special mention of the support extended by the various Banks, Departments of Government of India, the State Governments, the Tax Authorities, the Ministry of Commerce, Ministry of Tourism, Government of India, Karnataka State Tourism Development Corporation (KSTDC), Ministry of Corporate Affairs, Ministry of Finance, SEBI, NSE and BSE and others and look forward to their continued support in all future endeavours.
For and on behalf of the Board of Directors of
Place : Bengaluru Chander K. Baljee R V s Rao
Date: August 12,2016 Managing Director Director
Mar 31, 2014
Dear Shareholders,
The Board of Directors of Royal Orchid Hotels Limited (''the Company'')
pleased to present the Twenty Eighth Annual Report and Audited Accounts
of the Company for the financial year ended on March 31, 2014.
Financial Performance
The Company''s Standalone and Consolidated Financial Performance for the
year ended March 31, 2014 is summaried below:
(Rs. in crores)
As on March 31, 2014
Financial Particulars Consolidated Standalone
Revenue from operations 142.04 83.65
Other income 7.11 8.73
Total revenues 149.15 92.38
Employee benefit expense 31.33 17.78
Other expenses 89.93 56.62
Gross Operating profit 27.89 17.98
Finance costs 20.49 7.34
Depreciation 13.85 4.12
Total expenses 155.60 85.86
Loss/Profit before tax (6.45) 6.52
Tax expense 3.84 4.41
Loss/Profit from discontinuation
of business and sale of (37.86) (37.86)
investments
Minority Interest 2.98 -
Loss/Profit for the year (37.49) (26.93)
(Rs. in crores)
As on March 31, 2013
Financial Particulars Consolidated Standalone
Revenue from operations 160.30 102.59
Other income 2.64 3.51
Total revenues 162.94 106.10
Employee benefit expense 36.35 23.03
Other expenses 105.85 75.30
Gross Operating profit 20.74 7.78
Finance costs 17.23 5.15
Depreciation 16.47 5.10
Total expenses 175.90 108.58
Loss/Profit before tax (12.96) (2.47)
Tax expense 0.06 (0.25)
Loss/Profit from discontinuation 3.88 4.15
of business and sale of
investments
Minority Interest 1.27 -
Loss/Profit for the year (7.75) 1.43
Consolidated revenue from operations for the year ended March 31, 2014
was registered at Rs. 142.04 crores as compared to Rs. 160.30 crores.
The decline in revenue was mainly due to closure of two hotels during
the year under review. The hospitality sector continued to be adversely
impacted by the weak economic environment both in International and
Indian, besides there was significant increase in supplies in key
Indian cities on the other.
The Consolidated gross operating profit during the year under review
was Rs. 27.89 crores as against Rs. 20.74 crores in the previous year,
registering a growth of 34.47%. The Consolidated net losses of Rs.
37.49 crores, is after considering Rs. 13.29 crore loss due to sale of
fixed assets and Rs. 24.57 crores loss from operation due to
discontinuance of business.
The gross operating profit of the Standalone has increased from Rs.
7.78 crores in the previous year to Rs. 17.98 crores registering a
growth of 131%. Standalone losses for the year is Rs. 26.93 crores as
compared to profit of Rs. 1.43 crores in financial year 2012-2013 and
the loss was mainly due to discountinuation of business and sale of
investments. During the year under review, two hotels Regenta One at
Hyderabad and Regenta Resort in Delhi were closed as the market went
down, cost of funding had gone up and return on investments was not
lucrative. To avoid future losses and due to current economic impact,
your company had disposed off these properties.
Key Business Developments
Royal Orchid Group, with 27 hotels, with 2373 keys, situated across
India (5 in Bengaluru, 2 in Mysore, 1 in Hospet, 1 in Shimoga, 2 in
Pune, 3 in Jaipur, 1 in Goa, 1 in Navi Mumbai, 1 in Mussoorie, 1 in
Vadodara, 1 in Gurgaon, 1 in Mahabaleshwar, 1 in Chandigarh, 1 in
Bharuch, 1 in Ahmedabad, 1 in Bhuj, 1 in Rajkot, 1 in Haridwar) goes
international with 1 hotel in Tanzania on Lake Victoria. The Company is
investing in a project at Tanzania and is expecting the government
approvals for the project. Your Company has been continuing its
expansion drive with upcoming hotels including Bombay, Jaipur and
Nairobi and thus, many more new hotel projects are already in pipeline,
to be established across major cities in India/abroad.
Your Company has pursued an ''Asset Light Strategy'' in expansion of its
Hotels through Management Contracts. Your company is exploring in Tier
two and pilgrimage destinations across India as a right strategy at the
right time, as there is a boost in domestic travel. Besides, the
customers prefer services of branded hotels to standalone hotels.
Your Company is taking initiatives like creating demand for domestic
leisure weekend travel which is already on the rise and cashing in
through quality engagement as today''s domestic traveler also has a keen
interest in adventuring into areas which are rich in culture, heritage
and close to nature and also areas like adventure sports.
The brand today is present across categories: 5-star Business and
Leisure hotel, 4-star Business Hotels, and Longstay hotels, Resorts and
Heritage proprieties. The brand Re:gen:ta is a contemporary arm of the
Royal Orchid Hotel group.
With Sales Offices at Bengaluru, Delhi, Mumbai, Chennai, Jaipur, Goa,
Pune, Shimoga, Mysore, Kolkata and Hyderabad, your Company is
penetrating deep into the market for a better market share.
New Hotels opened during the year under review
Royal Orchid Malaika Beach Resort on Lake Victoria, Tanzania East
Africa : The 50 suites Malaika Beach Resort is built on an imposing
rock foundation with stunning views over Lake Victoria shoreline. The
hotel is located minutes away from Mwanza Airport and a stone''s throw
from Mwanza''s Central Business District, providing easy access to
attractions such as Rubondo Island National Park and Western part of
Serengeti National Park.
Regenta Central Harimangla, Bharuch : Located in the commercially
active area of Harimangla, Regenta Central Bharuch is the first branded
hotel servicing this landmark city. It is a perfect destination for
conferences & meetings with ultra-modern conference facilities that
consist of two Board Rooms that can accomodate up to 60 people and two
pillar-less Conference Halls along with large sprawling lawns of about
12000 sqft area can take up to 1000 people.
Regenta Resort, Bhuj: It is a famous destination hub for shopping of
handicraft work. One can witness ecologically rich areas and wildlife
conservation areas in the district of Kutch. The resort is located in a
tranquil destination surrounded by nature. The resort consists of 47
rooms and banquet amenities for M.I.C.E and weddings. Bhuj connects you
to a range of civilizations and important events of South Asian history
through prehistoric archaeological finds, remnants of the Indus Valley
Civilization (Harappans), places associated with the Mahabharata and
Alexander the Great''s march into India. (source: Gujarat Tourism)
Regenta Ahmedabad: ''Regenta'' Ahmedabad has 129 well appointed rooms
with facilities like express check in, wi-fi access, multi party video
conferencing and more. The hotel has 3 banquet halls which together can
accommodate up to 700 guests ideal for weddings, business launch or
events. It is also equipped with 6 break-out meeting rooms that can
accommodate up to 20 persons with facilities for video conferencing,
which include LCD projectors, sound & light systems.
Appropriations
With a view to conserve cash for future growth and investment in our
businesses, the Board has not recommended distribution of dividend for
the fiscal year 2013-14. No amount has been transferred to general
reserve during the year.
Fixed Deposits
In terms of the provisions of Sections 58A and 58AA of the Companies
Act, 1956 read with the Companies (Acceptance of Deposits Rules) 1975,
the Company had no opening or closing balances and also has not
accepted any fixed deposits during the year under review and as such,
no amount of principal or interest was outstanding as on March 31,
2014.
Board Committees
The Company has various Committees of the Board, including Audit
Committee, Nomination and Remuneration Committee, Stakeholders
Relationship Committee and CSR Committee. Details of which are provided
in the Corporate Governance Report.
Subsidiaries
Your Company has 13 Indian Subsidiaries and 1 Foreign Subsidiary as on
the financial year ended March 31, 2014, details of which is given
under notes to accounts.
Pursuant to Section 212(8) of the Companies Act, 1956, the Ministry of
Corporate Affairs vide its General Circular No. 2/2011 dated February
8, 2011 has provided an exemption to companies from attaching the
Directors'' Report, Balance Sheet, Statement of Profit and Loss and
other documents of the subsidiary companies along with the Balance
Sheet of the Holding Company, provided, such holding companies publish
the audited consolidated financial statements in the Annual Report. A
statement containing brief financial details of the Company''s
Subsidiary for the financial year ended March 31, 2014 is included in
the Annual Report. The annual accounts of the Subsidiary Companies and
the related information will be made available to any Member of the
Company seeking such information and are available for inspection by
any Member of the Company during office hours at the Registered Office
of the Company.
Awards and Recognitions
* At Bengaluru Management Association''s 61st Anniversary Awards 2014
Royal Orchid Hotels was recognized as one of the strongest pillars of
Bengaluru''s Business World. Royal Orchid Hotels was the only Hotel
Company awarded at this prestigious forum and Mr. Baljee was
felicitated as the "Hero of Bengaluru".
* National Energy Conservation Award by Govt. of India, Ministry of
Power in 2013.
* At the prestigious National Tourism Awards in New Delhi, the ministry
of Tourism named Royal Orchid Central, Pune. "The Best Three Star
Hotel " presented by Hon''ble Vice President of India.
* Royal Orchid Central, Grazia, Navi Mumbai won the "Best Emerging
Business Hotel at the Golden Star Awards 2010.
* Royal Orchid Hotels Ltd was awarded as one of the "Bengaluru''s Hot 50
Best Brands based out of the city of Bengaluru" at Brand Summit and
Awards on June 13, 2014, presented by Hindustan Times and organized by
Paul Writer.
Litigation on Trade Mark
Royal Orchid Hotels Ltd. (ROHL) and Kamat Hotels Pvt. Ltd. (KHPL) are
having a dispute over the use of the name ORCHID. In a suit filed by
KHPL before the Bombay High Court in 2008, the Court passed a status
quo order on April 5, 2011 allowing ROHL to use its trademark ROYAL
ORCHID for its existing hotels and business, but not in respect of any
new hotel or line of business. However, in Appeal, the Division Bench
of the Bombay High Court permitted ROHL to use the trademark in respect
of its new hotel at Vadodara. The Appeal is currently pending.
In June 2013 the Intellectual Property Appellate Board (IPAB) allowed
the Appeals filed by ROHL against the orders passed by the Trade Marks
Registry rejecting the applications for registration of its trademarks
in class 42 and the IPAB ordered that ROHL''s trademarks be registered.
ROHL''s marks ROYAL ORCHID and ROYAL ORCHID HOTELS now stand registered
in Class 42 as per the Order of the IPAB and the said Order was
challenged by KHPL in a writ petition before the Madras High Court. The
same is still pending and the Madras High Court has not passed any
orders that would have an adverse impact on the registration of ROHL''s
trademarks.
On account of registration of its trademarks in favour of ROHL, ROHL
moved the Division Bench of the Bombay High Court for stay of the Order
of April 5, 2011. On July 17, 2014 the Bombay High Court passed an
Order without expressing any opinion on the merits of the matter.
Other than above, no material litigation was outstanding on the date of
report. Details of litigation on tax matters are disclosed in the
financial statements.
Corporate Governance
Your Company recognises good corporate governance and is committed to
sound corporate practices based on conscience openness and
accountability for the benefit of stakeholders. A detailed report on
Corporate Governance is available as a separate section in this Annual
Report. Certificate of the Statutory Auditors Secretarial Auditors
regarding compliance with the conditions stipulated in Clause 49 of the
Listing Agreement is provided separately as an Annexure to the
Corporate Governance Report.
Statutory Auditors
The retiring Statutory Auditors, M/s. Walker Chandiok & Co. LLP
(formerly M/s. Walker, Chandiok & Co.,) Chartered Accountants, (Firm
Registration No. 001076N/LLP No. N500013), hold office as Statutory
Auditors until the conclusion of the Twenty Eighth Annual General
Meeting.
The Audit Committee and the Board of Directors recommended the
re-appointment of M/s. Walker, Chandiok & Co. LLP, Chartered
Accountants, as the Statutory Auditors to hold office until the
conclusion of the Twenty Ninth Annual General Meeting.
The Company has received a certificate from M/s. Walker Chandiok & Co.
LLP, to the effect that, their re-appointment, if made, would be in
accordance with the limits specified under Section 139 and 141 of the
Companies Act, 2013 and that, they meet the criteria of independence.
They have also confirmed their eligibility and willingness to accept
office and be re-appointed as the Statutory Auditors to hold office
until the conclusion of the Twenty Ninth Annual General Meeting. The
proposal for their re-appointment is included in the Notice of the
ensuing Annual General Meeting.
Particulars of Employees
The provisions of Section 217(2A) of the Companies Act, 1956, read with
the Companies (Particulars of Employees) Rules, 1975, as amended, is
not applicable.
Conservation of Energy, Technology Absorption, Foreign Exchange
Earnings and Outflow
Your Company is continuously putting its efforts towards conservation
of energy across all its units and in the process, has implemented
Energy Conservation Program, which includes :
* Installation of STP Plant with tertiary system in place for final
treatment and utilization of treated water for Cooling tower, Flushing,
for extensive landscaping in our hotels and other cleaning purpose.
* Conversion of all the Incandescent, CFL, Fluresant, Halogen, Metal
Halide, Sodium Vapour lamp to COB LED.
* Implementation of Green Building Requirements.
* Rolling out extract from HACCP, ISO14001, Green Globe etc
* Implementation of Total Productive Maintenance - Japanese Concept
* Strategic implementation of energy conservation program for Efficient
operation
* Implementation of Balance score card for development of process to
improve operational efficiency
* The Sewage Treatment Plants in our hotels are set up with the
objective to produce a waste stream suitable for discharge or reuse in
the environment, especially for the extensive landscape in all our
hotels.
* Heat recovery systems are in place to tap the waste heat for
productive utilization - De-super heaters are used in the Air-
conditioning plant for heating up of water for domestic use in rooms
and public areas.
* Solar system is used for hot water generation and lighting.
* BMS is installed for efficient operation of engineering systems.
* All new hotel projects have achieved 100% LED Lighting for energy
conservation ( Bharuch - Gujarat & RO Azure, Nairobi.
In the opinion of the Board, the required particulars pertaining to
technology absorption as per Rule 2 of Companies (Disclosure of
Particulars in the Report of Board of Directors) Rules, 1988 are not
applicable as the hotel forms a part of the service industry and the
company does not have any significant manufacturing operations.
During the year under review, your Company earned Foreign Exchange
Revenue of Rs. 18.01 crores (Previous Year Rs. 20.57 crores) and the
Foreign Exchange outgo on account of commission and others is Rs. 1.76
crores (Previous year Rs. 0.81 crores).
The particulars as prescribed 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, are set out in the Annexure
to this Director''s Report.
With regard to Auditor''s remark on the pending statutory dues, the
Company had closed down the hotel at Delhi during the year under review
and now the Company has approached the Tax authorities for the
assessment and demand of statutory dues, which would be paid on issue
of such demand. During the year under review, the Company has supported
the subsidiaries during the previous year and due to market slowdown,
there were instances of delayed payment of interest by the
subsidiaries. During the year there was no continuing defaults by the
Company as at the year end.
Directors'' Responsibility Statement
Your Company''s Directors make the following statement in terms of
Section 217(2AA) of the Companies Act, 1956, which is to the best of
their knowledge and belief and according to the information and
explanations obtained by them:
I. The financial statements have been prepared in conformity with the
applicable Accounting Standards issued by the Institute of Chartered
Accountants of India and requirements of the Companies Act, 1956, (the
Act) to the extent applicable to us; on the historical cost convention;
as a going concern and on the accrual basis. There are no material
departures in the adoption of the applicable Accounting Standards.
II. The Board of Directors 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
profit or loss of the Company for that period.
III. The Board of Directors 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. The financial statements have been audited by M/s. Walker Chandiok
& Co. LLP, Chartered Accountants, the Company''s Statutory Auditors.
V. The Audit Committee meets periodically with the Internal Auditors
and the Statutory Auditors to review the manner in which the Auditors
are discharging their responsibilities and to discuss audit, internal
control and financial reporting issues.
VI. To ensure complete independence, the Statutory Auditors and the
Internal Auditors have full and free access to the Members of the Audit
Committee to discuss any matter of substance.
Management Discussion and Analysis Report
Management Discussion and Analysis Report as required under Clause 49
of the Listing Agreement is presented in a separate section forming
part of the Annual Report.
Corporate Social Responsibility (CSR)
Your Company has constituted CSR Committee and has adopted a CSR
policy, including the activities to be undertaken during the year. The
Company is focusing on the community education and skill development
programs. Presidency Educational Trust was established to focus on the
education in the field of hospitality sector. The academy is a unique
institution where students are exposed to hotel operations continuously
as a part of their academic curriculum. This is in addition to the
mandatory industrial training.
Insider Trading Regulations
Based on the requirements under SEBI (Prohibition of Insider Trading)
Regulations, 1992, as amended from time to time, the code of conduct
for prevention of insider trading and the code for corporate
disclosures, as approved by the Board from time to time, are enforced
by your Company. The objective of this Code is to protect the interest
of Shareholders at large, to prevent misuse of any price sensitive
information and to prevent any insider trading activity by dealing in
shares of the Company by its Directors, designated employees. The
Company also adopts the concept of Trading Window Closure, to prevent
its Directors, Officers, Designated Employees and other employees from
trading in the securities of the company at the time when there is
unpublished price sensitive information. The Board has appointed the
Company Secretary as the Compliance Officer under the Code.
Internal Control Systems
The Company has a proper and adequate system of internal controls. This
ensures that all the transactions are authorised, recorded and reported
correctly and assets are safeguarded and protected against loss from
unauthorized use or disposition.
An extensive programme of internal audits and management reviews
supplements the process of internal control. Properly documented
policies, guidelines and procedures are laid down for this purpose. The
internal control system has been designed to ensure that the financials
and other records are reliable for preparing financial and other
statements and for maintaining accountability of assets.
The Company also has an Audit Committee, comprising three
professionally qualified Directors, who interact with the Statutory
Auditors, Internal Auditors and Management in dealing with matters
within its terms of reference. This Committee mainly deals with
accounting matters, financial reporting and internal controls.
Acknowledgments
Your Directors places on record, their deep sense of appreciation to
all employees, support staff for adopting to the values of the Company,
viz., collaborative spirit, unrelenting dedication and expert thinking,
to be an expertise led organization and the Company''s valued customers.
The Board immensely thank all the shareholders, investors, vendors,
service providers, and academic institutions and all other stakeholders
for their continued and consistent support to the Company during the
year.
Your Directors would like to make a special mention of the support
extended by the various Banks, Departments of Government of India, the
State Governments, the Tax Authorities, the Ministry of Commerce,
Ministry of Corporate Affairs, Ministry of Finance, Securities and
Exchange Board of India, NSE & BSE and others and look forward to their
continued support in all future endeavors.
For and on behalf of the Board of Directors,
Place : Bengaluru Chander K Baljee R V S Rao
Date : August 13, 2014 Managing Director Director
Mar 31, 2013
Dear Shareholders,
The have pleasure in presenting the Twenty Seventh Annual Report of the
Company together with the Audited Accounts for the year ended 31st
March 2013.
Financial Results:
The performance of the Company for the fnancial year ended 31st March
2013 is summarized below:
(Rs. In Crores)
CONSOLIDATED STANDALONE
Particulars 2012-13 2011-12 2012-13 2011-12
Income from Operations 169.41 160.56 111.70 93.29
Other Income 30.30 1.86 31.17 1.68
Total Income 199.71 162.42 142.87 94.97
Gross Operating Proft 47.95 28.01 34.99 11.45
Interest (29.40) (16.29) (17.32) (4.27)
Depreciation (27.36) (14.15) (15.99) (5.37)
Proft/Loss before Tax (9.07) (2.43) 1.68 1.81
Provision for Taxation (0.05) 2.51 0.25 (0.61)
Minority Interest and
Share of Proft in Associate 1.27 2.31 - -
Net proft/Net Loss
after tax (7.75) (2.63) 1.43 1.20
With total consolidated revenue of Rs.199.71 Crores, your Company has
reported an increase in its total consolidated revenue about by 23% for
the fnancial year under review as compared to the previous fnancial
year. The Gross Operating Proft has increased by 71% as compared to
2011-2012. The Proft after Tax stood at (-Rs.7.75) Crores, as against
(-Rs.2.63) Crores of previous year. Rising of interest rates, increase in
depreciation and increase in the operating costs are the main reasons
for the losses of the company. With several new hotel projects in
progress, your Company is hopeful of turnaround in the current fnancial
year.
Dividend
In view of the inadequate profts and also with an intention to conserve
the resources for the company''s business expansion, the Board of
Directors has decided not to propose any dividend for the fnancial year
2012-13.
Corporate Debt Restructuring
The Company had fled its proposal with Corporate Debt Restructuring
Cell, Mumbai for restructuring of its debts under the Corporate Debt
Restructuring (CDR) mechanism. Please refer to the "Management
Discussions and Analysis" for further details.
NEW HOTELS OPENED
During the year, your Company widened its geographical presence and
added the following 3 new hotel properties to its portfolio:
- Hyderabad
Hotel Regenta One, with 158 guest rooms commenced its operations in
August, 2012.
- Chandigarh
Hotel Regenta Central Ashok, Chandigarh, with 66 guest rooms commenced
its operations in September, 2012
- Jaipur
Hotel Regenta Central, with 70 guest rooms commenced its operations in
February, 2013.
NEW HOTEL PROJECTS IN PROGRESS
- Mumbai
The Construction of the Four Star Hotel at Powai, Mumbai with 220 rooms
has commenced and the hotel is likely to commence its operations by
2015.
UPCOMING HOTELS
Your Company is in the process of establishing new hotels in the
following locations, in near future:
Sl
No Location
1 Surat
2 Bharuch
3 Lokhandwala
4 Kolkata
5 Tanzania
Business Expansion
The Company has drawn ambitious expansion plans so as to reach a target
of 4000 keys by the year 2015. This will be achieved by using both
organic and inorganic approaches.
Sale of stake in Parsvnath Royal Orchid Hotels Limited, Delhi
In the process of reorganization of geographical representation of our
brand, the company has sold the entire stake in Parsvnath Royal Orchid
Hotels Limited and the JV Cancellation Agreement was executed on March
30, 2013.
Awards
1. During the year, Hotel Royal Orchid, Bangalore was awarded Hotel of
the year 2012-13 under Luxury Business by Golden Star Awards
2. Royal Orchid Central, Pune was awarded Best Business Hotel of the
year 2012-13 under Midscale by Golden Star Awards.
3. EDGE 2012 Award for cloud-based CRM for Royal Orchid Hotels.
4. TIMES FOOD Awards for ''Best World Cuisine'' and ''Best Resto-bar'' -
2012.
5. Limca Book of Records for making of "Maki Sushi", a traditional
Japanese festive food
6. 16 Certifcates of Excellence awards from Trip Advisor for its
various hotels.
Subsidiary Companies
Your Company has 14 subsidiary companies as at 31st March, 2013, of
which 10 are wholly owned subsidiaries. The Ministry of Corporate
Afairs vide its General Circular No.2/2011 dated 08th February, 2011
has exempted the companies for not attaching the detailed fnancial
statements of each subsidiary company with this report.
During the year under review, Cosmos Premises Private Limited had
become a subsidiary of your Company by virtue of composition of Board
of Directors.
Your company had increased its stake in one of its subsidiaries viz.,
Maruti Comforts & Inn Private Limited by acquiring 1,98,536 shares.
Further, the company had also acquired 15,00,000 shares in Amartara
Hospitality Private Limited.
However, in compliance with the terms of the said exemption approval of
MCA, a statement showing the relevant details of the Subsidiary
Companies is enclosed as a part of this Annual Report. The annual
accounts of the subsidiary companies and the related detailed
information will be made available to the holding and subsidiary
company investors seeking such information at any point of time and
also on the website of the Company, www.royalorchidhotels.com
Change in Directorate
Mr. Naresh K Malhotra resigned from the Board on March 30, 2013. The
Board wish to place on record the valuable contribution made by Mr.
Naresh K Malhotra to the Company and to the deliberations of the Board
and its Committees.
Pursuant to the provisions of Section 260 of the Companies Act, 1956,
the Board of Directors at their meeting held on 05th August, 2013
appointed Mr. K Jairaj as an additional Director. Mr. K Jairaj holds
ofce up to the date of the ensuing
Annual General Meeting. The Company has received a notice of
candidature in writing under Section 257 of the Companies Act, 1956
proposing for the ofce of director.
Mr. R V S Rao retires by rotation at the ensuing Annual General Meeting
and being eligible, ofers himself for re-appointment.
A brief resume of the said directors is annexed to this report. The
Board recommends their appointments by the members at the ensuing
Annual General Meeting.
Auditors
The Statutory Auditors M/s. Walker, Chandiok & Co., Chartered
Accountants, Bengaluru, retire at the ensuing Annual General Meeting
and have confrmed their eligibility and willingness to accept ofce, if
re-appointed.
Auditors'' Report
Auditors'' Report as issued by M/s. Walker, Chandiok & Co., Chartered
Accountants, Bengaluru, contains certain observations and which are
replied by the Board as provided u/s. 217(3) of the Companies Act,
1956.
In respect of the comments of the Auditors on the frequency of the
physical verifcation of fxed assets, efective steps would be taken to
complete the same
As regards to comment on internal controls with respect to purchase and
recording of fxed assets, the efective steps have already been taken to
correct and strengthen the same.
In respect of delay in remittance of statutory dues, the Audit
Committee advised to take the corrective steps. Subsequently, the
necessary arrangements have been made to remit the same to the
respective departments.
Public Deposits
The Company has not accepted any fxed deposits from Public during the
year.
Management Discussion and Analysis Report
The Report as required under the Clause 49 of the Listing Agreement is
annexed and forms part of the Directors'' Report.
Corporate Governance
The Report on Corporate Governance along with a Certifcate from a
Practicing Company Secretary confrming the Compliance is annexed and
forms part of the Directors'' Report.
Personnel
The details of employees as specifed under section 217(2A) of the
Companies Act, 1956 read with the Companies (Particulars of Employees)
Rules, 1975 as amended upto date is not applicable.
Additional Information in accordance with the provisions of section
217(1)(e) of the Companies Act, 1956 read with the Companies
(Disclosure of Particulars in the Report of the Board of Directors)
Rules, 1988
- Conservation of energy
Your company is continuously putting its eforts towards conservation of
energy across all its units and in the process, has implemented a well
documented Energy Conservation Program, which includes use of:
- Energy efcient lighting- LED
- BMS - Building automation system
- VFD -Variable frequency drive for motors
- Modulating valves to control the fow
- Heat exchanger systems for utilizing the waste heat
- Solar system for generating hot water
- Sewerage Treatment Plants - for reuse of water for gardening,
Cooling tower, fushing and cleaning purpose
- Latest energy conservation gadgets
- Technology absorption
In the opinion of the Board, the required particulars pertaining to
technology absorption as per Rule 2 of Companies (Disclosure of
Particulars in the Report of Board of Directors) Rules, 1988 are not
applicable as the hotel forms a part of the service industry and the
company does not have any signifcant manufacturing operations.
- Foreign Exchange Earnings and Outgo
During the year under review, your Company earned Foreign Exchange
Revenue of Rs.20.57 Crores (Previous Year Rs.37.03 Crores) and the Foreign
Exchange outgo on account of commission and others is Rs.0.81 Crores
(Previous year Rs.1.82 Crores).
Safety and security
Keeping in mind the security threats to the hospitality industry in
India, your Company has stepped up its eforts to ensure an environment
of wellbeing, safety and security for all its guests and co-workers.
Our guest foors as well as all public areas are well equipped with
closed circuit cameras, metal detectors and alarm system. Moreover,
guest room doors are installed with computerized electronic card
locking system to enhance security. Safety deposit lockers have been
placed in all rooms to store valuables. Movement of all vehicles,
employees, vendors and guests is monitored, scanned and electronic data
preserved in our archives. An Emergency Response Team exists in all the
hotels, which is always on a standby mode to respond immediately to any
unforeseen emergency in the hotel.
Trade Mark Case
In a suit fled by Kamat Hotels (India) Limited against the Company for
alleged infringement and passing of of Trade Mark "the Orchid", a
single Judge of the Hon''ble High Court of Bombay vide its Interim Order
dated 5th April 2011, has allowed our Company to continue with its
existing hotels and business under its Trade Mark but restrained the
use of the same, for any new hotel or line of business. A division
bench of the Bombay High Court has admitted the appeal fled by the
Company against the above interim order and granted a partial stay
allowing the Company to open its new hotel at Vadodara in May 2011.
Further, Intellectual Property Appellate Board (IPAB) had passed
favourable orders on which Kamat Hotels (India) Limited has fled suits
against our company in the Hon''ble High Court of Chennai.
In addition to the above, IPAB, vide its order dated 18.06.2013, has
allowed the Company''s appeal against the refusal of the Registrar of
Trademarks to register the trademarks.
Briefy, it is the case of our Company that we are the prior adopter and
user of the mark "the Orchid" in relation to Hotel Business and that
there has been inordinate delay in fling the suit and acquiescence by
Kamat Hotels, disentitling it to the reliefs claimed
Directors'' Responsibility Statement
Pursuant to the provisions of Section 217(2AA) of the Companies Act,
1956, the Board of Directors, based on the representations received
from the Operations Management, hereby confrms that:
i. In the preparation of the annual accounts for the year ended 31st
March 2013, the applicable accounting standards have been followed and
that there are no material departures.
ii. It has in the selection of the accounting policies, consulted the
Statutory Auditors and has 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 afairs of the Company as at 31st March 2013
and of the proft of the Company for that period.
iii. It has taken proper and sufcient 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, to the best of its knowledge
and ability. There are however, inherent limitations, which should be
recognized while relying on any system of internal control and records.
iv. It has prepared the annual accounts for the year ended 31st March
2013, ''on a going concern basis''.
Acknowledgments
Your Directors record their sincere thanks for the valuable support
extended by the customers, suppliers, investors, bankers and other
statutory authorities. Your Directors acknowledge with deep
appreciation the dedicated services rendered by the employees of the
Company. Your Directors express their sincere thanks to all the
shareholders for the confdence reposed in the Management and look
forward to their continued support.
For and on behalf of the Board of Directors,
Bengaluru Chander K Baljee
05th August 2013 Chairman & Managing Director
Mar 31, 2012
The have pleasure in presenting the Twenty Sixth Annual Report of the
Company together with the Audited Accounts for the year ended 31st
March 2012.
Financial Results:
The performance of the Company for the financial year ended 31st March
2012 is summarized below:
(Rs. In Crores)
CONSOLIDATED STANDALONE
Particulars 2011-12 2010-11 2011-12 2010 -11
Income from Operations 160.56 152.13 93.29 92.87
Other Income 1.86 2.61 1.68 2.14
Total Income 162.42 154.74 94.97 95.01
Gross Operating Profit 28.01 42.07 11.45 22.58
Interest (16.29) (11.28) (4.27) (2.26)
Depreciation (14.15) (13.71) (5.37) (5.61)
Profit before Tax (2.43) 17.08 1.81 14.71
Provision for Taxation 2.51 (5.61) (0.61) (5.05)
Minority Interest and
Share of Profit in Associate 2.31 0.75 - -
Net profit after tax (2.63) 12.22 1.20 9.66
With total consolidated revenue of Rs.162.42 Crores, your Company has
reported an increase in its total consolidated revenue about by 5% for
the financial year under review as compared to the previous financial
year. The Gross Operating Profit has decreased by 33% as compared to
2010-2011. The Profit after Tax stood at (-Rs.2.63) Crores, as against Rs.
12.22 Crores of previous year. Rising of interest rates and increase in
the operating costs are the main reasons for the losses of the company.
With several new hotel projects in progress, your Company is hopeful of
turnaround in the current financial year.
Dividend
In view of the reduction in the profits and also with an intention to
conserve the resources for the company's ongoing new hotel projects,
the Board of Directors has decided not to propose any dividend for the
financial year 2011-12.
NEW HOTELS OPENED
Your Company widened its network and added the following 4 new hotel
properties to its portfolio:
- Vadodara
Hotel Royal Orchid Central, Vadodara, with 81 guest rooms, commenced
its operations in May, 2011.
- Gurgaon
Central Blue Stone, Gurgaon, with 46 rooms commenced its operations in
November, 2011.
- New Delhi
Regenta Hotel & Convention Centre, New Delhi, with 48 guest rooms,
commenced its operations in December 2011.
- Mahabaleshwar
Regenta MPG Club, Mahabaleshwar, with 32 guest rooms, commenced its
operations in May 2012.
NEW HOTEL PROJECTS IN PROGRESS
- Hyderabad
The Construction of the Five Star Hotel with 233 rooms at Hyderabad is
in the advanced stages of completion. The first phase of the Five Star
Hotel with 108 rooms is likely to commence their operations by August,
2012.
- Mumbai
The Construction of the Four Star Hotel at Powai, Mumbai with 220 rooms
has commenced and the hotel is likely to commence its operations by
2014.
UPCOMING PROJECTS
Your Company is in the process of establishing new hotels in the
following locations, in near future:
Sl No Location
1 Surat
2 Bharuch
3 Chennai
4 Kolkata
5 Lokhandwala
Business Expansion
The Company has drawn ambitious expansion plans so as to reach a target
of 4000 keys by the year 2015. This will be achieved by using both
organic and inorganic approaches.
Further, the company has taken steps to open new hotels in new brand
"Re:gen:ta." Regenta Hotel & Convention Centre, New Delhi, was opened
during December, 2011 under the new brand.
Sale of stake in Royal Orchid Ahmedabad Private Limited
In the process of reorganization of geographical representation of our
brand, the company has sold the entire stake in Royal Orchid Ahmedabad
Private Limited and the definitive agreement was executed on April 18,
2012.
Awards
i. During the year, Royal Orchid Central, Bengaluru was awarded
"National Energy Conservation Award, 2011". The award was presented by
the Ministry of Power, Government of India.
ii. Royal Orchid Central, Ahmedabad won the "Hospitality Leadership"
at the GOLDEN STAR AWARDS, instituted by Stars of the Industry Group.
iii. Royal Orchid Central, Ahmedabad won the "First Class Business
Award".
iv. Royal Orchid Central Grazia, Navi Mumbai won the "Most admired
Customer Services of the year" award.
v. Royal Orchid Suites, Bengaluru won the "National Tourism Award for
Best Business Hotel" award.
vi. Ramada, Bengaluru managed by Royal Orchid Hotels Limited is the
only hotel in India to have won the bronze awards for two categories
mentioned below during the Wyndham Hotel Group Brand Conference held in
Las Vegas this April 2012: a) Quality Customer feedback and guest
satisfaction scores b) most engaged front office team.
vii. 16 Certificate of Excellence awards from Trip Advisor for its
various hotels.
Subsidiary Companies
Your Company has 14 subsidiary companies as at 31st March, 2012, of
which 11 are wholly owned subsidiaries. The Ministry of Corporate
Affairs vide its General Circular No.2/2011 dated 08th February, 2011
has exempted the companies for not attaching the detailed financial
statements of each subsidiary company with this report.
However, in compliance with the terms of the said exemption approval of
MCA, a statement showing the relevant details of the Subsidiary
Companies is enclosed as a part of this Annual Report. The annual
accounts of the subsidiary companies and the related detailed
information will be made available to the investors seeking such
information at any point of time and also avilable on the website of
the Company, www.royalorchidhotels.com
Directors
Mr. Naresh K Malhotra retires by rotation at the ensuing Annual General
Meeting and being eligible, offers himself for re-appointment.
Auditors
The Statutory Auditors M/s. Walker, Chandiok & Co., Chartered
Accountants, Bengaluru , retire at the ensuing Annual General Meeting
and have confirmed their eligibility and willingness to accept office,
if re-appointed.
Auditors' Report to Shareholders
In respect of the comments of the Auditors on the frequency of the
physical verification of fixed assets, as advised by the Audit
Committee of Directors, physical verification of fixed assets would be
carried out during the financial year 2012-13 and once in a year,
hereinafter.
In respect of strengthening the Internal Controls of purchase of fixed
assets, the Audit Committee advised the Management to put the system in
place.
In respect of delay in repayment of dues to banks and financial
institutions, the Audit Committee advised to take the corrective steps.
Public Deposits
The Company has not accepted any fixed deposits from Public during the
year.
Management Discussion and Analysis Report
The Report as required under the Clause 49 of the Listing Agreement is
annexed and forms part of the Directors' Report. Corporate Governance
The Report on Corporate Governance along with a Certificate from a
Practicing Company Secretary confirming the Compliance is annexed and
forms part of the Directors' Report.
Employess Stock Option Scheme (ESOS)
The details of the ESOS as required under the Securities and Exchange
Board of India (Employee Stock Otion Scheme and Employee Stock Purchase
Scheme) Guidelines, 1999 are annexed and from part of the Directors'
Report.
Personnel
As required under Section 217(1 )(e) of the Companies Act, 1956, read
with the Rules thereunder, 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 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 Registered Office of the Company.
Additional Information in accordance with the provisions of section
217(1) (e) of the Companies Act, 1956 read with the Companies
(Disclosure of Particulars in the Report of the Board of Directors)
Rules, 1988
- Conservation of energy
Your company is continuously putting its efforts towards conservation
of energy across all its units and in the process, has implemented a
well documented Energy Conservation Program, which includes use of:
- Energy efficient lighting- LED
- BMS - Building automation system
- VFD -Variable frequency drive for motors
- Modulating valves to control the flow
- Heat exchanger systems for utilizing the waste heat
- Solar system for generating hot water
- Sewerage Treatment Plants - for reuse of water for gardening,
Cooling tower, flushing and cleaning purpose
- Latest energy conservation gadgets
- Technology absorption
In the opinion of the Board, the required particulars pertaining to
technology absorption as per Rule 2 of Companies (Disclosure of
Particulars in the Report of Board of Directors) Rules, 1988 are not
applicable as the hotel forms a part of the service industry and the
company does not have any significant manufacturing operations.
- Foreign Exchange Earnings and Outgo
During the year under review, your Company earned Foreign Exchange
Revenue of Rs. 37.03 Crores (Previous Year Rs. 37.42 Crores) and the
Foreign Exchange outgo on account of commission and others is Rs. 2.01
Crores (Previous year Rs. 2.26 Crores).
Safety and security
Keeping in mind the security threats to the hospitality industry in
India, your Company has stepped up its efforts to ensure an environment
of wellbeing, safety and security for all its guests and co-workers.
Our guest floors as well as all public areas are well equipped with
closed circuit cameras and alarm system. Moreover, guest room doors are
installed with computerized electronic card locking system to enhance
security. Safety deposit lockers have been placed in all rooms to store
valuables. Movement of all vehicles, employees, vendors and guests is
monitored, scanned and electronic data preserved in our archives. An
Emergency Response Team exists in all the hotels, which is always on a
standby mode to respond immediately to any unforeseen emergency in the
hotel.
Trade Mark Case
In a suit filed by Kamat Hotels (India) Limited against the Company for
alleged infringement and passing off of Trade Mark 'the Orchid', a
single Judge of the Hon'ble High Court of Bombay vide its Interim Order
dated 5th April 2011, has allowed our Company to continue with its
existing hotels and business under its Trade Mark but restrained the
use of the same, for any new hotel or line of business. A division
bench of the Bombay High Court has admitted the appeal filed by the
Company against the above interim order and granted a partial stay
allowing the Company to open its new hotel at Vadodara in May 2011.
Further, Intellectual Property Appellate Board (IPAB) had passed
favourable orders on which Kamat Hotels (India) Limited has filed suits
against our company in the Hon'ble High Court of Chennai.
Briefly, it is the case of our Company that we are the prior adopter
and user of the mark 'the Orchid' in relation to Hotel Business and
that there has been inordinate delay in filing the suit and
acquiescence by Kamat Hotels, disentitling it to the reliefs claimed.
Directors' Responsibility Statement
Pursuant to the provisions of Section 217(2AA) of the Companies Act,
1956, the Boa rd of Directors, based on the representations received
from the Operations Management, hereby confirms that:
i. In the preparation of the annual accounts for the year ended 31st
March 2012, the applicable accounting standards have been followed and
that there are no material departures.
ii. It has in the selection of the accounting policies, consulted the
Statutory Auditors and has 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 as at 31st March 2012
and of the profit of the Company for that period.
iii. It has 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, to the best of its knowledge
and ability. There are however, inherent limitations, which should be
recognized while relying on any system of internal control and records.
iv. It has prepared the annual accounts for the year ended 31st March
2012, 'on a going concern basis'.
Acknowledgments
Your Directors record their sincere thanks for the valuable support
extended by the customers, suppliers, investors, bankers and other
statutory authorities. Your Directors acknowledge with deep
appreciation the dedicated services rendered by the employees of the
Company. Your Directors express their sincere thanks to all the
shareholders for the confidence reposed in the Management and look
forward to their continued support.
For and on behalf of the Board of Directors,
Bengaluru Chander K Baljee
30th May 2012 Chairman & Managing Director
Mar 31, 2011
Dear Shareholders,
We have pleasure in presenting the Twenty Fifth Annual Report of the
Company together with the Audited Accounts for the year ended 31 st
March 2011.
Financial Results:
The performance of the Company forthe financial year ended 31 st March
2011 is summarized below:
(Rs. in Crores)
CONSOLIDATED STANDALONE
Particulars 2010-11 2009-10 2010-11 2009-10
Income from Operations 152.07 120.45 92.87 77.83
Other Income 2.67 1.42 2.14 1.14
Total Income 154.74 121.87 95.01 78.97
Gross Operating Profit 42.07 28.82 22.58 19.35
Interest (11.28) (7.59) (2.26) (2.41)
Depreciation (13.71) (12.37) (5.61) (5.61)
Profit before Tax 17.08 8.86 14.71 11.33
Provision for Taxation (5.61) (3.93) (5.05) (3.05)
Minority Interest and Share 0.75 2.04 - -
of Profit in Associate
Net profit after tax 12.22 6.97 9.66 8.28
With total consolidated revenue of Rs.154.74 Crores, your Company has
for the financial year under review reported an increase in its total
consolidated revenue by 27% as compared to the previous financial year.
The Gross Operating Profit has also shown an increase of 46% as
compared to 2009-2010. The Profit after Tax stood at Rs. 12.22 Crores,
as against Rs. 6.97 Crores of previous year, showing an increase by
75%. With improving economic conditions and several new hotel projects
in progress, your Company is hopeful of continuing this trend in the
current financial year also.
Dividend
The Board of Directors recommends the payment of Rs.1.50 (one rupee and
fifty paisa) per equity share (15% on face value Rs.10) for the year
ended 31 st March 2011, subject to the approval of shareholders. The
outflow of funds on account of payment of dividend, including tax on
dividend would beRs.476 Lacs.
NEW HOTELS OPENED
During the year, your Company widened its network and added the
following 5 new hotel properties to its portfolio:
- Hospet
Royal Orchid Central Kireeti, Hospet, with 135 rooms commenced its
operations in October, 2010.
-Mussoorie
Royal Orchid Fort Resort, Mussoorie, with 60 guest rooms, commenced its
operations in December 2010.
-Shimoga
Royal Orchid Central, Shimoga, with 108 guest rooms, commenced its
operations in March, 2011.
- Jaipur
Hotel Royal Orchid, Jaipur, a Five Star Hotel, with 139 guest rooms,
commenced its operations in March, 2011.
-Vadodara
Hotel Royal Orchid, Vadodara with 81 guest rooms, commenced its
operations in May, 2011.
NEW HOTEL PROJECTS IN PROGRESS
- Hyderabad
The Construction of the Five Star Hotel with 233 rooms at Hyderabad and
a Suites hotel with 49 rooms in the same location is in the advanced
stages of completion. The first phase of the Five Star Hotel with 108
rooms and the Suites Hotel are likely to commence their operations by
October, 2011.
-Mumbai
The Construction of the Four Star Hotel at Powai, Mumbai with 260 rooms
has commenced and the hotel is likely to commence its operations by
2013.
UPCOMING PROJECTS
Your Company is in the process of establishing new hotels in the
following locations, in nearfuture:
SI No Location
1 Mumbai
2 Surat
3 Delhi
4 Bharuch
5 Greater Noida (UP)
6 Faridabad
7 Chennai
8 Kolkata
9 Shimla
Business Expansion
The Company has drawn ambitious expansion plans so as to reach a target
of 4000 keys by the year 2015. This will be achieved by using both
organic and inorganic approaches.
Awards
I. During the year, Hotel Royal Orchid Central, Pune was declaredas
"Hotel of the Year" in the First Class Business Hotel Category at the
GOLDEN STAR AWARDS 2010. The award was presented by the Ministry of
Tourism, Government of India.
ii. Royal Orchid Central Grazia.Navi Mumbai wonthe"Best Emerging Hotel
of theYear-2010-11"attheGOLDEN STAR AWARDS, instituted by Stars of the
Industry Group.
iii. Royal Orchid Beach Resort & Spa, Goa won the Pegas Award for
Excellence.
iv. Your Company is also proud that an executive of Royal Orchid Hotel
was awarded the "Most Admired Executive House Keeper" award at the
GOLDEN STARAWARDS 2010
v. Royal Orchid Central Ahmedabad was awarded the "Most Admired
General Manager of theYear" at the GOLDEN STARAWARDS.
vi. Royal Orchid Central Grazia, Navi Mumbai won the "Most admired GM
of the year" award at the GOLDEN STAR AWARDS, instituted by Stars of
the Industry Group.
Subsidiary Companies
Your Company has 14 subsidiary companies as at 31st March 2011, of
which 11 are wholly owned subsidiaries. Your Company has obtained the
required approval from the Central Government, Ministry of Corporate
Affairs (MCA) exempting from attaching the detailed financial
statements of each Subsidiary Company with this Annual Report, pursuant
to the provisions of Section 212(8)of the Companies Act,1956( letter
dated 17/01/2011 vide No. 47/5/2011-CL- III) and accordingly, only a
Consolidated Financial Statement is presented with this Annual Report,
along with the Standalone Financial Results of the Company.
However, in compliance with the terms of the said exemption approval of
MCA, a statement showing the relevant details of the Subsidiary
Companies is enclosed as a part of this Annual Report. The annual
accounts of the subsidiary companies and the related detailed
information will be made available to the holding and subsidiary
company investors seeking such information at any point of time and
also on the website of the Company, www.royalorchidhotels.com
Central Government Approvals
During the year, your company has obtained the approval of Central
Government for payment of remuneration to Mr. C K Baljee, Chairman &
Managing Director and Mr. Keshav Baljee, President of the Company, for
the year ended 31st March 2011.
Directors
The Director Mr. Jaithirth Rao resigned with effect from 16th May 2011
and the Directors wish to place on record their sincere thanks for his
valuable contribution to the Board, during his tenure.
The Director Mr. RVS Rao retires by rotation at the ensuing Annual
General Meeting and being eligible, offers himself for re-appointment.
Mr. Vijay K Rekhi was appointed as an Independent Director of the
Company effective 6th July 2011. As Mr. Vijay K Rekhi shall hold
office, up to the date of the ensuing Annual General Meeting, the
consent of Shareholders is sought for his appointment at the said
meeting.
Auditors
The Statutory Auditors M/s. Walker, Chandiok & Co., Chartered
Accountants, Bangalore, retire at the ensuing Annual General Meeting
and have confirmed their eligibility and willingness to accept office,
if re-appointed.
Auditors' Report to Shareholders
In respect of the comments of the Auditors on the frequency of the
physical verification of fixed assets, as advised by the Audit
Committee of Directors, physical verification of fixed assets would be
carried out once in a year, hereinafter.
Public Deposits
The Company has not accepted any fixed deposits from Public during the
year.
Management Discussion and Analysis Report
The Report as required underthe Clause 49 of the Listing Agreement is
annexed and forms part of the Directors' Report.
Corporate Governance
The Report on Corporate Governance along with a Certificate from a
Practicing Company Secretary confirming the Compliance is annexed and
forms part of the Directors' Report.
Employees Stock Option Scheme (ESOS)
The details of the ESOS as required underthe Securities and Exchange
Board of India (Employee Stock Option Scheme and Employee Stock
Purchase Scheme) Guidelines, 1999 are annexed and form part of the
Directors' Report.
Personnel
In terms of Companies (Particulars of Employees) Rules, 1975 read with
the Notification dated 31st March 2011, issued by the Ministry of
Corporate Affairs, New Delhi, the details of employees as required to
be furnished under Section 217 (2A) of the Companies Act, 1956 are not
applicable to the Company.
Additional Information in accordance with the provisions of section
217(1) (e) of the Companies Act, 1956 read with the Companies
(Disclosure of Particulars in the Report of the Board of Directors)
Rules, 1988
- Conservation of Energy
Your company is continuously putting its efforts towards conservation
of energy across all its units and in the process, has implemented a
well documented Energy Conservation Program, which includes use of:
- Energy efficient lighting- LED
- BMS - Building automation system
- VFD -Variable frequency drive for motors
- Modulating valves to control the flow
- Heat exchanger systems for utilizing the waste heat
- Solar system for generating hot water
- Sewerage Treatment Plants - for reuse of water for gardening, Cooling
tower, flushing and cleaning purpose
- Latest energy conservation gadgets
- Technology absorption
In the opinion of the Board, the required particulars pertaining to
technology absorption as per Rule 2 of Companies (Disclosure of
Particulars in the Report of Board of Directors) Rules, 1988 are not
applicable as the hotel forms a part of the service industry and the
company does not have any significant manufacturing operations.
- Foreign Exchange Earnings and Outgo
During the year under review, your Company earned Foreign Exchange
Revenue of Rs. 37.41 Crores (Previous Year Rs.30.87 Crores) and the
Foreign Exchange outgo on account of commission and others is Rs.2.26
Crores (Previous year Rs.0.85 Crores).
Safety and security
Keeping in mind the security threats to the hospitality industry in
India, your Company has stepped up its efforts to ensure an environment
of well being, safety and security for all its guests and co-workers.
Our guest floors as well as all public areas are well equipped with
closed circuit cameras and alarm system. Moreover, guest room doors are
installed with computerized electronic card locking system to enhance
security. Safety deposit lockers have been placed in all rooms to store
valuables. Movement of all vehicles, employees, vendors and guests is
monitored, scanned and electronic data preserved in our archives. An
Emergency Response Team exists in all the hotels, which is always on a
standby mode to respond immediately to any unforeseen emergency in the
hotel.
Trade Mark Case
In a suit filed by Kamat Hotels (India) Limited against the Company for
alleged infringement and passing off of Trade Mark 'the Orchid', a
single Judge of the Hon'ble High Court of Bombay vide its Interim Order
dated 5th April 2011, has allowed our Company to continue with its
existing hotels and business under its Trade Mark but restrained the
use of the same, for any new hotel or line of business. A division
bench of the Bombay High Court has admitted the appeal filed by the
Company against the above interim order and granted a partial stay
allowing the Company to open its new hotel at Vadodara in May 2011. The
appeal is now posted for hearing in July 2011.
Briefly, it is the case of our Company that we are the prior adopter
and user of the mark 'the Orchid' in relation to Hotel Business and
that there has been inordinate delay in filing the suit and
acquiescence by Kamat Hotels, disentitling it to the reliefs claimed.
Directors' Responsibility Statement
Pursuant to the provisions of Section 217(2AA) of the Companies Act,
1956, the Board of Directors, based on the representations received
from the Operations Management, hereby confirms that:
I. In the preparation of the annual accounts forthe year ended 31st
March 2011, the applicable accounting standards have been followed and
that there are no material departures.
ii. It has in the selection of the accounting policies, consulted the
Statutory Auditors and has 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 as at 31 st March 2011
and of the profit of the Company for that period.
iii. It has taken proper and sufficient care forthe 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, to the best of its knowledge
and ability. There are however, inherent limitations, which should be
recognized while relying on any system of internal control and records.
iv. It has prepared the annual accounts forthe year ended 31 st March
2011, 'on a going concern basis'.
Acknowledgments
Your Directors record their sincere thanks for the valuable support
extended by the customers, suppliers, investors, bankers and other
statutory authorities. Your Directors acknowledge with deep
appreciation the dedicated services rendered by the employees of the
Company. Your Directors express their sincere thanks to all the
shareholders for the confidence reposed in the Management and look
forward to their continued support.
For and on behalf of the Board of Directors,
Bangalore,
6th July 2011 Chander K Baljee
Chairman & Managing Director
Mar 31, 2010
We have pleasure in presenting the Twenty Fourth Annual Report of the
Company together with the Audited Accounts for the year ended 31st
March 2010.
Financial Results:
The performance of the Company for the financial year ended 31st March
2010 is summarized below:
(Rs. in Crores)
CONSOLIDATED STANDALONE
Particulars 2009 -10 2008 - 09 2009 -10 2008 - 09
Income from Operations 119.27 140.16 77.83 94.32
Other Income 3.52 3.17 1.14 2.19
Total Income 122.79 143.33 78.97 96.51
Gross Operating Profit 28.82 45.96 19.35 32.38
Interest (7.59) (6.71) (2.41) (1.65)
Depreciation (12.37) (11.09) (5.61) (5.69)
Prior period income --- 1.11 --- 1.11
Profit before Tax 8.86 29.27 11.33 26.15
Provision for Taxation (3.93) (8.13) (3.05) (6.86)
Minority Interest and
Share 2.04 (1.15) ---- ----
of Profit in Associate
Net profit after tax 6.97 19.99 8.28 19.29
Your Company has earned total consolidated revenue of Rs. 122.79 Crores
during the year under review, as against the previous years revenue of
Rs. 143.33 crores, a decrease of 14%. The Net Profit after tax was
lower by Rs. 13.02 Crores as compared to the previous year, mainly due
to reduction in the Total Revenue to the extent of Rs. 20.54 Crores.
The recessionary trends prevailed during a major part of the financial
year 2009-10 and the impact caused by the terror attacks on hotel
properties in Mumbai during the previous year continued its negative
impact on the hospitality industry to a substantial extent and thus,
affected the business performance of your Company.
Dividend
In view of the reduction in the profits and also with an intention to
conserve the resources for the Companys ongoing new hotel projects,
the Board of Directors has recommended not to propose any dividend for
the financial year 2009-10.
Existing Hotels
During the year under review, the Company has completed the renovation
work pertaining to 39 rooms and Lobby at Royal Orchid Galaxy Resort,
Goa and the renovation work for the rest of the rooms is in progress.
The expansion work at Royal Orchid Resort, Bangalore with respect to
Coffee Shop was also completed, during the year. The Company terminated
the operations of Peppermint Hotel at Hyderabad effective 28th February
2010 for business reasons.
New Hotels Opened
Ahmedabad
During the year Royal Orchid Central, Ahmedabad, with 104 rooms,
commenced its operations in December 2009.
Navi Mumbai
Hotel Royal Orchid Central Grazia, Vashi, Navi Mumbai with 67 rooms,
commenced its operations in April 2010.
New Hotel Projects in progress
Jaipur
The construction of the Five Star Hotel with 139 rooms at Jaipur is
progressing well as per plans and the Company has already obtained the
sanction of Long Term Loan of Rs.70 Crores required for the project
from IDBI Bank Limited. The Hotel is likely to commence its operations
in the current financial year.
Hyderabad
The Construction of the Five Star Hotel with 233 rooms at Hyderabad is
progressing well as per plans and the Company has already obtained the
sanction of Long Term Loan of Rs.100 Crores required for the project
from the Consortium of State Bank of Hyderabad, State Bank of India and
State Bank of Mysore. The hotel is likely to commence its operations in
the current financial year.
Upcoming Projects
Mumbai
During the year, the Company has entered into a Joint Venture with
Amartara Hospitality Private Limited, for constructing and operating a
4 star hotel under the brand name, Royal Orchid Central, with 260 rooms
and other facilities, at Powai, Mumbai. The hotel is likely to commence
its operations by 2012.
Shimoga, Hospet & Mussoorie
The Company has already entered into agreements for operating New
Hotels under the brand name, Royal Orchid Central, in Shimoga, Hospet
and Mussoorie, which are likely to commence their operations during the
current financial year.
Business Expansion
Your Company presently controls room inventory of 1,104 through its 13
hotels across 7 major cities in India and has drawn ambitious expansion
plans to add about 1,000 rooms by the end of the next financial year
and to reach the size of 4000 rooms by the year 2015. This will be
achieved by using both organic and inorganic approaches. The Company is
in the process of concluding a few more management contracts for
operating hotels at certain strategic locations, during the current
year.
Subsidiary Companies
During the year under review, Satkar Realities Private Limited,
Ahmedabad had become a wholly owned subsidiary of the Company and the
name of the said Company was subsequently changed as Royal Orchid
Ahmedabad Private Limited.
Your Company has already acquired 64.5% of paid up Equity Capital of
Amartara Hospitality Private Limited, the owner of the land at Powai,
Mumbai.
With the above, your Company has 14 Subsidiary Companies as at the year
ended 31st March 2010 and of which, 11 are wholly owned subsidiaries.
Central Government Approvals
The Company has obtained the required approval from the Central
Government, Ministry of Corporate Affairs (MCA) exempting from
attaching the detailed financial statements of each Subsidiary Company
with this Annual Report, pursuant to the provisions of Section 212(8)
of the Companies Act, 1956 and accordingly, only a Consolidated
Financial Statement is presented with this Annual Report, along with
the Standalone Financial Results of the Company. However, in compliance
with the terms of the said exemption approval of MCA, a statement
showing the relevant details of the Subsidiary Companies is enclosed as
a part of this Annual Report. The annual accounts of the Subsidiary
Companies shall be made available to the interested members at any
time. The company also received the approval of MCA for the
remuneration of Rs. 120 Lacs paid to Managing Director during the
financial year 2009-10 on 21st June 2010.
Awards
During the year, the Hotel Royal Orchid Central, Pune was declared as
winner of the National Tourism Award 2008-09, for the best hotel by the
Ministry of Tourism, Government of India. The Hotel also received the
Golden Star Award, for excellence in food hospitality, service and food
retailing, which is one of the highest honors in the hotel industry.
Directors
The Director Mr. Naresh K Malhotra retires by rotation at the ensuing
Annual General Meeting and being eligible, offers himself for
re-appointment.
Auditors
The Statutory Auditors M/s. Walker, Chandiok & Co., Chartered
Accountants, Bangalore, retire at the ensuing Annual General Meeting
and have confirmed their eligibility and willingness to accept office,
if re-appointed.
Public Deposits
The Company has not accepted any fixed deposits during the year.
Management Discussion and Analysis Report
The Report as required under the Listing Agreements with the Stock
Exchanges is annexed and forms part of the Directors Report.
Corporate Governance
The Report on Corporate Governance along with a Certificate from a
Practicing Company Secretary confirming the Compliance is annexed and
forms part of the Directors Report.
Employees Stock Option Scheme (ESOS)
The details of the ESOS as required under the Securities and Exchange
Board of India (Employees Stock Option Scheme and Employee Stock
Purchase Scheme) Guidelines, 1999 are annexed and form part of the
Directors Report.
Personnel
The details of Employees as required under Section 217 (2A) of the
Companies Act, 1956 read with the Companies (Particulars of Employees)
Rules, 1975 is annexed and forms part of the Directors Report.
Conservation of Energy, Technology Absorption, Foreign Exchange
Earnings and Outgo:
Your Company continues to put in its best efforts to bring in
considerable savings in power consumption and also ensuring optimum
utilisation of available resources. A well documented Standard
Operating Procedure is already in place in this regard and the
operation of the same is closely monitored by the senior management of
the company.
Your Company has been consistently upgrading its technical equipment
with the use of state of the art technologies in most of the functional
areas relating to the operations of the Company. All the Hotels managed
by the Company are well equipped with wi-fi internet connectivity,
offering utmost comforts to its valuable customers.
During the year under review, your Company earned Foreign Exchange of
Rs. 30.87 Crores as against Rs. 47.37 Crores in the previous year. The
outgo on account of commission and others is Rs. 2.56 Crores as against
Rs. 3.09 Crores the previous year.
Directors Responsibility Statement
Pursuant to the provisions of Section 217(2AA) of the Companies Act,
1956, the Board of Directors, based on the representations received
from the Operations Management, hereby confirms that:
I. In the preparation of the annual accounts for the year ended 31st
March 2010, the applicable accounting standards
have been followed and that there are no material departures.
ii. It has in the selection of the accounting policies, consulted the
Statutory Auditors and has 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 as at 31st March 2010
and of the profit of the Company for that period.
iii. It has 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, to the best of its knowledge
and ability. There are however, inherent limitations, which should be
recognized while relying on any system of internal control and records.
iv. It has prepared the annual accounts for the year ended 31st March
2010, on a going concern basis.
Acknowledgments
Your Directors wish to place on record their sincere thanks for the
support extended by the customers, suppliers, investors, bankers,
Central and State Governments and other statutory authorities. Your
Directors acknowledge with appreciation the dedicated services rendered
by the employees of the Company.
Your Directors express their sincere thanks to all the shareholders for
the confidence reposed in the Management and look forward to their
continued support.
For and on behalf of the Board of Directors,
Bangalore,
31st July 2010 Chander K Baljee
Chairman & Managing Director