Mar 31, 2018
Dear Shareholders,
The Board of Directors hereby submits the report of the business and operations of your Company, along with the audited financial statements, for the financial year ended March 31, 2018.
1. Financial Performance
The Companyâs financial performance, for the year ended March 31, 2018 is summarised in below:
Rs. in Lakhs
Particulars |
Standalone Results |
Consolidated Results |
||
FY 2017-18 |
FY 2016-17 |
FY 2017-18 |
FY 2016-17 |
|
Net Sales & Other income |
85,289 |
74,527 |
245,081 |
2,22,585 |
Profit before Taxation |
28,001 |
27,718 |
69,138 |
39,563 |
Provision for Taxation |
10,396 |
9,584 |
22,221 |
17,223 |
Profit After Tax |
17,605 |
18,134 |
46,917 |
22,340 |
Proposed Dividend (inclusive of dividend tax) |
2,140 |
2,162 |
2,140 |
2,162 |
Earnings Per Share (Rs.) |
9.97 |
10.27 |
21.33 |
8.32 |
2. Dividend
The Directors have recommend a Dividend of 20% (Rs.1/-per equity share of Rs.5/- each) to be appropriated from the profits of the financial year ended March 31, 2018, subject to the approval of the shareholders at the ensuing Annual General Meeting. The dividend, if declared as above, would involve an outflow of Rs.17,65,64,890 towards dividend and Rs.3,62,92,913 towards dividend tax, resulting in a total outflow of Rs.21,28,57,803.
The dividend payout has been formulated in accordance with the Companyâs policy to pay sustainable dividend linked to long-term performance, keeping in view the Companyâs need for capital for its growth plans and the intent to finance such plans through internal accruals to the maximum. Pursuant to Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 the said policy is available on Companyâs website at https://www.coxandkings.com/ live/home/Rs.link=investorsrelations&CI_ID=18&CM_ ID=153&CP_ID=447.
3. Material changes affecting the Company
There have been no material changes and commitments affecting the financial position of the Company between the end of the financial year and date of this report. There has been no change in the nature of business of the Company.
4. Overview of financial performance
In FY 2017-18, we focused on growth and managed to grow all our businesses faster than in FY 2016-17 in constant currency terms.
This is testament to our resilience which is achieved by being dynamic and adaptive to changes. Brexit continued to pose a challenge to our UK operations while India business saw receivables increase due to the confusion emanating from the implementation of Goods and Services Tax (GST).
In this backdrop, Cox & Kingsâ consolidated net revenues grew 9.9% yoy in FY 2017-18 more than double the growth of 4.4% in FY 2016-17 as nearly all businesses kept up the momentum. The investments in advertising to grow our India retail business and strengthening the leadership team in Meininger contained EBITDA growth at 4%. But the investments we have made should help us execute our plans to grow our revenues faster or enable us to change our business mix favourably in the next few years.
Leisure - India
FY 2017-18 was a year of major transformational reform, implementation of GST. This preceded by the currency replacement programme led the GDP growth to slow down to 5.7% in 1Q FY 2017-18 after recording 7.1% in FY 2016-17. But we executed well and grew net revenues by 12% y-o-y in FY 2017-18 compared to 9.4% in FY 201617. Since then, India''s GDP growth has bounced back to 7.7% in Q$ FY 2017-18.
Our leadership and strong standing in the B2B segment has given us confidence that we can now pursue market leading growth in the B2C segment. The Outbound segment continued to witness strong growth as air travel became affordable due to cheaper fares driven by competition including from low cost airlines. We believe, with a wide choice of financing, this segment growth can actually accelerate further. The Domestic travel segment is growing rapidly too as connectivity is improving and the online travel booking sites offering a variety of discounts and cash back offers. Factors such as companies realising the importance of offering work-life balance to employees and channel partners, greater appreciation for being taken on a fun filled holiday with colleagues and counterparts as against cash rewards by the recipient, creating long lasting memories thereby increasing association with the host organisation and building camaraderie are driving the MICE segment growth. Business Travel has traditionally been strong for us due to our strong relationships with corporates. Inbound business continued to follow past trends and has grown accordingly.
Leisure - International
In our international leisure operations we saw some stability in UK. Dubai continued to witness strong growth especially in the inbound segment as it continued to attract visitors from their major source markets India, China and Russia. Whilst revenues remained more or less steady, we saw impressive increase in margins, due to which EBITDA grew 15.5% y-o-y, as we continued to reap the benefits of the reorganisation exercise carried out in late FY 2015-16.
The ITB World Travel Trend reported a 6% growth in worldwide outbound travel in 2017, 7.5% growth in the USA, and 5.5% in Europe, 5% in Asia-Pac as well as Latin America. For 2018, it expects growth of 5% with stronger growth in Asia- Pac and Latin America.
Education
The Education division derives most of its business from the UK and hence the uncertainty related with Brexit continued to pose some challenge. But the team executed well and the business recorded a growth of 6.3% y-o-y in gross revenues in FY 2017-18 after declining marginally in FY 2016-17. The growth was led by both PGL as well NST/EST.
Our expansion into Australia has provided us great confidence that this model can be replicated outside of UK. We continue to expand our operations in Australia and will be looking at brownfield expansion in some of our campuses in UK in FY 2018-19.
Meininger
Meiningerâs FY 2017-18 net revenues grew by 26% y-o-y in constant currency terms, the highest it has witnessed in the past five years, on the back of an increase in bed capacity of 25%. But it is aiming to increase its bed count from 10,500 in FY 2017-18 to 25,000 by FY 2021-22. Such exponential increase in capacity would require management bandwidth. Hence, it beefed up its leadership team in FY 2017-18 which led to a significant increase in salary costs. Consequently, EBITDA was stable in FY 2017-18.
Meininger is not only disrupting the traditional hotel industry in Europe with its innovative offerings but is also posing a challenge to the home sharing and hostels segment. The concept of offering a clean, safe and affordable accommodation is being well appreciated by the market and the demand is quite buoyant for such a product.
Others
The visa processing business continued to build on its execution and managed to grown EBITDA to Rs.1,000 Lakhs in FY 2017-18 from a loss of similar amount in FY 2016-17.
5. Other Updates:
I. Credit Rating:
Credit Analysis & Research Ltd (CARE), the Rating Agency, has reaffirmed and enhanced the Commercial Paper issue carved out of sanctioned working capital limit of the Company from the existing Rs.1397 Crore to Rs.2022 Crore as on March 31, 2018. The Rating has been reaffirmed as CARE A1 (A One Plus). Instruments with this rating indicate very strong capacity for timely payment of financial obligations and carry lowest credit risk.
CARE has also reaffirmed and enhanced the long term bank facilities of the Company from existing Rs.1537 Crore to Rs.1787 Crore. The Rating has been reaffirmed as CARE AA (Double A). Instruments with this rating indicate high safety for timely servicing of debt obligations and carry very low credit risk.
Brickworks Rating India Private Limited, the Rating Agency has reaffirmed and enhanced the Commercial Paper issue carved out of sanctioned working capital limit of the Company from the existing Rs.1397 Crore to Rs.2022 Crore as on March 31, 2018. The Rating has been reaffirmed as BWR A1 (BWR A One Plus). Instruments with this rating indicate very strong capacity for timely payment of financial obligations and carry lowest credit risk.
ii. Meininger, Subsidiary of the Company, had signed contracts for opening of new Hotels
- In Lyon: MEININGER hotels and Fonciere des Regions through its Subsidiary Fonciere des Murs, signed an agreement for MEININGER hotel in Lyon, Located on Rue Zimmermann. The 169-room and 580- bed Hotel is expected to open in mid of 2019. This is the fourth joint hotel deal of MEININGER hotels and Fonciere des Regions. The hotel is situated in the vicinity of the city center in the 7th Arrondissement of Lyon near Gare de Lyon Perrache, the second largest railway station of the city, and close to the Rhone.
- In Cologne City Centre Hotel: Cox & Kings owned MEININGER Hotels has transferred the operating lease on its Cologne City Centre Hotel. RHK living Gmbh will be the new sole operator of the property under the brand name SMARTY Cologne City Centre Hotel. MEININGER Cologne City Centre Hotel operated 172 beds. The property contributed about 1.4 Milion Euros in gross revenues and about 0.15 Milion Euros of EBITDA per annum. Cologne remains an important potential location for MEININGER. The MEININGER group is in the process of identifying several potential opportunities to expand in the city.
- In Geneva: MEININGER Hotels signed an agreement for hotel in geneva. The hotel will be located in close proximity to the city center. It will feature 104 rooms and 368 beds and is expected to open in 2020. It will be the second MEININGER project in Switzerland. The hotel group is going to open a hotel in Zurich in 2019.
- In Bordeaux: MEININGER Hotels signed an agreement for opening of a new hotel in Bordeaux. The hotel will be located on Rue du Commerce which closes vicinity to the main train station Bordeaux-St-Jean. The MEININGER Hotel will offer 162 rooms and 493 beds and is expected to open in the first quarter of 2020.
- In Dresden: MEININGER Hotels signed an agreement for opening of a new hotel in Dresden, Germany. The building is located right opposite the central railway station at Wiener Platz 2. The 165 rooms and 639 beds hotels is scheduled to open in the second quarter of 2021. The MEININGER hotel Dresden is in a superb location, adjacent to the central station.
- In Amsterdam: MEININGER Hotels has opened a Second in Amsterdam. The hotel is located directly at Amstel station. The new building is located directly at Amstel station and offers 186 rooms and 806 beds. The MEININGER Hotel Amsterdam Amstel is part of the tallest residential building in the city.
- In Glasgow: MEININGER Hotels has opened a hotel in Glasgow, United Kingdom. The hotel is located on west George Street opposite Queen Street station and will offer 160 rooms and 590 beds. The opening is scheduled for 2020.
iii. Trip 360
- Cox & Kings Ltd has been constantly innovating to bring new and dynamic travel products for its diverse customers. We launched Trip 360 which is an adventure travel vertical that aims to help customers holiday in a sustainable way. With both easy and extreme adventure offerings, Trip 360 has set a benchmark in India in the space of adventure travel, sports and activities.
- Enable Travel: To cater specifically to the disabled travellers and senior citizens, Cox & Kings launched an Accessible Holiday Specialist brand called Enable Travel. Being India''s first Accessible Holiday Specialist, Enable Travel provides travel solutions to travellers across disabilities including Wheelchair Bound, Vision Impaired, Hearing Impaired and Speech Impaired.
iv. Scheme of Arrangement
The Board of Directors of your Company vide resolution dated May 30, 2017, approved the demerger of its foreign exchange division into a separate financial service company, Cox & Kings Financial Service Ltd. (CKFSL) under sections 230 - 232 of the Companies Act, 2013 read with Companies (Compromises, Arrangements and Amalgamations) Rules, 2016. The Company made an application to Stock Exchanges (BSE/ NSE) under Regulation 37 of the SEBI (Listing Obligations and Disclosure Requirements), Regulations, 2015 seeking their approval for the said Scheme of Arrangement. The BSE & NSE approved the said Demerge Scheme vide their letter dated October 31, 2017 & October 30, 2017 respectively.
The Company had filed the petition with National Company Law Tribunal, Mumbai bench (âNCLTâ) under Sections 230 - 232 of the Companies Act, 2013 read with Companies (Compromises, Arrangements and Amalgamations) Rules, 2016. National Company Law Tribunal, Mumbai bench (âNCLTâ) vide its order dated March 26, 2018 (âOrderâ), inter alia, directed the Company to convene and hold a meeting of equity shareholders of the Company for seeking their approval to the Scheme of Arrangement between the Company and Cox & Kings Financial Service Limited and their respective shareholders.
Pursuant to the Order dated March 26, 2018 (âOrderâ) of the Honâble Tribunal, a meeting of the Equity Shareholder of the Company (âMeetingâ) was convened and held at Cultural Hall, 4th Floor, Y. B. Chavan Centre, General Jagannath Bhosle Marg, Near Mantralaya, Nariman Point, Mumbai 400021, Maharashtra on Thursday, May 10, 2018 at 11:00 a.m. (IST) for approving the Scheme of Arrangement
The proposed resolution approving the Scheme was passed with requisite majority by the Equity Shareholders of the Company. The Company has admitted the petition to NCLT and the matter has now been posted for final hearing on August 2, 2018.
v. Delisting of Global Depository Receipts (GDRâs)
Your Company issued the Global Depository Receipts (GDRs) in August, 2010 and the said GDRs were listed on the Luxembourg Stock Exchange (LSE). However, due to the very low numbers of outstanding GDRs, limited liquidly together with the ongoing annual cost /recurring cost, your Board decided to delist the said GDR from Luxembourg Stock Exchange. Accordingly, the GDR programme of the Company got cancelled and the GDRs got delisted from the LSE effective from October 30, 2017.
vi. Sale of stake by Prometheon Enterprise Ltd.
(PEL), Subsidiary of the Company:
In November 2017, Private Equity firm SSG Capital Management through its investee Company acquired 34.42% stake in Prometheon Holdings (UK) Limited (PHUK), step down subsidiary of the Company. The said stake was acquired from Rohatyn Group and Rohatyn Group has now made complete exit from PHUK.
In March 2018 Prometheon Enterprises Ltd (PEL) has sold 14.58% stake in PHUK through various tranche to an investee company of SSG Capital Management. Pursuant to the said stake sale, Cox & Kings Group holds 51% of PHUK through PEL & C&K India while SSG Capital holds 49%.
Holidaybreak houses the brands PGL, NST, EST, Travel Works and Meininger. PGL and NST are leaders in the experiential learning space in the UK and have taken the product to Australia. The business is attracting strong volumes in inbound student traffic from Europe and China. Meininger has evolved as the leader in the high growth hybrid hotel-hostel space and is setting up new hotels at a rapid pace across major cities in Europe.
6. Consolidated Financial Statements
The consolidated financial statements of the Company & its subsidiary & associate which form part of Annual Report have been prepared in accordance with section 129(3) of the Companies Act, 2013. Further, a statement containing the salient features of the Financial Statement of Subsidiary Company & Associate Company in the prescribed format AOC-1 is provided as annexed to this Report. The statement also provides the details of performance and financial position of the Subsidiary Company & Associate Company.
I n accordance with Section 136 of the Companies Act, 2013 the Audited Financial Statements, including the consolidated financial statements & related information of the Company & Audited Accounts of its Subsidiary Company are available on the website www.coxandkings. com.
During the year under review, following companies become the subsidiaries of the Company
1. CandK Tours SDN. BHD.
2. Cox & Kings Travel Limited, Hong Kong
3. Cox and Kings Global Services, Qatar
7. Directorsâ Responsibility Statement
The Board of Directors acknowledge the responsibility for ensuing compliances with the provisions of Section 134(3)(c) read with Section 134(5) of the Companies Act, 2013 in the preparation of annual accounts for period ended on March 31, 2018 and state that:
(a) In the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;
(b) the directors had 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 and loss of the Company for that period;
(c) The directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
(d) The directors had prepared the annual accounts on a going concern basis; and
(e) The directors, had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively.
(f) The directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
8. Directors and Key Managerial Personnel
As per the provisions of the Companies Act, 2013, Mr. Anthony Bruton Meyrick Good retires by rotation at the ensuing AGM and, being eligible, seeks reappointment.
Your Board is of the opinion that continued association with Mr. Anthony Bruton Meyrick Good with the Company will be of immense benefit to your Company and, therefore, recommends his reappointment.
In terms of Section 102 of the Companies Act 2013, Regulation 36 of the SEBI (Listing Obligation and Disclosure Requirements (Regulations) 2015, and the Secretarial Standards on the General Meetings issued by the Institute of Company Secretaries of India, brief profile of Mr. Anthony Bruton Meyrick Good have been annexed to the Notice convening the Annual General Meeting of the Company and the same forms an part of this Annual Report.
The term of office of Mr. Mahalinga Narayanan, Mr. Subhash Chandra Bhargava and Mr. Pesi Patel as Independent Directors, will expire on March 31, 2019.
The Board of Directors, on recommendation of Nomination and Remuneration Committee has recommended reappointment of above Directors, as an Independent Director of the Company for a second term of 5 (five) consecutive years on the expiry of their current term of office.
The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence prescribed under the Act and Listing Regulations.
Nomination and Remuneration Policy for Directors, Key Managerial Personnel and other employees is available at the website of the Company at https://www.coxandkings. com/live/home/Rs.link=investorsrelations&CI_ID=18&CM_ ID=153&CP_ID=447
Ms Urrshila Kerkar, Executive Director, Mr. Anil Khandelwal, Chief Financial Officer and Ms. Rashmi Jain, Company Secretary were appointed as the Key Managerial personal for your Company. In accordance with the provision of section 203 of the Companies Act, 2013 and there is no change in the same during the year under review
9. Disclosure Related to Board, Committee and Policies
Board Meetings: The Board met 5 times during the financial year. The meeting details are provided in the Corporate Governance report that forms part of this Annual Report. The maximum interval between any two meetings did not exceed 120 days, as prescribed in the Companies Act, 2013.
Board Evaluation: The Board of Directors has carried out an annual evaluation of its own performance, board committees, and individual directors pursuant to the provisions of the Act and the corporate governance requirements as prescribed by the Securities and Exchange Board of India (Listing Obligation and Disclosure Requirements), Regulations 2015 (âSEBI Listing Regulationsâ).
The performance of the board was evaluated by the board after seeking inputs from all the directors on the basis of criteria such as the board composition and structure, effectiveness of board processes, information and functioning, etc. as provided by the Guidance Note on Board Evaluation issued by the Securities and Exchange Board of India on January 5, 2017.
The performance of the committees was evaluated by the board after seeking inputs from the committee members on the basis of criteria such as the composition of committees, effectiveness of committee meetings, etc.
The Board and the Nomination and Remuneration Committee reviewed the performance of individual directors on the basis of criteria such as the contribution of the individual director to the board and committee meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings, etc.
In a separate meeting of independent directors, performance of non-independent directors and the board as a whole was evaluated, taking into account the views of executive directors and non-executive directors. The same was discussed in the board meeting that followed the meeting of the independent directors, at which performance of the board, its committees and individual directors was also discussed. Performance evaluation of independent directors was done by the entire board, excluding the independent director being evaluated.
Board Committees: As on March 31, 2018, the Board has seven committees: the Audit Committee, the Stakeholders Relationship Committee, the Nomination and Remuneration Committee, the Corporate Social Responsibility and Governance Committee, the Risk management Committee and Finance Committee. A detailed note on the composition of the Board and its committees is provided in the corporate governance report section of this Annual Report
Familiarisation Programme: To familiarise the new directors with the strategy, operation and functions of the Company, the Company make presentations to the new directors about the Companyâs strategy, operations, product and service offering, market, organisation structure, finance, human resources, technology, quality, facilities and risk management. The details of programmes for familiarisation of Independent Directors with the Company, their roles, rights, responsibilities in the Company, nature of the industry in which the Company operates, business model of the Company and related matters are put up on the website of the Company at the link: http://www.coxandkings.com/downloads/investor-relations/familiarisation-programme-for-independent-directors.pdf.
Board diversity: Your Company recognises and embraces the importance of a diverse board in its success. We believe that a truly diverse Board will leverage difference in thoughts, perspective, knowledge, skill, regional and industry experience, cultural and geographical background, age ethnicity and gender which will help us retain our competitive advantages. The Board has adopted the Board Diversity Policy which set out the approach to diversity of the Board of Directors. The Board Diversity Policy is available on website of the Company at the link: http://www.coxandkings.com/downloads/ investor-relations/board-diversity-policy.pdf.
Company policy on Directors Appointment and Remuneration: The Company has in place Nomination & Remuneration Committee in accordance with the requirements of the Companies Act, 2013 read with rules made thereunder and Regulation 19 of SEBI (Listing Obligations & Disclosure Requirements) Regulation, 2015. The policy of the Company on directorsâ appointment and remuneration, including the criteria for determining qualifications, positive attributes, independence of a director and other matters, as required under subsection (3) of Section 178 of the Companies Act, 2013, is available on our website at https://www.coxandkings. com/live/home/Rs.link=investorsrelations&CI_ID=18&CM_ ID=153&CP_ID=447.
There has been no change in the policy since last fiscal. We affirm that the remuneration paid to the directors is as per the terms laid out in the Nomination and Remuneration Policy of the Company.
10. Auditors And Auditors Report
M/s. D T S & Associates, Chartered Accountants were appointed as Auditors of the Company, for a term of 5 (five) consecutive years, at the Annual General Meeting held on September 21, 2017. They have confirmed that they are not disqualified from continuing as Auditors of the Company.
The Notes on financial statement referred to in the Auditorsâ Report are self-explanatory and do not call for any further comments. The Auditorsâ Report does not contain any qualification, reservation, adverse remark or disclaimer. The auditorsâ certificate on corporate governance is enclosed with the Corporate Governance Report.
11. Secretarial Audit Report
As required under Section 204 of the Companies Act, 2013 and Rules thereunder, the Board has appointed Mr. Virendra Bhatt, Practicing Company Secretary, to conduct Secretarial Audit of the Company for financial year 2017-18. The Secretarial Audit Report for the financial year ended March 31, 2018 is annexed herewith as Annexure I to this Report. The Secretarial audit Report does not contain any qualification or adverse remark.
12. Fixed Deposits
Your Company has not accepted any fixed deposits within the meaning of Section 73 of the Companies Act, 2013 read with Companies (Acceptance of Deposits) Rules, 2014 during the year.
13. Managementâs Discussion and Analysis Report
The Managementâs Discussion and Analysis on Companyâs performance - industry trends and other material changes with respect to the Company and its subsidiaries pursuant to Regulation 34 (2) of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 is presented in a separate section forming part of the Annual Report.
14. Corporate Governance
The Company is committed to maintain the highest standards of Corporate Governance and adhere to the Corporate Governance requirements set out by SEBI. The Report on Corporate Governance as stipulated under Regulation 17 to 27 of SEBI (Listing Obligations and Disclosure Requirements) Regulation, 2015 forms part of the Report.
15. Corporate Social Responsibility
I t is your Company''s intent to make a positive difference to society. As its operations have expanded to new geographies, your Company has retained a collective focus on various areas of CSR that impact the environment, people and their health and society at large. In particular, the Company focuses its efforts on promotion of education, promotion of gender equality and empowering women, improving health especially amongst children, Ensuring environmental sustainability and Animal Welfare. The CSR Policy may be accessed on the Companyâs website at https://www.coxandkings. com/live/home/Rs.link=investorsrelations&CI_ID=18&CM_ ID=153&CP_ID=447
Detailed information on the initiative of the Company towards CSR activities is provided as Annexure II to the Director Report.
16. Extract of Annual Return
I n accordance with Section 134(3)(a) of the Companies Act, 2013, an extract of the annual return in the prescribed format is appended as Annexure III to the Boardâs Report.
17. Secretarial Standards
The Directors state that applicable Secretarial Standards, i.e. SS-1 and SS-2, relating to âMeetings of the Board of Directorsâ and âGeneral Meetingsâ respectively, have been duly followed by the Company.
18. Business Responsibility Reporting
As stipulated under the Listing Regulations, the Business Responsibility Report describing the initiatives taken by the Company from an environmental, social and governance perspective is attached as a part of the Annual Report.
19. Particulars of contracts & arrangements made with related parties
All contracts/arrangements/ transactions with related parties are placed before the Audit Committee and also the Board for approval. Prior omnibus approval of the Audit Committee and the Board is obtained for the transactions which are foreseen and repetitive nature. All contracts / arrangements / transactions entered by the Company during the financial year with related parties were in the ordinary course of business and on an armâs length basis. During the year, the Company had not entered into any contract / arrangement / transaction with related parties which could be considered material in accordance with the policy of the Company on materiality of related party transactions. Accordingly, no transactions are being reported in Form AOC-2 in terms of Section 134 of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014. However, the details of the transactions with Related Party are provided in the Companyâs financial statements in accordance with the Accounting Standards.
The Policy on materiality of related party transactions and dealing with related party transactions as approved by the Board may be accessed on the Companyâs website at the link: http://www.coxandkings.com/downloads/ investor-relations/policy-on-related-party-transaction.pdf
Your Directors draw attention of the members to Note 29 to the financial statement which sets out related party disclosures.
20. Particulars of Loans Given, Investments Made, Guarantees Given and Securities Provided
Particulars of loans given, investments made, guarantees given and securities provided along with the purpose for which the loan or guarantee or security is proposed to be utilised by the recipient are provided in the standalone financial statement (Please refer to Note 31 to the standalone financial statement).
21. Risk Management Policy
Your Company has an elaborated Risk Management procedure and adopted systematic approach to mitigate risk associated with accomplishment of objectives, operations, revenues and regulations. Your Company believes that this would ensure mitigating steps proactively and help to achieve stated objectives. The entityâs objectives can be viewed in the context of four categories Strategic, Operations, Reporting and Compliance. We consider activities at all levels of the organisation, viz Enterprise level, Division level, Business unit level and Subsidiary level, in Risk Management framework. The Risk Management process of the Company focuses on three elements, viz. (1) Risk Assessment; (2) Risk Management; (3) Risk Monitoring.
A Risk Management Committee is constituted which has been entrusted with the responsibility to assist the Board in (a) Overseeing and approving the Companyâs enterprise wide risk management framework; and (b) Overseeing that all the risk that the organisation faces.
The key risks and mitigating actions are also placed before the Audit Committee of the Company. Significant audit observations and follow up actions thereon are reported to the Audit Committee. The Audit Committee reviews adequacy and effectiveness of the Companyâs internal control environment and monitors the implementation of audit recommendations, including those relating to strengthening of the Companyâs risk management policies and systems
The Policy on Risk Management as approved by the Board may be accessed on the Companyâs website at the link: http://www.coxandkings.com/downloads/investor-relations/risk-management-policy.pdf
22. Vigil Mechanism/ Whistleblower Policy
Vigil Mechanism Policy for Directors and employees of the Company is constituted, to provide a mechanism which ensures adequate safeguards to employees and Directors from any victimisation on rising of concerns of any violations of legal or regulatory requirements, incorrect or misrepresentation of any, financial statements and reports, etc. The vigil mechanism/whistle blower policy may be accessed on the Companyâs website at the link http://www.coxandkings.com/downloads/investor-relations/whistleblower-policy.pdf
There has been no change to the policy during the fiscal year 2018.
23. Disclosure Under Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013
Your Company is committed to provide a safe and secure environment to its women employees across its functions and other women stakeholders, as they are considered as integral and important part of the organisation. Your Company has in place an Sexual Harassment Policy in line with the requirements of the Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. An Sexual Harassment Redressal Cell has been set up as per the statutory requirements, to redress complaints regarding sexual harassment. The policy has set guidelines on the redressal and enquiry process that is to be followed by complainants and ICC, whilst dealing with issues related to sexual harassment at the work place. All women employees (permanent, temporary, contractual and trainees) are covered under this policy. Your Company has not received any complaint during the year.
24. Internal Financial Controls
The Company has in place Internal Financial Control system, commensurate with size & complexity of its operations to ensure proper recording of financial and operational information & compliance of various internal controls & other regulatory & statutory compliances. During the year under review, no material or serious observation has been received from the Internal Auditors of the Company for inefficiency or inadequacy of such controls.
Internal Auditorsâ comprising of professional Chartered Accountants monitor & evaluate the efficacy of Internal Financial Control system in the Company, its compliance with operating system, accounting procedures & policies at all the locations of the Company. Based on their report of Internal Audit function, corrective actions in the respective area are undertaken & controls are strengthened. Significant audit observations & corrective action suggested are presented to the Audit Committee.
25. Particulars of Employees and Related Disclosures
The information required under section 197 of the Act read with rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given below.
a. The ratio of remuneration of each director to the median remuneration of the employees of the Company for the financial year:
Executive Director |
Ratio to median remuneration |
Ms. Urrshila Kerkar |
62.59% |
Non Executive Director |
Ratio to median remuneration |
Mr. A.B.M. Good |
0.65% |
Mr. Ajay Ajit Peter Kerkar |
0.57% |
Mr. Pesi Patel |
2.10% |
Mr. S. C. Bhargava |
2.12% |
Mr. M Narayanan |
2.08% |
b. The percentage increase in remuneration of each director, chief financial officer, company secretary in the financial year:
Directors, Chief Financial Officer & Company Secretary |
% increase in remuneration in the financial year |
Mr. A.B.M Good |
52% |
Mr. Ajay Ajit Peter Kerkar |
133% |
Ms Urrshila Kerkar |
23% |
Mr. Pesi Patel |
14% |
Mr. S.C. Bhargava |
7% |
Mr. M Narayanan |
6% |
Mr. Anil Khandelwal (Chief Financial Officer) |
10% |
Ms Rashmi Jain (Company Secretary) |
10% |
c. The percentage increase in the median remuneration of employees in the financial year:
9%
d. The number of permanent employees on the rolls of company: 2523
e. Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration:
The average annual increase was around 12%. However, during the course of the year, the total increase is approximately 11%, after accounting for promotions and other event based compensation revisions.
Increase in the managerial remuneration for the year was 12%
f. The key parameters for any variable component of remuneration availed by the directors:
The remuneration to Whole Time Director involves balance between fixed and variable pay reflecting short and long term performance objective appropriate to the workings of the Company and its goals.
The remuneration to Non-Executive Directors involves sitting fees for attending meeting of the Board and Committees and commission based on the approval of the Members.
g. Affirmation that the remuneration is as per the remuneration policy of the Company:
The Company affirms remuneration is as per the remuneration policy of the Company.
h. The statement containing particulars of employees as required under section 197 (12) of the Act read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is provided in a separate annexure forming part of this report. Further, the report and the accounts are being sent to the members excluding the aforesaid annexure. In terms of section 136 of the Act, the said annexure is open for inspection at the Registered Office of the Company. Any shareholder interested in obtaining a copy of the same may write to the Company Secretary.
26. Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo
The Company has no activity relating to conversation of energy or technology absorption. The Company continued to be a net foreign exchange earner during the year.
The figures for the foreign exchange earnings and outgo are as follows:
Foreign Exchange Earnings: f 19,011 Lakhs (Previous Year- Rs.16,024 Lakhs)
Foreign Exchange Outgo: Rs.755 Lakhs (Previous Year- Rs.834 Lakhs)
(Other than in the normal course of the business as Tour Operator and Foreign Exchange Restricted Authorised Dealer)
27. Awards and Recognition India - FY 2017-18
1 Amazing Thailand Award 2018 for Innovative Product
2 SATTE Awards 2018 for Best Outbound Tour Operator
3 Conde Nast Traveller India Readers'' Travel Awards 2017 for Indiaâs favourite Tour Operator_
4 Hospitality India Awards for Best Domestic Tour Operator
5 Hospitality India Awards for Best Outbound Tour Operator
6 Outlook Traveller Award 2017 for Best Outbound Tour Operator_
7 Travel Leisure Awards 2017 for Best Luxury Travel Curator_
8 World Travel Award for Indiaâs Leading Tour Operator
9 World Travel Award for Indiaâs Leading Travel Agency
10 World Travel Award for Asiaâs Leading Luxury Tour Operator
Subsidiaries - FY 2017-18
PGL
- Runners up in the School Travel Awards âBest Adventure Experienceâ
(The School Travel Awards recognise the best attractions, destinations, companies and practitioners in the field of educational travel and learning outside the classroom (LOtC)).
NST
- Feefo Gold Standard Trusted Service Award 2018. Awarded to companies that consistently score 4.5 and above out of 5 on the customer referral platform.
- British Youth Travel Awards - Best Support Service Award winner 2017. The awards recognise the best suppliers in the industry.
- Continued to be accredited to Quality Management ISO 9001 - 2008 and Environmental Management ISO 14001-2004
28. General
Your Directors state that no disclosure or reporting is required in respect of the following matters as there were no transactions on these items during the year under review.
- Details relating to deposits covered under Chapter V of the Act.
- Issue of equity shares with differential rights as to dividend, voting or otherwise.
- Issue of shares (including sweat equity shares) to employees of the Company under any scheme save and except Employeesâ Stock Options Plan referred to in this Report.
- The Company does not have any scheme of provision of money for the purchase of its own shares by employees or by trustees for the benefit of employees.
- Neither the Managing Director nor the Whole-time Directors of the Company receive any remuneration or commission from any of its subsidiaries.
- No fraud has been reported by the Auditors to the Audit Committee or the Board.
29. Acknowledgements and Appreciation
Your Directors take this opportunity to thank all investors, customers, vendors, banks/financial institutions, regulatory and government authorities and Stock Exchanges for their consistent support and encouragement to the Company. The Directors also place on record their sincere appreciation to all employees of the Company for their hard work, dedication and commitment. The enthusiasm and unstinting efforts of the employees have enabled the Company to remain at the forefront of the Industry.
For and on behalf of the Board of Directors
Place: Mumbai ABM Good
Date: May 28, 2018 Chairman
Mar 31, 2017
Dear Shareholders,
The Directors are pleased to present the Seventy Seventh Annual Report of your Company together with Audited Financial Statements for the financial year ended March 31, 2017.
The consolidated financial statements for the year ended March 31, 2017 have been prepared in accordance with the Ind AS. Accordingly, all the financial information for the year ended and as at March 31, 2016, has been restated on conform to Ind AS in this report.
1. FINANCIAL PERFORMANCE
The company''s financial performance, for the year ended March 31, 2017 is summarized below:
(Rs,in lakhs)
Particulars |
Standalone Results |
Consolidated Results |
||
2016-17 |
2015-16* |
2016-17 |
2015-16* |
|
Net Sales & Other income |
74,527 |
67,360 |
2,22,585 |
2,48,905 |
Profit before Taxation |
27,718 |
25,350 |
39,563 |
14,873 |
Provision for Taxation |
9,584 |
8,812 |
17,223 |
15,671 |
Profit After Tax |
18,134 |
16,538 |
22,340 |
(798) |
Proposed Dividend (inclusive of dividend tax) |
2,162 |
2,038 |
2,162 |
2,038 |
Earnings Per Share (Rs, |
10.27 |
9.36 |
8.32 |
2.92 |
* Figures changed for F.Y. 2015-16 according to Ind AS 2 DIVIDEND
The Directors are pleased to recommend a Dividend of 20% (Rs,1/- per equity share of Rs,5/- each) to be appropriated from the profits of the financial year ended March 31, 2017, subject to the approval of the shareholders at the ensuing Annual General Meeting. The Dividend will be paid in compliance with applicable regulations. The dividend, if declared as above, would involve an outflow of Rs,1765.65 Lakhs towards dividend and Rs,369.46 Lakhs towards dividend tax, resulting in a total outflow of Rs,2162.11 Lakhs.
The dividend will be paid to members whose names appear in the Register of Members as on September 15, 2017. In respect of shares held in dematerialized form, it will be paid to members whose names are furnished by National Securities Depository Limited and Central Depository Services (India) Limited, as beneficial owners as on that date. The dividend payout for the year under review has been formulated in accordance with the Company''s policy to pay sustainable dividend linked to long-term performance, keeping in view the Company''s need for capital for its growth plans and the intent to finance such plans through internal accruals to the maximum.
3. OVERVIEW OF FINANCIAL PERFORMANCE
In FY17, Cox & Kings Ltd has built upon its core strengths, focused on quality of growth and continued on its journey of unlocking value. The company is focused on businesses in which it is dominant and has further increased its market-leading position across divisions. The year presented several challenges such as Brexit, terrorist attacks in some key geographies such as Brussels and London, and political rumblings in Europe and the US. Back in India, the government''s demonetization programme and finalization of the Goods and Services Tax (GST) led to significant volatility in the business environment. Cox & Kings successfully steered through all of these challenges and has emerged with higher margins and a leaner balance sheet.
Cox & Kings'' net revenues and EBITDA from continuing operations grew by 4% and 5% respectively in FY17, despite the translationary impact of the 9% depreciation of the pound sterling versus the rupee year over year (a substantial proportion of the company''s net revenues and EBITDA are denominated in pound sterling).
As part of the company''s value unlocking focus, the board approved the demerger of the highly profitable Foreign Exchange division (which falls under Leisure - India) in June 2017. Cox & Kings will retain a 19% stake in the demerged entity, which will be christened Cox & Kings Financial Service Ltd. (CKFSL). The balance 81% will be distributed to Cox & Kings'' shareholders pro-rata. The foreign exchange division will act as a springboard for CKFSL to pursue its own, independent high-growth strategy. CKFSL will be applying for an NBFC license and will commence new financial product lines related to the travel sector. The scale of the lending opportunity within the travel sphere is outsized and fast-growing and CKFSL will be in pole position to tap into that growth.
The company''s continued efforts to reduce debt were visible with gross debt reducing by Rs,42,705 lakhs to Rs,367,389 lakhs as of March 31, 2017. Net debt to equity ratio now stands at a low 0.6x.
Leisure - India
Leisure - India faced multiple challenges in FY17, including demonetization, heightened competitive activity, introduction of biometrics for Schengen countries prior to peak season, depreciation of the rupee prior to peak season, and finalization of GST. Despite all these factors, Leisure - India''s net revenues grew by 9% and EBITDA grew by 11% y-o-y in FY17, much above peers. EBITDA margins expanded despite an environment of severe price competition, especially from online players.
Today Cox & Kings maintains a high-quality network of 13 own stores, 156 franchisees and 89 preferred sales agents. In addition, the company has Business Travel implants at client companies across the country and Foreign Exchange specialists across each of its operating locations, giving it an edge in terms of distribution.
The company''s Outbound packaged holidays business continued to demonstrate strong growth as the trend of holidaying overseas is gaining prominence. Greater connectivity, better affordability, change in lifestyle habits and easy financing presents a robust outlook for the outbound travel segment in India. Domestic travel continued to be a fast-growing segment. The domestic tourism boom continues as the trend of frequent short vacations is catching on, apart from an increase in penetration. Meetings, Incentives, Conferences and Events (MICE) as a segment is also growing rapidly due to the company''s strong service quality in the B2B segment. Business Travel (BT) grew substantially in FY17 due to the company''s dedicated sales force which ensure customized flexible solutions to its corporate customers. Inbound travel witnessed strong growth in FY17, while Foreign exchange division grew quite substantially.
Leisure - International
Leisure International operations are spread across Dubai, UK, US, Australia and Japan. Leisure - International net revenues from continuing operations grew by 2% y-o-y in FY17, while EBITDA declined by 9% to Rs,168 crores. Profitability was mainly impacted by declining consumer confidence in the UK due to Brexit and the impact of the weak pound sterling against other currencies, which curtailed consumers'' travel budgets there. However, margins improved substantially in FY17 pursuant to the reorganization exercise in late FY16. C&K Dubai performed very strongly in FY17 and now constitutes nearly half of Leisure - International''s EBITDA.
The outlook for global travel remains robust. ITB World Travel Trend reported a 3.9% growth in worldwide outbound travel in 2016, led by 11% growth in Asia, 7% in the USA, and 2.5% in Europe. For 2017, WTTC expects higher growth of 4-5% with stronger growth from Europe and continued growth in Asia and USA.
Education
Education was faced with multiple challenges in FY17, including Brexit and the consequent decline in consumer confidence, the impact of higher minimum National-Living-Wage costs which could not be passed on immediately, numerous terrorist incidents in Europe which impacted travel sentiment, and adverse geopolitical rumblings in Europe and the UK through the year. Despite all these factors, Education division EBITDA in pound sterling terms rose by 2% y-o-y in FY17 on rising bed capacity and higher occupancy.
Cox and Kings remains a world leader in experiential learning or outdoor learning. The company''s brands are market leaders in the UK which has among the most developed education systems in the world. The division caters to both primary school students as well as secondary school students, with brands PGL and NST having become household names in the UK. The company has successfully expanded into Australia, which offers high potential due to similar preferences for outdoor learning over classroom learning as in the UK.
Meininger
Meininger was faced with a challenging geopolitical environment in Europe along with stagnant growth across the continent and numerous terrorist incidents, including the Brussels airport attack (Meininger''s Brussels property accounted for about 10% of bed capacity in FY17). In the face of significant odds, Meininger overall recorded 5% growth y-o-y in EBITDA in euro terms in FY17 on rising bed occupancy and operating leverage.
Meininger Brussels itself saw a sharp bounce-back in bed occupancy over the year, which is testimony to the core strength of the Meininger business model. Meininger''s full-year bed occupancy touched an all-time high of 76.8% in FY17.
The division added 1,700 beds, or 25% additional bed capacity, within a three-month period, which boosted total bed capacity to 8,553 as of March 31, 2017.
Meininger''s low capital intensity and remarkable resilience gives the company tremendous confidence to embark on an aggressive expansion plans over the next two years. The company is aiming to increase bed capacity to more than
15,000 beds by the end of FY19.
Others
Our visa processing services business (CKGS) turned around in FY17 on the back of better fixed-cost absorption owing to higher revenues as well as tight cost control.
4. OTHER UPDATES:
i. Allotment of 72, 50,000 equity shares upon conversion of convertible warrants
The Company had, pursuant to Board and Shareholders'' approvals and other statutory and regulatory approvals, issued and allotted 72,50,000 convertible preferential warrants to its Promoter group entity, Stand ford Trading Private Limited on January 06, 2015 at an issue price of Rs,309.82 per equity share. 25% of the issue price was paid on allotment of warrants in January 2015.
The Promoter group entity, Stand ford Trading Private Limited, applied for conversion of 72,50,000 warrants into equity shares and have paid balance 75%, i.e. Rs,309.82 per equity share aggregating Rs,1,68,46,46,250 on May 24, 2016.
The Company, accordingly allotted 72,50,000 equity shares of Rs,5/- each to Standford Trading Private Limited.
Post allotment, the paid up capital of the Company has increased to Rs,882,824,450 divided into 176,564,890 equity shares of face value Rs,5 each. The new equity shares issued rank pari-passu with the existing equity shares.
ii. CREDIT RATING:
Credit Analysis & Research Ltd (CARE), the Rating Agency, has reaffirmed and enhanced the Commercial Paper issue carved out of sanctioned working capital limit of the Company from the existing Rs,1082 Crores to Rs,1122 Crores. The Rating has been reaffirmed as CARE A1 (A One Plus). Instruments with this rating indicate very strong capacity for timely payment of financial obligations and carry lowest credit risk.
CARE has also reaffirmed and enhanced the long term bank facilities of the Company from existing Rs,1206 Crores to ''1246 Crores. The Rating has been reaffirmed as CARE AA (Double A). Instruments with this rating indicate high safety for timely servicing of debt obligations and carry very low credit risk.
iii. During the year, Meininger, Subsidiary of the Company, had signed contracts for opening of new Hotels
In Amsterdam City West: MEININGER hotel group signed an agreement for the third expansion phase of its Amsterdam City West hotel. It has an excellent strategic location, near Sloterdijk railway station, one of Amsterdam''s most important transport hubs. The hotel is only a five-minute S-Bahn ride from the city centre and Schiphol Airport is 10 minutes away.
In Brussels: MEININGER Hotels signed a lease contract with Nelson Canal for a hotel in Brussels. The hotel will be located on Rue Bara 101 close to the main railway station in Brussels. The hotel is expected to open in the fourth quarter of 2018 and will be Meininger''s second hotel in Brussels.
In Heidelberg: MEININGER Hotels and Hirotani Projektgesellschaft mbH have signed a contract for a new hotel in Heidelberg, Germany. The hotel will be located at the Carl-Benz-street 4-6 close to the central station. The opening of the first MEININGER hotel in Heidelberg is planned for the beginning of 2019 with a lease term of 20 years.
In Milan: MEININGER Hotels and leading Italian property company Beni Stabili SIIQ have signed an agreement for a hotel in Milan. The building is situated at Piazza Monte Titano in front of the Lambrate railway station. The MEININGER Hotel in Milan is going to be the second of the group in Italy. MEININGER will be opening a hotel in Rome next year.
In Russia: MEININGER Hotels signed a management contract with VIY Management for a hotel in Saint Petersburg. The hotel will be situated in Nikolskie ryady indoor market hall located on 62 Sadovaya Street in the Admiralteysky district.
IN Zurich: MEININGER Hotels and Losinger Marazzi AG have signed a contract for a MEININGER Hotel in Zurich. The hotel is going to be built at the south end of the city in the new Greencity district. The hotel is expected to open at the end of 2019. It will be the first hotel of the MEININGER Group in Switzerland.
iv. Opening of new Hotels by Meininger, Subsidiary of the Company
In Leipzig: Meininger Hotels has opened a hotel in close proximity to Leipzig''s main station. The hotel is located in the centre of Leipzig and is the perfect starting point from which to explore the city.
Urban House Copenhagen becomes a MEININGER Hotel: MEININGER Hotels and Pandox AB signed a lease agreement for a hotel in Copenhagen. The Urban House Copenhagen is located in the hip and vibrant district of Vesterbro, which is popular among young and creative people because of its numerous cafes, wine bars, restaurants, clubs and galleries.
v. Roll Out of GST Model Law
In view of impending roll out of GST with effect from July 1, 2017, the Company is gearing up to get itself to the tune of the new GST framework which will not only lead to change in the indirect tax structure but shall also lead to change in the business process/function. The Company had already obtained the provisional registration in respect of all its branches across the country. It has also started creating awareness amongst the teams of various segments, its vendors and customers. The Company is also in the process of drawing implementation plan to get fully prepared & equipped under new regime.
5. CONSOLIDATED FINANCIAL STATEMENTS
The consolidated financial statements of the company & its subsidiary & associate which form part of Annual Report have been prepared in accordance with section 129 (3) of the Companies Act, 2013. Further, a statement containing the salient features of the Financial Statement of Subsidiary Company & Associate Company in the prescribed format AOC-1 is provided as annexed to this Report. The statement also provides the details of performance and financial position of the Subsidiary Company & Associate Company.
In accordance with Section 136 of the Companies Act, 2013 the Audited Financial Statements, including the consolidated financial statements & related information of the Company & Audited Accounts of its Subsidiary Company are available on the website www.coxandkings.com.
During the Year under review, following company''s become the subsidiaries of the Company
Meininger Hotel Paris Porte de Vincennes SAS |
Meininger Hotel Russia Limited |
Meininger Hotels (India) Private Limited |
Meininger Hotel Zurich AG |
Meininger Hotel Milan Lambrate SRL |
Meininger Hotel Copenhagen ApS |
Meininger Hotel Brussels Midi Station SA |
Meininger Hotel Milan City SRL |
Meininger Hotel Lyon SAS |
Meininger Hotel Genf AG |
Cox & Kings Global Services Private Limited, UK |
Cox & Kings Financial Service Limited (formerly known as Cox & Kings Financial Services Limited) |
6. DIRECTORS'' RESPONSIBILITY STATEMENT
The Board of Directors acknowledge the responsibility for ensuing compliances with the provisions of
Section 134(3)(c) read with Section 134(5) of the Companies Act, 2013 in the preparation of annual accounts for period
ended on March 31, 2017 and state that:
(a) In the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;
(b) the directors had 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 and loss of the company for that period;
(c) The directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;
(d) The directors had prepared the annual accounts on a going concern basis; and
(e) The directors, had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively.
(f) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
7. DIRECTORS AND KEY MANAGERIAL PERSONNEL
Ms. Urrshila Kerkar, Whole Time Director, was appointed for a period of 5 years with effect from August 31, 2012, in terms of shareholders approval obtained at the Seventy Second Annual General Meeting held on September 22, 2012 and accordingly her office term expiry on August 30, 2017. Your Board at its meeting held on May 29, 2017, in accordance with section 196, 203 and applicable provisions of the Companies Act 2013 and Schedule V thereto read with rules framed thereunder, re appointed Ms Urrshila Kerkar as the Whole Time Director of the Company with revised remuneration for a period of five consecutive years with effect from August 31, 2017 subject to approval of the Members of the Company at the ensuing Annual General Meeting.
Mr. Ajay Ajit Peter Kerkar, Director of the Company retires by rotation at the forthcoming Annual General Meeting in accordance with provisions of the Companies Act, 2013 and the Articles of Association of the Company and being eligible, offers himself for re-appointment.
Your Board is of the opinion that continued association with Ms. Urrshila Kerkar and Mr. Ajay Ajit Peter Kerkar with the Company will be of immense benefit to your company and, therefore, recommends their reappointment.
In terms of Section 102 of the Companies Act 2013, Regulation 36 of the SEBI (Listing Obligation and Disclosure Requirements ( Regulations) 2015, and the Secretarial Standards on the General Meetings issued by the Institute of Company Secretaries of India, brief profiles of Mr. Ajay Ajit Peter Kerkar and Urrshila Kerkar have been annexed to the Notice convening the Annual General Meeting of the Company and the same forms an part of this Annual Report.
The Company has also received declarations from all the Independent Directors of the Company confirming that they meet with the criteria of the independence as prescribe both under section 149(6) of the Companies Act, 2013 and under Regulation 16 (1)(b) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
In accordance with the provisions of the Companies Act, 2013, none of the Independent Directors are liable to retire by rotation.
Ms. Urrshila Kerkar, Executive Director, Mr. Anil Khandelwal, Chief Financial Officer and Ms. Rashmi Jain, Company Secretary were appointed as the Key Managerial personnel for your Company. In accordance with the provision of section 203 of the Companies Act, 2013 and there is no change in the same during the year under review.
8. DISCLOSURE RELATED TO BOARD, COMMITTEE AND POLICIES
Board Meetings: Five meetings of the Board of Directors were held during the year in accordance with the provisions of Companies Act 2013 and rules made there under. The details thereof are given in the Corporate Governance Report.
Board Evaluation: The Board of Directors has carried out an annual evaluation of its own performance, board committees, and individual directors pursuant to the provisions of the Act and the corporate governance requirements as prescribed by the Securities and Exchange Board of India (Listing Obligation and Disclosure Requirements), Regulations 2015 (''SEBI Listing Regulations'').
The performance of the board was evaluated by the board after seeking inputs from all the directors on the basis of criteria such as the board composition and structure, effectiveness of board processes, information and functioning, etc. as provided by the Guidance Note on Board Evaluation issued by the Securities and Exchange Board of India on January 5, 2017.
The performance of the committees was evaluated by the board after seeking inputs from the committee members on the basis of criteria such as the composition of committees, effectiveness of committee meetings, etc.
The Board and the Nomination and Remuneration Committee reviewed the performance of individual directors on the basis of criteria such as the contribution of the individual director to the board and committee meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings, etc.
In a separate meeting of Independent Directors, performance of non-independent directors and the board as a whole was evaluated, taking into account the views of Executive Directors and Non-Executive Directors. The same was discussed in the board meeting that followed the meeting of the Independent Directors, at which performance of the board, its committees and individual directors was also discussed. Performance evaluation of independence directors was done by the entire board, excluding the independent director being evaluated.
Board Committees: Currently the Board has six committees: the Audit Committee, the Stakeholders Relationship Committee, the Nomination and Remuneration Committee, the Corporate Social Responsibly and Governance Committee, the Risk management Committee and Finance Committee. A detailed note on the composition of the Board and its committees is provided in the corporate governance report section of this Annual Report.
Familiarizations Programme: To familiarize the new directors with the strategy, operation and functions of the Company, the Company make presentations to the new directors about the Company''s strategy, operations, product and service offering, market, organization structure, finance, human resources, technology, quality, facilities and risk management. The details of programmes for familiarization of Independent Directors with the Company, their roles, rights, responsibilities in the Company, nature of the industry in which the Company operates, business model of the Company and related matters are put up on the website of the Company at the link: http://www.coxandkings.com/ downloads/investor-relations/familiarisation-programme-for-independent-directors.pdf.
Board diversity: Your company recognizes and embraces the importance of a diverse board in its success. We believe that a truly diverse Board will leverage difference in thoughts, perspective, knowledge, skill, regional and industry experience, cultural and geographical background, age ethnicity and gender which will help us retain our competitive advantages. The Board has adopted the Board Diversity Policy which set out the approach to diversity of the Board of Directors. The Board Diversity Policy is available on website of the Company at the link: http://www.coxandkings.com/ downloads/investor-relations/board-diversity-policy.pdf.
Company policy on Directors Appointment and Remuneration: The Company has in place Nomination & Remuneration Committee in accordance with the requirements of the Companies Act, 2013 read with rules made there under and Regulation 19 of SEBI (Listing Obligations & Disclosure Requirements) Regulation, 2015. The details relating to the same forms part of Corporate Governance Report forming part of this Annual Report.
The Committee had formulated a policy on Director''s appointment and remuneration including recommendation of remuneration of the key managerial personnel and other employees, composition and the criteria for determining qualifications, positive attributes and independence of a Director.
9. AUDITORS
The Statutory Auditors of your Company M/s. Chaturvedi & Shah, Chartered Accountants, were appointed to hold office until the conclusion of the ensuing 77th Annual General Meeting.
The term of M/s. Chaturvedi & Shah, Chartered Accountants, Statutory Auditors of the Company, will expire at the end of the ensuing 77th Annual General Meeting of the Company. M/s. Chaturvedi & Shah had been the Statutory Auditors of the Company since 2007. As per the provisions of Section 139 of the Companies Act, 2013 and rule 3 to 6 of the Companies (Audit and Auditor) Rules made there under, the Statutory Auditor firm, whose term expires shall be replaced by a new Statutory Auditor.
In terms of the requirement of Section 139 of the Act read with rules made there under, the Board of Directors of the Company on the recommendation of the Audit Committee has appointed M/s. DTS & Associates, Chartered Accountants (Firm Registration No. 142412W) as the Statutory Auditors of the Company in the Board Meeting held on May 29, 2017, for a term of 5 (five) consecutive years commencing from the conclusion from the ensuing 77th Annual General Meeting till the conclusion of the 82nd Annual General Meeting to be held in year the 2022, subject to the approval of the shareholders in the ensuing 77th Annual General Meeting. M/s. DTS & Associates, Chartered Accountants have confirmed that their appointment, if made, would be within the limits specified under Section 141(3)(g) of the Act and that they are not disqualified to be appointed as statutory auditor in terms of the provisions of the proviso to Section 139(1), Section 141(2) and Section 141(3) of the Act and the provisions of the Companies (Audit and Auditor) Rules, 2014.
The appointment of M/s. DTS & Associates, Chartered Accountants as Statutory Auditors shall be subject to ratification by the shareholders at every Annual General Meeting during their term of of five years.
The Board places on record its appreciation for the services rendered by M/s. Chaturvedi & Shah as Statutory Auditors of the Company.
10. AUDITORS'' REPORT
The notes on Financial Statement referred to in the Auditors'' Report are self explanatory and does not call for any further comment. The Auditor''s Report does not contain any qualification, reservation or adverse remarks.
11. SECRETARIAL AUDIT REPORT
The Board has appointed Mr. Virendra Bhatt, Practicing Company Secretary, to conduct Secretarial Audit of the Company for financial year 2016-17. The Secretarial Audit Report for the financial year ended March 31, 2017 is annexed herewith as Annexure I to this Report. The Secretarial audit Report does not contain any qualification or adverse remark.
12. FIXED DEPOSITS
Your Company has not accepted any fixed deposits within the meaning of Section 73 of the Companies Act, 2013 read with Companies (Acceptance of Deposits) Rules, 2014 during the year.
13. MANAGEMENT''S DISCUSSION AND ANALYSIS REPORT
The Management''s Discussion and Analysis on Company''s performance - industry trends and other material changes with respect to the Company and its subsidiaries pursuant to Regulation 34(2) of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 is presented in a separate section forming part of the Annual Report.
14. CORPORATE GOVERNANCE
The Company is committed to maintain the highest standards of Corporate Governance and adhere to the Corporate Governance requirements set out by SEBI. The Report on Corporate Governance as stipulated under Regulation 72 of SEBI (Listing Obligations and Disclosure Requirements) Regulation, 2015 forms part of the Report.
The requisite Certificate from the Auditors of the Company confirming compliance with the conditions of Corporate Governance as stipulated under the aforesaid Regulation 72 is attached to this Report.
15. CORPORATE SOCIAL RESPONSIBILITY
It is your Company''s intent to make a positive difference to society. As its operations have expanded to new geographies, your Company has retained a collective focus on various areas of CSR that impact the environment, people and their health and society at large. In particular, the Company focuses its efforts on promotion of education, promotion of gender equality and empowering women, improving health especially amongst children, Ensuring environmental sustainability and Animal Welfare.
Detailed information on the initiative of the Company towards CSR activities is provided as Annexure II to the Director Report.
16. EXTRACT OF ANNUAL RETURN
Pursuant to Section 92 of Companies Act 2013, every company is required to prepare Annual Return for the previous financial year. Under subsection (3) of the said Section, it is also mandatory to enclose the extract of the Annual Return with Director Report.
The extract of the Annual Return as prescribed is enclosed as Annexure III to the Director Report.
17. BUSINESS RESPONSIBILITY REPORTING
The Business Responsibility Report of the Company for the year ended March 31, 2017 forms part of this Annual Report.
18. RELATED PARTY TRANSACTIONS
All contracts/arrangements/transactions with related parties are placed before the Audit Committee and also the Board for approval. Prior omnibus approval of the Audit Committee and the Board is obtained for the transactions which are forseen and repetitive nature. All contracts/arrangements/transactions entered by the Company during the financial year with related parties were in the ordinary course of business and on an arm''s length basis. During the year, the Company had not entered into any contract/arrangement/transaction with related parties which could be considered material in accordance with the policy of the Company on materiality of related party transactions. Accordingly, no transactions are being reported in Form AOC-2 in terms of Section 134 of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014. However, the details of the transactions with Related Party are provided in the Company''s financial statements in accordance with the Accounting Standards.
The Policy on materiality of related party transactions and dealing with related party transactions as approved by the Board may be accessed on the Company''s website at the link: http://www.coxandkings.com/downloads/ investor-relations/policy-on-related-party-transaction.pdf
Your Directors draw attention of the members to Note 29 to the financial statement which sets out related party disclosures.
19. PARTICULARS OF LOANS GIVEN, INVESTMENTS MADE, GUARANTEES GIVEN AND SECURITIES PROVIDED
Particulars of loans given, investments made, guarantees given and securities provided along with the purpose for which the loan or guarantee or security is proposed to be utilized by the recipient are provided in the standalone financial statement (Please refer to Note 8 to the standalone financial statement).
20. RISK MANAGEMENT POLICY
Your Company has an elaborated Risk Management procedure and adopted systematic approach to mitigate risk associated with accomplishment of objectives, operations, revenues and regulations. Your Company believes that this would ensure mitigating steps proactively and help to achieve stated objectives. The entity''s objectives can be viewed in the context of four categories Strategic, Operations, Reporting and Compliance. We consider activities at all levels of the organization, viz Enterprise level, Division level, Business unit level and Subsidiary level, in Risk Management framework. The Risk Management process of the Company focuses on three elements, viz. (1) Risk Assessment; (2) Risk Management; (3) Risk Monitoring.
A Risk Management Committee is constituted which has been entrusted with the responsibility to assist the Board in (a) Overseeing and approving the Company''s enterprise wide risk management framework; and (b) Overseeing that all the risk that the organization faces.
The key risks and mitigating actions are also placed before the Audit Committee of the Company. Significant audit observations and follow up actions thereon are reported to the Audit Committee. The Audit Committee reviews adequacy and effectiveness of the Company''s internal control environment and monitors the implementation of audit recommendations, including those relating to strengthening of the Company''s risk management policies and systems.
The Policy on Risk Management as approved by the Board may be accessed on the Company''s website at the link: http://www.coxandkings.com/downloads/investor-relations/risk-management-policy.pdf
21. VIGIL MECHANISM/WHISTLEBLOWER POLICY
Vigil Mechanism Policy for Directors and employees of the Company is constituted, to provide a mechanism which ensures adequate safeguards to employees and Directors from any victimization on rising of concerns of any violations of legal or regulatory requirements, incorrect or misrepresentation of any, financial statements and reports, etc. The vigil mechanism/whistle blower policy may be accessed on the Company''s website at the link http://www.coxandkings.com/downloads/investor-relations/whistleblower-policy.pdf
22. DISCLOSURE UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION & REDRESSAL) ACT, 2013
Your Company is committed to provide a safe and secure environment to its women employees across its functions and other women stakeholders, as they are considered as integral and important part of the organization. Your Company has in place an Sexual Harassment Policy in line with the requirements of the Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. An Sexual Harassment Redressal Cell has been set up as per the statutory requirements, to redress complaints regarding sexual harassment. The policy has set guidelines on the redressal and enquiry process that is to be followed by complainants and ICC, whilst dealing with issues related to sexual harassment at the work place. All women employees (permanent, temporary, contractual and trainees) are covered under this policy. Your Company has not received any complaint during the year.
23. INTERNAL FINANCIAL CONTROLS
The Company has in place Internal Financial Control system, commensurate with size & complexity of its operations to ensure proper recording of financial and operational information & compliance of various internal controls & other regulatory & statutory compliances. During the year under review, no material or serious observation has been received from the Internal Auditors of the Company for inefficiency or inadequacy of such controls.
Internal Auditors'' comprising of professional Chartered Accountants monitor & evaluate the efficiancy of Internal Financial Control system in the company, its compliance with operating system, accounting procedures & policies at all the locations of the company. Based on their report of Internal Audit function, corrective actions in the respective area are undertaken & controls are strengthened. Significant audit observations & corrective action suggested are presented to the Audit Committee.
24. PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES
The information required under section 197 of the Act read with rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given below.
a. The ratio of remuneration of each director to the median remuneration of the employees of the company for the financial year :
Executive Director |
Ratio to median remuneration |
Ms. Urrshila Kerkar |
58.51% |
Non Executive Director |
|
Mr. A. B. M. Good |
0.73% |
Mr. Peter Kerkar |
0.47% |
Mr. Pesi Patel |
2.48% |
Mr. S. C. Bhargava |
2.51% |
Mr. M Narayanan |
2.48% |
b. The percentage increase in remuneration of each director, chief financial officer, company secretary in the financial year:
Directors, Chief Financial Officer & Company Secretary |
% increase in remuneration in the financial year |
Mr. A. B. M Good |
48% |
Mr. Peter Kerkar |
67% |
Ms Urrshila Kerkar |
Nil |
Mr. Pesi Patel |
18% |
Mr. S. C. Bhargava |
10% |
Mr. M Narayanan |
10% |
Mr. Anil Khandelwal (Chief Financial Officer) |
20% |
Ms. Rashmi Jain (Company Secretary) |
13% |
c. The percentage increase in the median remuneration of employees in the financial year: 5%
d. The number of permanent employees on the rolls of company: 2240
e. Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration:
The average annual increase was around 15%. However, during the course of the year, the total increase in the managerial remuneration for the year was 8%.
f. The key parameters for any variable component of remuneration availed by the directors:
The remuneration to Whole Time Director involves balance between fixed and variable pay reflecting short and long term performance objective appropriate to the workings of the Company and its goals.
The remuneration to Non-Executive Directors involves sitting fees for attending meeting of the Board and Committees and commission based on the approval of the Members.
g. Affirmation that the remuneration is as per the remuneration policy of the Company:
The Company affirms remuneration is as per the remuneration policy of the Company.
h. The statement containing particulars of employees as required under section 197(12) of the Act read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is provided in a separate annexure forming part of this report. Further, the report and the accounts are being sent to the members excluding the aforesaid annexure. In terms of section 136 of the Act, the said annexure is open for inspection at the Registered Office of the Company. Any shareholder interested in obtaining a copy of the same may write to the Company Secretary.
25. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO
The Company has no activity relating to conversation of energy or technology absorption. The Company continued to be a net foreign exchange earner during the year.
The figures for the foreign exchange earnings and outgo are as follows;
Foreign Exchange Earnings:
Rs,16,024 Lakhs (Previous Year Rs,15,330 Lakhs)
Foreign Exchange Outgo:
Rs,834 Lakhs (Previous Year Rs,671 Lakhs)
(Other than in the normal course of the business as Tour Operator and Foreign Exchange Restricted Authorized Dealer)
26. AWARDS AND RECOGNITION: India - 2016-17
- World Travel Award to Cox & Kings for Asia''s Leading Luxury tour operator for 2016
- World Travel Award for India''s Leading Tour Operator for 2016
- World Travel Award for India''s Leading Travel Agency for 2016
- Conde Nast Traveller India Readers'' Travel Awards 2016 for India''s Favourite Tour Operator for 2016
- Travel Leisure Awards for Best Tour Operator for 2016
- Hospitality India Awards for Best Domestic Tour Operator for 2016
- Hospitality India Awards for Best Experiential Travel Company for 2016
- IATO Annual Convention for Best Brochure for 2016.
- IATO Annual Convention for Best CD for 2016
- Champions of ChinaPlas for Trade Fairs for 2016
- Marriott India Travel Awards 2016 for Excellence in partnership - Highest Growth over last year, Global for 2016
- French Ambassadorâs Travel Awards 2017 for Gold Award - Best growth in French via assuances for 2016-17
- Travel and Lifestyle Leadership Award 2016 presented by Lonely Planet for Best Outbound Tour Operator for 2016-17
- SATTE Awards 2017 for Best Outbound Tour Operator for 2016-17
- Sri Lankan Airline Top Agents Award for Passenger Sales for 2016-17
Subsidiaries - 2016-17 PGL
- Won ''Best Adventure Experience'' at the School Travel Awards. The School Travel Awards recognize the best attractions, destinations, companies and practitioners in the field of educational travel and learning outside the classroom (LOtC).
NST
- Career Academy UK - Volunteer Organization of the Year (Northern) 2017. Career Ready is a UK wide charity linking employers with schools and colleges to open up the world of work to young people.
- Quality Management ISO 9001 - 2008.
- Environmental Management ISO 14001 - 2004
- Excellence in Customer Service Nottingham Trent University
27. ACKNOWLEDGEMENTS AND APPRECIATION
Your Directors take this opportunity to thank all investors, customers, vendors, banks/financial institutions, regulatory and government authorities and Stock Exchanges for their consistent support and encouragement to the Company. The Directors also place on record their sincere appreciation to all employees of the Company for their hard work, dedication and commitment. The enthusiasm and unstinting efforts of the employees have enabled the Company to remain at the forefront of the Industry.
For and on behalf of the Board of Directors
A.B.M. Good
Chairman
Mumbai, May 29, 2017
Mar 31, 2015
Dear Shareholders,
The Directors are pleased to present the 75th Annual Report and the
audited financial statement for the financial year ended March 31, 2015
Financial Performance
The company's financial performance, for the year ended March 31, 2015
is summarized below:
(Rs. in lakhs)
Particulars Standalone Results Consolidated Results
2014-15 2013-14 2014-15 2013-14
Net Sales & Other income 48,059 47,256 256,909 235,066
Profit before Taxation 22,235 19,295 23,365 61,334
Provision for Taxation 8,117 8,027 14,326 16,428
Profit After Tax 14,117 11,268 9,178 38,317
Proposed Dividend
(inclusive of dividend
tax) 1,693 1,597
Earnings Per Share (Rs.) 9.56 8.25 6.22 28.07
Dividend
The Directors are pleased to recommend a Dividend of 20% (Rs.1/- per
equity share ofRs.5/- each) to be appropriated from the profits of the
financial year ended March 31st, 2015, subject to the approval of the
shareholders at the ensuing Annual General Meeting. The Dividend will
be paid in compliance with applicable regulations. The dividend, if
declared as above, would involve an outflow of Rs.1693 Lacs towards
dividend and Rs.354 Lacs towards dividend tax, resulting in a total
outflow ofRs.2047 Lacs.
The dividend will be paid to members whose names appear in the Register
of Members as on 18th September, 2015. In respect of shares held in
dematerialised form, it will be paid to members whose names are
furnished by National Securities Depository Limited and Central
Depository Services ( India) Limited, as beneficial owners as on that
date.
The dividend payout for the year under review has been formulated in
accordance with the Company's policy to pay sustainable dividend linked
to long-term performance, keeping in view the Company's need for
capital for its growth plans and the intent to finance such plans
through internal accruals to the maximum.
Company's Performance
FY15 has been a year of growth and consolidation for the Group. The
business displayed robust growth, with especially strong contributions
from the Education business. In the leisure space, despite a relatively
tepid global growth environment, C&K brands displayed a robust increase
in revenues together with steady profitability. During the year, your
Company strengthened the Balance Sheet through strategic divestitures
and a qualified institutional placement (QIP) of equity shares; as a
result, group gross debt fell from Rs.5,584 crores at the end of FY14
to Rs.3,780 crores as of March 31, 2015.
Group net revenues (excluding Camping) grew by 15% y-o-y to Rs.2,271
crores in FY15 while profit before exceptional items and tax stood at
Rs.542 crores in FY15, down 18% y-o-y from Rs.659 crores in FY14.
However, on a normalized basis, i.e. excluding forex gains or losses,
profit before exceptional items and tax stood at Rs.542 crores in FY15,
up 24% y-o-y from Rs.439 crores in FY14. The Company's consolidated net
profit after tax, exceptional items, minority interests and share of
income from associates was lower year-on-year by 76% at Rs.92 crores,
as compared to Rs.383 crores in the prior year. Exceptional items
included a net loss of Rs.202 crores on the sale of Camping division, a
one-time charge of Rs.102 crores on cancellation of forward hedges on
acquisition debt, and a restructuring charge of Rs.4 crores.
Leisure - India
C&K Leisure - India business grew robustly during the year. Net
revenues were up 15% to Rs.481 crores, while EBITDA grew 14% to Rs.236
crores. EBITDA margins were stable at ~49%.
Your Company continues to further entrench its dominant position in the
holiday market, with customers preferring us for our wide bouquet of
travel destination choices delivered across multiple price points.
Today C&K operates through our powerful network of 12 own stores, 142
franchisees and 90 preferred sales agents. Your Company's market share
has been growing steadily over the last few years as we grow at rates
faster than the industry. Your Company sheer size enables us to secure
the best possible deals from airlines, hotels and other vendors, which
in turn enables the Company to offer the best value proposition to the
Indian traveller.
Your Company's B2B businesses also performed well this year as it
invested aggressively in strengthening its relationship with key
customers. Meetings, incentives, conferences and events (MICE) are now
a routine part of corporate culture and we see a bright future for this
business as the economy grows. We are also very strong in Business
Travel, offering the best-value, customized, flexible solutions to our
corporate customers.
While inbound business did not grow rapidly in FY15 we believe over the
long term this business may be a significant growth driver as the
Indian government increasingly views tourism as a key avenue of
employment generation.
Leisure  International
C&K Leisure  International business grew steadily during the year. Net
revenues were up 6% to Rs.650 crores, while EBITDA grew 9% to Rs.236
crores; EBITDA margins rose slightly to ~36%. Growth was driven mainly
by U.K. and U.S. geographies.
The outlook for this business is positive due to higher tax-free
withdrawals of annuities allowed for U.K. pensioners from April 2015, a
stronger pound, and stability in U.K. politics.
Although this business has historically grown at a slower rate than
other businesses, it occupies a niche position in several markets and
produces a steady stream of cash flow. Leisure  International also
enjoys a substantial amount of repeat business. C&K continues to
leverage the strong vendor relationships across all the Leisure Â
International sub- divisions to deliver the best value for our
customers around the world.
According to WTTC, the global travel market direct contribution to GDP
is likely to grow by 3.9% p.a. over 2015e-2025f. In recent years, the
global travel market has outpaced so called 'hot' sectors such as
financial services, healthcare and automotives, according to WTTC. More
tourists than ever are crossing international borders every year, 1.14
billion in 2014 alone. Direct international receipts from tourism have
reached US$1.38 trillion in 2014; this is expected to grow at 4.2% p.a.
over 2015e-25f to reach US$2.14 trillion.
Businesses denominated in U.K. pound sterling dominate the revenue
line, amounting to as much as 60% of the overall net revenues. Your
Company U.S., Australia and U.A.E. businesses account for about ~10%
each, while Japan and others make up the rest. The diversified nature
of revenue streams by product lines and geographies makes this business
an important cog in the wheel.
Education
Education business grew strongly in FY15. Net revenues were up 19% at
Rs.640 crores, while EBITDA grew 16% to Rs.262 crores, driven by strong
performances at both PGL and NST.
At PGL, the Company continues to take market share from the
state-funded sector in the U.K. as local education authorities suffer
from budget cuts. We are also increasing capacity utilization by
introducing new programs during the summer- holiday period and during
the shoulders of winter. We are also introducing new programs and
packages to increasing our capacity utilization during the weekends.
The performance of the Australia division, now in its second year of
operation, has been in line with internal expectations.
The NST business grew very strongly this year, partly because of the
benefit of two Easter holiday periods falling within one financial
year.
The long-term outlook for Education business is robust for a number of
reasons, not least of all because of a mini baby boom in the U.K. The
Department for Education sees a 12% increase in the pupil population
over the period 2014-2023; pupil populations are forecast to reach
levels last seen in the late 1970s. We are pioneers in the business of
experiential learning. The classroom method of learning is increasingly
redundant in the 21st century and we intend to capitalize on the
tremendous organic growth opportunities in this business by introducing
our skills and brands in multiple geographies over the medium term.
Meininger
The Meininger hybrid hotels business grew reasonably well in FY15. Net
revenues were up 8% at Rs.356 crores, while EBITDA grew 25% to Rs.124
crores, driven by higher occupancy and consequently higher average bed
rates.
Meininger's ability to deliver a clean, safe stay for as little as
EUR15 per night in city-centre locations is a tremendous value
proposition for our guests. The business enjoyed a high bed occupancy
rate of 75% in FY15, up 420bps y-o-y.
Your Company believe Meininger will be a significant growth driver for
C&K over the medium to long term. In order to spearhead our expansion
we have tied up with Europe's largest real estate investment trust
(REIT), Fonciere des Murs (FDM). FDM has committed to buy properties
worth EUR400m throughout Europe over the next four years, which will be
converted into Meininger hotels. We currently run ~7,000 beds and we
intend to add aggressively over the next four years and beyond, both
within Europe as well as outside.
Others
The 'Others' portion of the business substantially relates to
outsourced visa processing services to diplomatic missions around the
world. This business generated revenues of Rs.86 crores in FY15 versus
Rs.32 crores in FY14. The business reported an EBITDA loss of Rs.46
crores in FY15 versus an EBITDA loss of Rs.22 crores in FY14. For the
full year FY15 we incurred some sizeable start-up costs associated with
a marquee contract to process India visas in the US.
Consolidated Financial Statements
In accordance with the Companies Act, 2013 ("the Act") and Accounting
Standard (AS) -21 on Consolidated Financial Statement read with AS-23
on Accounting for Investments in Associates and AS-27 on Financial
Reporting of Interest in Joint Ventures, the Audited Consolidated
Financial Statements are provided in the Annual Report.
Subsidiaries & Associates
During the year, the Board of Directors reviewed the affairs of the
Subsidiaries. In accordance with the Section 129(3) of the Companies
Act 2013, your Company has prepared the consolidated financial
statements of the Company and all its subsidiaries, which form part of
the Annual Report. A report on the performance and financial position
of each of the subsidiaries, associates and joint venture companies as
per the Companies Act, 2013 is provided to the consolidated financial
statement and hence not repeated here for the sake of brevity. Details
of major subsidiaries of the Company and their business operations
during the year under review are covered in the Management's Discussion
and Analysis Report.
The Policy for determining material subsidiaries as approved may be
accessed on the Company's website at the link
http://www.coxandkings.com/downloads/investor-relations/material-
subsidiary-policy.pdf.
During the Year under review, following subsidiary have become or
ceased to be Company's subsidiaries.
Companies which have become subsidiaries during the financial year
2014-15
1. Cox and Kings PGL Camps Pty Limited
2. Meininger Finance Co Limited
3. Meininger Paris SCI
4. Superbreak Mini-Holidays Transport Limited
Companies which ceased to be subsidiaries during the financial year
2014-15
1. Greenbank Holidays Limited
2. RM & Reise Marketing & Services GmbH
3. Parkovi Sunca d.o.O.
4. Camping in Comfort BV
5. Keycamp Holidays Netherlands BV
6. Keycamp Holidays (Ireland) Limited
7. Eurosites AS
8. Holidaybreak Reisevermittlung GmbH (formerly Eurocamp Travel GmbH)
9 Depot Starvillas SARL
10. Eurocamp Independent Limited
11. Eurocamp Limited
12. Eurocamp Travel (Schweiz) AG
13. Eurocamp Travel BV
14. Camping Division Limited
15. Sites Services SARL
16. Greenbank Packages Limited
17. Greenbank Services Limited
18. Own A Holiday Home Limited
19. Holidays Limited
20. Select Sites Limited
21. Starvillas Limited
22. Chalets de France Ltd
23. GHL Transport Limited
24. Eurosites BV
25. Prometheon Holdings Ltd
Other updates
a. Qualified Institutional Placement
During the year, under review your company successfully placed
3,27,87,000 equity shares through the process of Qualified
Institutional Process (QIP) and raised an amount of Rs. 1000 crores
consequent to the above.
b. Preferential Allotment
On 6th January, 2015, the Company had issued and allotted 72,50,000
Warrants to Standford Trading Private Limited, a promoter group entity,
entitling for subscription of equivalent number of equity shares of Rs.
5/- each at a price of Rs. 309.82/- per Warrant including premium of
Rs. 304.82/- aggregating to Rs. 224.61 Crores .
The warrants has the option of converting into the equity shares of the
Company within a period of 18 months. The Warrants on conversion into
equity shares shall rank pari-passu with the existing equity shares of
the Company.
c. Sale of Camping Division by Holidaybreak Limited, Subsidiary of the
Company
Focusing on the strategy of becoming a leading Leisure & Education
travel group and to have a global footprint with market leadership
positions in its core business, the Company sold the Camping Division
of its subsidiary Holidaybreak Limited to Homair Vacances for a total
consideration £89.2 mn in September 2014. The Camping Division provided
outdoor family holidays on over 170 third-party owned campsites across
12 European countries. Your Company had acquired the Camping Division
as part of its acquisition of Holidaybreak in 2011.
d. PGL opens its second center in Australia
During the year, PGL, a subsidiary of Holidaybreak Ltd, the European
Education and Leisure specialist group added its second site, Camp
Rumbug in Australia, as part of its plan to expand in Australia.
Camp Rumbug is located in the majestic hills of South Gippsland, two
hours south-east from Melbourne's central business district and is set
on 200 acres of temperate rainforest overlooking Wilsons Promontory
National Park. Accommodation comprises of a total of 260 beds in two
purpose-built buildings. PGL's first centre in Australia Campaspe Downs
is located on the outskirts of the Macedon Ranges, close to Kyneton an
hour's drive north from Melbourne. PGL Campaspe Downs offers 350 beds.
Local attractions include Hanging Rock, Organ Pipes National Park and
Mt Macedon National Park, as well as historic townships and museums.
PGL has been operating school camps, adventure centres and retreats in
the UK and Europe since 1957. PGL operates 25 centres in the UK, Europe
& Australia.
e. Meininger
During the year, MEININGER Holding GmbH, subsidiary of the Company and
Foncière des Régions, through its subsidiary Foncière des Murs, formed
a commercial partnership in respect of the sourcing by MEININGER and
acquisition by Foncière des Régions of hotel property investment
opportunities primarily in European gateway cities, to be leased to and
managed by MEININGER under the "MEININGER" brand. Primary cities
targeted include Amsterdam, Barcelona, Brussels, Berlin, Geneva,
Hamburg, Frankfurt, London, Madrid, Milan, Munich, Paris, Rome, Vienna
and Zurich, In addition other cities in both Western and Eastern Europe
where the MEININGER brand is likely to be popular are also planned for
expansion.
MEININGER will operate these hotels under its brand in a lease
structure. MEININGER will also provide other services appropriate to
its brand.
f. Rating
CARE, the rating agency, has upgraded the rating of Long Term Bank
Facilities and issue of Non-Convertible Debentures of the Company to
'CARE AA' (Double A) from the exiting 'CARE AA-' (Double A Minus).
Instruments with this rating indicate high degree of safety for timely
servicing of debt obligations and carry very low credit risk.
CARE, has also enhanced the Commercial Paper issue of the Company from
the existing Rs.750 Crores to Rs.825 crores. The rating to the
Commercial Paper issue has been reaffirmed to the highest short term
rating, 'CARE A1 ' (A One Plus). Instruments with this rating indicate
very strong degree of safety regarding timely payment of financial
obligations and carry lowest credit risk.
g. Change of Depository for GDR issue from CitiBank NA to Bank of New
York and Mellon (BNY)
With effect from 20th January, 2015, The Bank of New York Mellon, had
been appointed as successor depositary to Citibank, N.A by the Company
for its Global Depositary Receipt (GDR) program. The GDR of the Company
are listed on Luxembourg Stock Exchange.
h. Completion of comprehensive refinancing
During the year under review, Holidaybreak Limited completed a
comprehensive refinancing of Holidaybreak Limited and Prometheon
Holding (UK) Limited banking facilities. The new £245 millon facility
is provided jointly by Holidaybreak's existing lenders and new lenders.
The refinancing removes legacy acquisition finance debt, reduces
finance costs, simplifies considerably the borrowing arrangements,
enhances covenant flexibility, extends the maturity to September 2019
and September 2020, and diversifies the sources of lending. Prometheon
Holding (UK) Limited debt facilities have been repaid in full and as a
consequence the corporate guarantee from Cox & Kings Ltd. against this
loan is released.
Your Company had acquired Holidaybreak Limited, the Education Activity
and Leisure Specialists travel group in 2011 through its subsidiary
Prometheon Holdings (UK) Limited.
i. Re-financing by subsidiary Company Prometheon Enterprise Limited
During the year under review, Prometheon Enterprise Limited, wholly
owned subsidiary of the Company, refinanced US$ 200 millon facility for
a tenor up to 2021. The debt replacement plan achieves following key
benefits for the company:Â
1. The loans being repaid had an average maturity of 2.50 years
whereas the new loan has an average maturity of 5.17 years.
2. The new loan provides interest savings by improving the IRR.
j. Legal proceedings with Indian Railway Catering & Tourism
Corporation (IRCTC) with respect to Royale Indian Rail Tours Limited
The Royale Indian Rail Tours Limited is 50: 50 joint-venture between
IRCTC and the Company. The Supreme Court had directed both the parties
to go for arbitration. The arbitration proceeding has been initiated by
your Company and at present the proceedings are underway as per the
directions of Arbitration Tribunal.
As regard to the CLB petition filed by IRCTC, the said petition is
posted for hearings in August 2015 and onwards.
Directors
Reappointments: In accordance with the provisions of the Act and the
Articles of Association of the Company, Mr. ABM Good, Director of the
Company, retire by rotation at the ensuing Annual General Meeting and
being eligible have offered himself for re-appointment.
Declaration by Independent Directors: The Company has received
declarations from all the Independent Directors of the Company
confirming that they meet the criteria of independence as prescribed
both under the Act and Clause 49 of the Listing Agreement with the
Stock Exchanges.
Board Evaluation: The Company has devised a Policy for performance
evaluation of Independent Directors, Board, Committees and other
individual Directors which includes criteria for performance evaluation
of the non-executive directors and executive directors. The evaluation
of all the Directors and the Board was conducted based on the criteria
and framework adopted by the Board. The Board approved the evaluation
results as collated by the nomination and remuneration committee.
Board Evaluation Process
The performance evaluation of the Board, its Committees and individual
Directors was conducted and the same was based on questionnaire and
feedback from all the Directors on the Board as a whole, its Committees
and individual Directors.
The Chairperson of the "Nomination and Remuneration Committee" (NRC)
held discussions with each of the Directors of the Company and obtained
their feedback on overall Board effectiveness as well as on each of the
other Directors. Based on the questionnaire and feedback, the
performance of every Director was evaluated in the meeting of the NRC.
Some of the key criteria for performance evaluation, as laid down by
the NRC were as follows- Performance evaluation of Directors:
- invests time in understanding the company & its unique requirements.
- Demonstates professional behaviour, prudence & diligence consistently
- Possesses knowledge of financial & other performance metrics for
reviewing the organisation performance
- brings in external knowledge & perspective to the table for
discussion Performance evaluation of Board and Committees:
- Board structure and composition
- Degree of fullment of key responsibilities
- Establishment and delineation of responsibilities to Committees
- Effectiveness of Board Processes, Information and Functioning
- Board Culture and Dynamics
- Quality of relationship between the Board and Management
- Efficiency of communication with External Stakeholders
- Contributes effectively towards development & periodic review of
organisation strategy.
Familiarisation Programme: To familiarise the new directors with the
strategy, operation and functions of the Company, the Company make
presentations to the new directors about the Company's strategy,
operations, product and service offering, market, organisation
structure, finance, human resources, technology, quality, facilities
and risk management. The details of programmes for familiarisation of
Independent Directors with the Company, their roles, rights,
responsibilities in the Company, nature of the industry in which the
Company operates, business model of the Company and related matters are
put up on the website of the Company at the link:
http://www.coxandkings.com/downloads/investor-
relations/familiarisation-programme-for-independent-directors.pdf.
Board diversity: Your company recognises and embraces the importance of
a diverse board in its success. We believe that a truly diverse Board
will leverage difference in thoughts, perspective, knowledge, skill,
regional and industry experience, cultural and geographical background,
age ethnicity and gender which will help us retain our competitive
advantages. The Board has adopted the Board Diversity Policy which set
out the approach to diversity of the Board of Directors. The Board
Diversity Policy is available on website of the Company at the link:
http://www.coxandkings.com/downloads/
investor-relations/board-diversity-policy.pdf.
Board Meetings: Six meetings of the Board of Directors were held during
the year. For further details, please refer report on Corporate
Governance forming part of this Annual Report.
Directors' Responsibility Statement
Pursuant to the requirement under Section 134 of the Companies Act,
2013, with respect to Directors' Responsibility Statement, it is hereby
confirmed that:
(a) In the preparation of the annual accounts, the applicable
accounting standards had been followed along with proper explanation
relating to material departures;
(b) the directors had 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 and
loss of the company for that period;
(c) The directors had taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of this Act for safeguarding the assets of the company and
for preventing and detecting fraud and other irregularities;
(d) The directors had prepared the annual accounts on a going concern
basis; and
(e) The directors, in the case of a listed company, had laid down
internal financial controls to be followed by the company and that such
internal financial controls are adequate and were operating
effectively.
(f) the directors had devised proper systems to ensure compliance with
the provisions of all applicable laws and that such systems were
adequate and operating effectively.
Board Committees
Your Company has constituted the following Committees:
- Audit Committee
- Stakeholders Relationship Committee
- Nomination and Remuneration Committee
- Corporate Social Responsibility and Governance Committee
- Risk Management Committee
a. Audit Committee
The Audit Committee of the Company is constituted in line with the
provisions of Clause 49 of the Listing Agreement and Section 177 of the
Companies Act 2013. The Audit Committee oversees of the Company's
financial reporting process and the disclosure of its financial
information to ensure that the financial statements are correct,
sufficient and credible.
Composition of the Audit Committee:
Sr.
No. Name Category
1 Mr. M. Narayanan (Chairman) Independent, Non Executive
2 Mr. Pesi Patel Independent, Non Executive
3 Mr. S. C Bhargava Independent, Non Executive
4 Mr. A. B. M. Good Non Executive
All the recommendation of the Audit Committee has been accepted by the
Board.
b. Stakeholders Relationship Committee
The Stakeholders Relationship Committee is primarily responsible to
review all matters connected with the Company's transfer of securities
and redressal of shareholders'/investors'/security holders' complaints.
The Committee also monitors the implementation and compliance with the
Company's Code of Conduct for Prohibition of Insider Trading.
Composition of the Stakeholders Relationship
Sr.
No. Name of Director Executive/Non Executive
1 Mr. Pesi Patel (Chairman) Independent, Non Executive
2 Mr. M. Narayanan Independent, Non Executive
3 Mr. S. C Bhargava Independent, Non Executive
4 Mr. A. B. M. Good Non Executive
c. Nomination and Remuneration Committee
The Nomination and Remuneration Committee shall identify persons 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 and shall carry out evaluation of
every director's performance. The 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.
Composition of the Nomination and Remuneration Committee is as under
Sr.
No. Name of Director Executive/Non Executive
1 Mr. Pesi Patel (Chairman) Independent, Non Executive
2 Mr. M. Narayanan Independent, Non Executive
3 Mr. S. C Bhargava Independent, Non Executive
4 Mr. A. B. M. Good Non Executive
5. Mr. Peter Kerkar Non Executive
The details of Nomination and Remuneration Policy of the Company is
available on the website of the Company at www.coxandkings.com
D. Corporate Social Responsibility and Governance Committee
The Committee's prime responsibility is to assist the Board in
discharging its social responsibilities by way of formulating and
monitoring implementation of the framework of 'corporate social
responsibility policy', observe practices of Corporate Governance at
all levels, and to suggest remedial measures wherever necessary.
Composition of the Committee
Sr.
No. Name of Director Executive/Non Executive
1 Ms. Urrshila Kerkar Executive
2 Mr. Peter Kerkar Non-Executive
3 Mr. S.C. Bhargava Independent, Non Executive
E. Risk Management Committee
The Risk Management Committee (RM Committee) was constituted by the
Board on 20th November 2014 adhering to the requirements of the
Companies Act, 2013 and Clause 49 of the Listing Agreement. The
Committee's prime responsibility is to implement and monitor the risk
management plan and policy of the Company. The Committee's constitution
meets with the requirements of Clause 49 of the Listing Agreement.
Composition of the Committee
Sr.
No. Name of Director Executive/Non Executive
1 Mr. Peter Kerkar Non-Executive
2 Mr. Pesi Patel Independent, Non Executive
3 Mr. S.C. Bhargava Independent, Non Executive
Auditors and Auditors' Report
M/s. Chaturvedi & Shah, Chartered Accountants, Statutory Auditors of
the Company, hold office until the conclusion of the ensuing Annual
General Meeting and being eligible, offer themselves for the
re-appointment.
The Company has received a certificate from the Auditors to the effect
that their re-appointment, if made, would be within the prescribed
limits under Section 141(3)(g) of the Companies Act, 2013 and they are
not disqualified for re-appointment.
The notes on Financial Statement referred to in the Auditors' Report
are self explanatory and does not call for any further comment.
Secretarial Audit Report
The Board has appointed Mr. Virendra Bhatt, Practicing Company
Secretary, to conduct Secretarial Audit of the Company for financial
year 2014-15. The Secretarial Audit Report for the financial year ended
March 31st, 2015 is annexed herewith as Annexure I to this Report. The
Secretarial audit Report does not contain any qualification or adverse
remark.
Fixed Deposits
Your Company has not accepted any fixed deposits within the meaning of
Section 73 of the Companies Act, 2013 during the year.
Management's Discussion and Analysis Report
The Management's Discussion and Analysis on Company's performance Â
industry trends and other material changes with respect to the Company
and its subsidiaries pursuant to Clause 49 of the Listing Agreement is
presented in a separate section forming part of the Annual Report.
Corporate Social Responsibility
It is your Company's intent to make a positive difference to society.
As its operations have expanded to new geographies, your Company has
retained a collective focus on various areas of CSR that impact the
environment, people and their health and society at large. In
particular, the Company focuses its efforts on promotion of education,
promotion of gender equality and empowering women, improving health
especially amongst children, Ensuring environmental sustainability and
Animal Welfare.
Detailed information on the initiative of the Company towards CSR
activities is provided as Annexure II to the Director Report.
Extract of Annual Return
Pursuant to Section 92 of Companies Act 2013, every Company is required
to prepare Annual Return for the previous financial year. Under
subsection (3) of the said Section, it is also mandatory to enclose the
extract of the Annual Return with Director Report.
The extract of the Annual Return as prescribed is enclosed as Annexure
III to the Director Report.
Related Party Transactions
All contracts/arrangements/transactions entered by the Company during
the financial year with related parties were in the ordinary course of
business and on an arm's length basis. During the year, the Company had
not entered into any contract/arrangement/transaction with related
parties which could be considered material in accordance with the
policy of the Company on materiality of related party transactions.
The Policy on materiality of related party transactions and dealing
with related party transactions as approved by the Board may be
accessed on the Company's website at the link:
http://www.coxandkings.com/downloads/investor-relations/
policy-on-related-party-transaction.pdf
Your Directors draw attention of the members to Note 26 to the
standalone financial statement which sets out related party
disclosures.
Particulars of Loans given, Investments made, Guarantees given and
Securities provided
Particulars of loans given, investments made, guarantees given and
securities provided along with the purpose for which the loan or
guarantee or security is proposed to be utilized by the recipient are
provided in the standalone financial statement (Please refer to Note 11
to the standalone financial statement).
Risk Management
Risk Management and Compliance processes form an integral part of your
Company. A sound risk management framework improves decision making,
defines opportunities and mitigates material events that may impact
shareholder value. The Group's risk management framework outlines risk
management processes by way of a guideline for adoption across the
various businesses, helping in identifying, assessing and mitigating
risks that could materially impact the individual entity's performance
in achieving its stated business objectives.
The Policy on Risk Management as approved by the Board may be accessed
on the Company's website at the link:
http://www.coxandkings.com/downloads/investor-relations/
risk-management-policy.pdf
Vigil Mechanism/Whistleblower Policy
Companies Act, 2013 provided that every listed company shall establish
a "vigil mechanism" for director and employees to report genuine
concerns and shall provide for adequate safeguard against victimisation
of persons who use such mechanism. It further states that the company
shall make provisions for direct access to the chairperson of the Audit
Committee in appropriate or exceptional cases. Accordingly, your
Company has framed a Whistleblower Policy to ensure that complaints are
resolved quickly in an informal and conciliatory manner,
confidentiality is maintained and both the complainant and the person
against whom the complaint is made are protected. The whistle blower
policy may be accessed on the Company's website at the link
http://www.coxandkings.com/downloads/investor-relations/whistleblower-
policy.pdf
Details in respect of adequacy of internal financial controls with
reference to the Financial Statements
Your Company has designed and implemented a process driven framework
for Internal Financial Controls ("IFC") within the meaning of the
explanation to Section 134 (5) (e) IFC of the Companies Act, 2013. For
the year ended 31st March, 2015, the Board is of the opinion that the
your Company has sound IFC commensurate with the nature and size of its
business operations; wherein controls are in place and operating
effectively and no material weaknesses exist. Your Company has a
process in place to continuously monitor the existing controls and
identify gaps, if any, and implement new and/or improved controls
wherever the effect of such gaps would have a material effect on the
Company's operation.
Corporate Governance
The Company is committed to maintain the highest standards of Corporate
Governance and adhere to the Corporate Governance requirements set out
by SEBI. The Report on Corporate Governance as stipulated under Clause
49 of the Listing Agreement forms part of the Report.
The requisite Certificate from the Auditors of the Company confirming
compliance with the conditions of Corporate Governance as stipulated
under the aforesaid Clause 49 is attached to this Report.
Particulars of Employees and related disclosures
The information required under section 197 of the Act read with rule
5(1) of the Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014 are given below.
a. The ratio of remuneration of each director to the median
remuneration of the employees of the company for the financial year:
Executive Director Ratio to median remuneration
Ms. Urrshila Kerkar 51.35%
Non Non-Executive Director
Mr. A.B.M. Good Nil
Mr. Peter Kerkar Nil
Mr. Pesi Patel 1.80%
Mr. S. C. Bhargava 1.80%
Mr. M Narayanan 1.80%
b. The percentage increase in remuneration of each director, chief
executive officer, chief financial officer, company secretary in the
financial year:
Directors, Chief Executive Officer, % increase in remuneration
Chief Financial Officer & Company
Secretary in the financial year
Mr. A.B.M Good Nil
Mr. Peter Kerkar Nil
Ms Urrshila Kerkar Nil
Mr. Pesi Patel Nil
Mr. S.C. Bhargava Nil
Mr. M Narayanan Nil
Mr. Anil Khandelwal (Chief
Financial Officer) 6%
Ms Rashmi Jain (Company Secretary) 23.50%
c. The percentage increase in the median remuneration of employees in
the financial year: 3.72%
d. The number of permanent employees on the rolls of company: 1806
e. The explanation on the relationship between average increase in
remuneration and company performance:
On an average, employees received an annual increase of 8% in India.
The individual increments varied from 4% to 12%, based on individual
performance. The increase in remuneration is in line with the market
trends & the industry. In order to ensure that remuneration reflects
Company performance, the performance linked variable pay is linked to
Business Unit's performance, organization's performance and an
individual's performance.
f. Comparison of the remuneration of the key managerial personnel
against the performance of the Company:
(Rs. in Crores)
Aggregate remuneration of key managerial
personnel (KMP) in FY 15 3.63
Net Revenues 480.58
Remuneration of KMPs (as % of revenue) 0.76%
Profit before Tax (PBT) 222.34
Remuneration of KMP (as % of PBT) 1.63%
g. Variations in the market capitalisation of the Company, price
earnings ratio as at the closing date of current financial year and
previous financial year:
Particulars March 31, 2015 March 31, 2014 % change
Market Capitalisation
(Rs.In Crores) 5,490.03 2,188.81 150.82%
Price Earning Ratio 33.92 19.43 74.54%
h. Percentage increase or decrease in the market quotations of the
shares of the company in comparison to the rate at which the Company
came out with the last Public offer:
Particulars March 31, 2015 December 9th, 2009 % Change
Market Price (BSE) 323.35 165* 95.96%
Market Price (NSE) 324.25 165* 96.51%
* share price has been adjusted pursuant to the split of face value
from Rs.10 each to Rs.5 each in the month of June 2011.
i. Average percentile increase already made in the salaries of
employees other than the managerial personnel in the last financial
year and its comparison with the percentile increase in the managerial
remuneration and justification thereof and point out if there are any
exceptional circumstances for increase in the managerial remuneration:
The average annual increase was around 7.39%. However, during the
course of the year, the total increase is approximately 8%, after
accounting for promotions and other event based compensation revisions.
Increase in the managerial remuneration for the year was 3.79%
j. Comparison of each remuneration of the Key managerial personnel
against the performance of the Company:
(Rs.in Crores)
Ms Urrshila Kerkar Mr. Anil Khandelwal Ms Rashmi Jain
(Whole Time
Director) (Chief Financial
Officer) (Company
Secretary)
Remuneration
in FY 15 2.0 1.33 0.30
Revenue 480.58 480.58 480.58
Remuneration
(as % of
revenue) 0.42% 0.28% 0.06%
Profit before
Tax (PBT) 222.34 222.34 222.34
Remuneration
(as % of PBT) 0.90% 0.60% 0.13%
k. The key parameters for any variable component of remuneration
availed by the directors:
The remuneration to Whole Time Director involves payment of fixed
remuneration as approved by the members of the Company.
The remuneration to non Executive Directors involves sitting fees for
attending meeting of the Board and Committees and commission based on
the approval of the Members.
l. The ratio of remuneration of the highest paid director to that of
employees who are not directors but receive remuneration in excess of
the highest paid director during the year: None
m. Affirmation that the remuneration is as per the remuneration policy
of the Company:
The Company affirms remuneration is as per the remuneration policy of
the Company.
n. The statement containing particulars of employees as required under
section 197 (12) of the Act read with Rule 5(2) of the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014, is
provided in a separate annexure forming part of this report. Further,
the report and the accounts are being sent to the members excluding the
aforesaid annexure. In terms of section 136 of the Act, the said
annexure is open for inspection at the Registered Office of the
Company. Any shareholder interested in obtaining a copy of the same may
write to the Company Secretary.
Conservation of Energy, Technology Absorption, Foreign Exchange
Earnings and Outgo
The Company has no activity relating to conversation of energy or
technology absorption. The Company continued to be a net foreign
exchange earner during the year.
The figures for the foreign exchange earnings and outgo are as follows;
Foreign Exchange Earnings:
Rs.8,616 Lacs (Previous Year Rs.8,090 Lacs)
Foreign Exchange Outgo:
Rs.747 Lacs (Previous Year Rs.615 Lacs)
(Other than in the normal course of the business as Tour Operator and
Foreign Exchange Restricted Authorised Dealer)
Awards and Recognition:
India
- 'Best Outbound Tour Operator' awarded by 10th Hospitality India and
Explore the World Annual International Awards 2014
- Mr. Peter Kerkar, Director, Cox & Kings Ltd was honoured by The
British Travel and Hospitality Hall of Fame as one of the seven
inductees into the Hall of Fame this year
- Cox & Kings Ltd. was chosen as one of the top agents at Emirates
Airlines awards 2014
- Cox & Kings Ltd. was awarded No. 1 position in promoting the Meeting
& Incentive (M&I) groups to Hong Kong between 1 July 2014 and 31
December 2014 by Meetings & Exhibitions Hong Kong (MEHK) - the MICE
division of the HKTB, as part of Top Agent Awards Program (TAAP).
- The Outlook Traveller Awards 2014: Favourite Outbound Tour Operator
- The Outlook Traveller Awards 2014: Favourite Inbound Tour Operator
Subsidiaries
Cox & Kings Travel Ltd., UK
- Telegraph Ultras Awards to Cox & Kings Travel Ltd, for "Best Luxury
Tour Operator - runner-up"
- presented 19 May 2014
- SAVEUR Culinary Travel Awards to Cox & Kings (Worldwide) for
"Outstanding Tour Operator"
- presented 7 October 2014
- British Travel Awards to Cox & Kings Travel Ltd, for "Best Luxury
Holiday Company - Small: Winner"
- 26 November 2014
- British Travel Awards to Cox & Kings Travel Ltd, for "Best Escorted
Tours Holiday Company: Silver Award"
- 26 November 2014
- British Travel Awards to Cox & Kings Travel Ltd, for "Best Holiday
Company to Central & South America
- Small: Silver Award" - 26 November 2014
- British Travel Awards to Cox & Kings Travel Ltd, for "Best Holiday
Company to Southern Asia
- Small: Silver Award" - 26 November 2014
- British Travel Awards to Cox & Kings Travel Ltd, for "Best Holiday
Company to Middle East
- Small: Silver Award" - 26 November 2014
- British Travel Awards to Cox & Kings Travel Ltd, for "Best Holiday
Company to East & Southeast Europe - Small: Bronze Award" - 26 November
2014
- AI Business Excellence Awards 2015 to Cox & Kings Travel Ltd for
"Excellence in Quality Group Tour Operation - UK" - 23 March 2015
PGL
- Studylink achieved ISO 9001 and ISO 14001;
- Preferred Supplier status awarded by the Framework for Student Travel
on Southern Universities Purchasing Consortium (SUPC) and the London
Universities Purchasing Consortium (LUPC).
Meininger
- Recommended by 'Hostelworld' 2014/2015 (Meininger Airport Frankfurt
GmbH, Meininger Amsterdam BV and Meininger Wien GmbH);
- Holidaycheck Award 2014 & 2015 (Meininger Brussels GmbH);
- Most popular hotel in Brussels 2015 (Meininger Brussels GmbH);
- TripAdvisor Certificate of Excellence 2014 (Meininger Airport Hotels
BBI GmbH).
Superbreak
- Travel Weekly Best Accommodation Only Supplier Jan 2014 - Best
Operator UK Holidays Jan 2014
Acknowledgements and Appreciation
Your Directors take this opportunity to thank all investors, customers,
vendors, banks/financial institutions, regulatory and government
authorities and Stock Exchanges for their consistent support and
encouragement to the Company. The Directors also place on record their
sincere appreciation to all employees of the Company for their hard
work, dedication and commitment. The enthusiasm and unstinting efforts
of the employees have enabled the Company to remain at the forefront of
the Industry.
For and on behalf of the Board of Directors
ABM Good
Chairman
Place : Mumbai
Date : 15th May 2015
Mar 31, 2014
Dear Shareholders,
The Directors are pleased to present the 74th Annual Report and the
audited accounts for the financial year ended 31st March, 2014.
Financial Performance
(Rs. in Lacs)
Particulars Standalone Results
2013-14 2012-13
Net Sales & Other income 47,258 39,587
Profit before Taxation 19,295 9,940
Provision for Taxation 8,027 4,601
Profit After Tax 11,268 5,339
Proposed Dividend 1,597 1,586
(inclusive of dividend tax)
Earnings Per Share (Rs.) 8.25 3.91
Dividend
The Directors are pleased to recommend a Dividend of 20% (Rs. 1/- per
equity share of Rs. 5/- each) to be appropriated from the profits of
the financial year ended 31st March, 2014, subject to the approval of
the shareholders at the ensuing Annual General Meeting. The Dividend
will be paid in compliance with applicable regulations. The dividend,
if declared as above, would involve an outflow of Rs. 1,365 Lacs
towards dividend and Rs. 232 Lacs towards dividend tax, resulting in a
total outflow of Rs. 1,597 Lacs.
The dividend will be paid to members whose names appear in the Register
of Members as on 18th September, 2014. In respect of shares held in
dematerialised form, it will be paid to members whose names are
furnished by National Securities Depository Limited and Central
Depository Services ( India) Limited, as beneficial owners as on that
date.
The dividend payout for the year under review has been formulated in
accordance with the CompanyRs.s policy to pay sustainable dividend
linked to long-term performance, keeping in view the Company''s need for
capital for its growth plans and the intent to finance such plans
through internal accruals to the maximum.
Transfer to General Reserve transfer
Pursuant to Companies (Transfer of Profits to Reserves) Rules, 1975,
the Company has transferred Rs. 845 Lacs to General Reserve of the
Company.
Company''s Performance
FY14 has been a good year of consolidation for the Group, with the
India business demonstrating robust performance in key markets of
Outbound holidays & MICE amidst cautious consumer sentiment, while we
also made solid progress in executing our strategy with the various
businesses in Holidaybreak Limited. During the year, we acquired the
balance 26% tranche in Meininger on 30th April, 2013 for Rs. 25,682
Lacs, thereby gaining full control over the business. Hence effective
this date, Meininger business has been consolidated into the Group
financials. In FY14, Cox & Kings Group Net revenues increased 28% to
Rs. 2,30,759 Lacs and Profit after Tax increased by 55% to Rs. 38,317
Lacs.
India Business
During the year, our India business net revenues grew by 13% to Rs.
41,860 Lacs and EBITDA grew by 11% to Rs. 20,703 Lacs. We continue to
solidify our market standing in the outbound holiday market, with
customers preferring us for a wide bouquet of travel destination
choices and warm customer service, delivered across all price points.
In addition, our healthy market share is also due to a superior
distribution network, as we are able to reach out to customers in over
100 towns & cities across India primarily through our 150 franchise,
own stores and call centre network, besides travel agents and internet
presence. We continue to invest into our travel technology platform,
which forms the backbone for the entire India operations.
Our customers have recognized our strengths in product, pricing and
service levels by rewarding us with repeat bookings. An Outbound
package holiday is a high involvement purchase decision for an Indian
family, for reasons such as Visa, Forex, Language barriers, food
preference and large ticket size. Customers expect high service
standards and prefer physical touchpoints to understand the product
offering in more detail and be comfortable with their purchase
decision. Hence the Indian holiday market continues to swing towards
organized tour operators with strong offline presence such as Cox &
Kings, at the expense of the other players, particularly the
unorganized market. The year saw the launch of several innovative
products including the Master Chef Travel Series and FIFA World Cup
Brazil, while the popularity of existing travel campaigns like Amhi
Travelkar and Dubai Shopping Festival grew.
During the year, we cautiously pressed forward with our Corporate
business, selectively grabbing attractive business opportunity in the
MICE segment.
Education Business:
Our key education brands, viz. PGL, NST and Meininger have seen robust
performance during the year. Meininger financials were consolidated
from 30th April, 2013, with the result that Education business Net
revenues grew by 77% to Rs. 86,900 Lacs and EBITDA grew by 67% to Rs.
32,760 Lacs. Like for growth in Education (assuming 100% Meininger in
FY13) was also strong with Revenue growth of 16% and EBITDA growth of
15%.
PGL & NST business in the UK have seen stable performances. In the
core schools business, PGL continues to challenge its weaker
competitors to win market share. In a strategic step for the business,
PGL expanded into Australia opening its first 200 acre 350 bed site
near Melbourne in Jan 2014. The centre is a launch-pad to enter a very
promising Australian market. The initial experience has been very
positive, with the business already seeing good customer reviews with
particular reference to pastoral care delivery, food menu and program
activities.
During the year, C&K completed the acquisition of the remaining 26%
tranche in Meininger in April 2013. C&K also opened its newest 720 bed
hotel in Brussels on 1st May, 2014 marking our 16th hotel unit spread
across 10 European cities. The business continues to enjoy very high
occupancy rates, with each of the hotels being extremely popular with
school tour groups and other young travelers. We have already signed up
for another 3 hotels (Amsterdam, Berlin and Barcelona) totalling to
about 2300 beds which is expected to come on stream in the coming
years.
Camping Business
The business traded well in FY14 with revenues increasing 20% to Rs.
37,900 Lacs and EBITDA growing by 8% to Rs. 15,900 Lacs. During the
year, C&K combined its two flagship brands Eurocamp & Keycamp into one
brand Eurocamp. The two brands existed ever since Keycamp business was
acquired in 1998. The product range, brand positioning, pricing and
target customers for the two brands had significant overlaps, and hence
the "Single Brand Strategy" was considered during FY13 and executed in
FY14 with customers coming into the CY 2014 season (FY15) under a
single brand. Under the exercise, accommodation homes stock,
destinations and other resources were pooled, expected to deliver a
clear positioning, wider product offering and cost efficiencies in the
business. Brand management across Europe would be more efficient
leading to marketing cost reduction. In addition, centralized business
operations, leveraging on scale advantages, would lead to staff and
overhead efficiencies. A refreshed website was launched to support the
strategy which had more dynamic & interactive content, effective
segmentation & personalization and improved sales & booking management.
In Dec 2013, the business disposed off a small sub-brand "Ecamp" within
our portfolio for a consideration of Rs. 685 Lacs. Ecamp''s primary
business was selling third party accommodation homes. It was a non-
core activity line for the Camping business with no synergies with the
flagship brand nor any meaningful contribution to the business profits.
Other International Leisure Businesses
Our International Leisure Businesses comprise of our European
operations (through C&K UK outbound, Hotelbreaks, Explore soft
adventure holidays and inbound operations through CKDMS), Australia,
Dubai, US and Japan. Both Net revenues and EBITDA were flattish for
the year at Rs. 61,100 Lacs and Rs. 20,900 Lacs respectively. However,
if one looked at the performance excluding the Djoser financials (the
business was sold in Feb 2013), the FY14 Net revenues were up 9% and
EBITDA grew 7% over the previous year. The trading performance for our
European businesses has been good in FY14, helped by the improving
economic environment in the region. Superbreak is steadily executing
its strategy of selling more packaged holidays, which improves its
competitive position in the UK market and also average Net revenues per
booking. The expanded product portfolio in the business (in terms of
flights & rail connections, more overseas hotel & attractions
inventory) has enabled the business to sell overseas European
shortbreaks packages to UK customers. Our Dubai operations has
benefited from strong inbound interest into Dubai from Indian
customers, and growing affluence of Dubai customers for outbound
travel. The premium travel business in US has shown a steady growth.
The Australia business saw a muted performance during the year.
Others
In addition to the Leisure, Education and Camping businesses discussed
above, C&K also provides outsourced visa processing services to
diplomatic missions around the world. During the year, we continued our
investments into this business. C&K have recently entered into another
outsourcing of services related to issuance of Visa, OCI and PIO cards,
renunciation / surrender of Indian nationality certificate at Embassy
of India, Washington DC and its Consulates General in the United States
of America with Embassy of India Washington DC.
Information Technology
C&K IT systems have been continuously innovating to get industry best
technology solutions to all our stakeholders. C&K believe that for
service industry like ours, information technology is the key to
success. C&K sees technology more as business driver than business
enabler. We have been able to successfully provide the leading edge to
our business teams with the latest technology solutions.
For our employees, franchisees, call center agents, C&K has designed a
quick servicing tool, where the customer travel solutions can be
designed in almost no time and customers get their quote to decide and
book their travel services instantly. This has helped C&K to improve
its quote turnaround time. This has also increased our call center
booking conversion ratio.
During the year, C&K has also implemented various technology tools to
increase its usage of Social Media to connect with customers directly.
Now, customers can communicate with us easily over various social media
platforms and provide their feedback, inputs on our products, services.
This helps us design our products more customer focused and service our
customers better.
C&K apt technology infrastructure is instrumental in providing round
the clock assistance to its customers with 24 X 7 dedicated voice
support centres.
Human Resource Development
Keeping in mind the highly dynamic nature of travel industry, training,
self-development, team building and team management, personality
enhancement as well as effective & smart selling trainings - both
internal & external, were conducted across major branches of C&K. The
Company undertakes organizational development programs that groom
employees to become leaders in their own right. C&K is also dedicated
towards having its middle and senior management attend external
management programs, which serve as a valuable resource for personal
and interpersonal learning. Employees are regularly trained on new
systems to keep them abreast with latest technology. Trainings like
First Aid and CPR, Self Defense and Safety & Fire Prevention are also
conducted at regular intervals to increase social awareness among
employees.
Through "Employee Connect" programs HR Head connects with the staff of
across grades from a business unit. The group is randomly selected and
the head of department and second level is not included. This provides
an opportunity to staff to share their views /suggestions and thoughts
to improve the work culture in the company.
Consolidated Financial Statements
In accordance with the Accounting Standard AS-21 on Consolidated
Financial Statement read with AS-23 on Accounting for Investments in
Associates and AS-27 on Financial Reporting of Interest in Joint
Ventures, the audited Consolidated Financial Statements are provided in
the Annual Report.
Subsidiaries
In accordance with the General Circular issued by the Ministry of
Corporate Affairs (MCA), Government of India, the Balance sheet,
Statement of Profit and Loss and other documents of the subsidiary
companies are not being attached with the Balance sheet of the Company.
However, the financial information of the subsidiary companies is
disclosed in the Annual Report in compliance with the said circular.
The Company will make available the Annual Accounts of the subsidiary
companies and the related detailed information to any member of the
Company who may be interested in obtaining the same. The annual
accounts of the subsidiary companies will also be kept open for
inspection at the Registered office of the Company and that of the
respective subsidiary companies. The Consolidated Financial Statements
presented by the Company includes the financial results of its
subsidiary companies.
Details of major subsidiaries of the Company and their business
operations during the year under review are covered in the Management''s
Discussion and Analysis Report.
Credit Rating
Credit Analysis & Research Ltd. (CARE), the Rating Agency, has enhanced
the Commercial Paper carved out of sanctioned working capital limit of
the Company from the existing Rs. 200 Crores to Rs. 375 Crores.
CARE has also enhanced the limits for standalone Commercial Paper from
the existing Rs. 200 Crores to Rs. 275 Crores. CARE has assigned ''CARE
A1 '' (A One Plus) rating to the Commercial Paper (CP) of the Company.
Instruments with this rating indicate very strong degree of safety
regarding timely payment of financial obligations and carry lowest
credit risk.
CARE has also enhanced the bank facilities of the Company from existing
Rs. 410.48 Crores to Rs. 560.48 Crores. The Rating has been reaffirmed
as CARE AA- (Double A Minus). Instruments with this rating indicate
very strong degree of safety regarding timely payment of financial
obligations.
Corporate Social Responsibility and Governance Committee
During the year, your directors have constituted the Corporate Social
Responsibility and Governance Committee (CSR&G Committee) comprising of
Ms. Urrshila Kerkar as Chairman, Mr. Peter Kerkar and Mr. S.C. Bhargava
as members.
The said committee has been entrusted with the responsibility of
formulating and recommending to the Board, a Corporate Social
Responsibility Policy (CSR Policy) indicating the activities to be
undertaken by the Company, monitoring the implementation of the
framework of the CSR Policy and recommending the amount to be spent on
CSR activities.
Update on legal proceedings with Indian Railway Catering & Tourism
Corporation (IRCTC) with respect to Royale Indian Rail Tours Limited
The Royale Indian Rail Tours Limited is 50: 50 joint-venture between
IRCTC and the Company. The Supreme Court had directed both the parties
to go for arbitration. The arbitration proceeding has been initiated by
your Company and at present the proceedings are underway as per the
directions of Arbitration Tribunal.
As regard to the CLB petition filed by IRCTC, the said petition is
posted for hearings in July & September 2014.
Directors
The Companies Act, 2013 provides that independent directors shall not
be liable to retire by rotation. Accordingly, all the independent
directors of your Company shall not retire by rotation pursuant to the
provisions of Section 149 of the Companies Act 2013 and are proposed to
be appointed for 5 (five) consecutive years for a terms up to 31st
March, 2019.
The Company has received requisite notices in writing from members
proposing Mr. Pesi Patel, Mr. S.C. Bhargava and Mr. M Narayanan, for
appointment as independent directors. The Company has received
declarations from all the Independent Directors of the Company
confirming that they meet with the criteria of independence as
prescribed both under sub section (6) of section 149 of the Companies
Act 2013 and under clause 49 of the listing agreement with Stock
Exchange.
Mr. Peter Kerkar retires by rotation at the ensuing Annual General
Meeting pursuant to the provisions of Section 152 of Companies Act 2013
and being eligible offers himself for re-appointment.
The brief resume of the aforesaid Directors and other information have
been detailed in the Notice.
Directors'' Responsibility Statement
Pursuant to the requirement under Section 217(2AA) of the Companies
Act, 1956, with respect to Directors''Responsibility Statement, it is
hereby confirmed that:
a) In the preparation of the annual accounts, the applicable accounting
standards have been followed and that there are no material departures
b) The Directors have selected such accounting policies and applied
consistently and judgments and estimates that are reasonable and
prudent so as to give true and fair view of the state of affairs of the
Company as at 31st March, 2014, and of the profit of the Company for
the year ended on that date
c) 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, 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
d) The Directors have prepared the annual accounts of the Company on ''a
going concern basis''.
Auditors and Auditors'' Report
M/s. Chaturvedi & Shah, Chartered Accountants, Statutory Auditors of
the Company, hold office until the conclusion of the ensuing Annual
General Meeting and being eligible, offer themselves for the
re-appointment.
The Company has received a certificate from the Auditors to the effect
that their re-appointment, if made, would be within the prescribed
limits under Section 141(3)(g) of the Companies Act, 2013 and they are
not disqualified for re-appointment.
The notes on Financial Statement referred to in the Auditors'' Report
are self explanatory and does not call for any further comment.
Secretarial Audit Report
As a measure of good Corporate Governance, the Board of Directors of
the Company appointed Mr. Virendra Bhatt, Practicing Company Secretary,
to conduct Secretarial Audit of the Company. The Secretarial Audit
Report confirms that the Company has complied with all the applicable
provisions of the Companies Act, 1956 and Listing Agreements with the
Stock Exchanges. The Secretarial Audit Report for the financial year
ended 31st March, 2014 is provided in the Annual Report.
Fixed Deposits
Your Company has not accepted any fixed deposits within the meaning of
Section 58(A) of the Companies Act, 1956 during the year.
Group
Pursuant to intimation from the Promoters, the names of the Promoters
and entities comprising "group" are disclosed in the Annual Report for
the purpose of the SEBI (Substantial Acquisition of Shares and
Takeovers) Regulations, 1997.
Particulars of Employees
In terms of the provisions of Section 217(2A) of the Companies Act,
1956, read with the Companies (Particulars of Employees) Rules, 1975,
as amended, the names and other particulars of the employees are set
out in the annexure to the Directors'' Report. Having regard to the
provisions of Section 219(1 )(b)(iv) of the said Act, the Annual Report
excluding the aforesaid information is being sent to all the members of
the Company and others entitled thereto. Any member interested in
obtaining such particulars may write to the Company Secretary at the
Registered Office of the Company.
Management''s Discussion and Analysis Report
The Management''s Discussion and Analysis on Company''s performance -
industry trends and other material changes with respect to the Company
and its subsidiaries pursuant to Clause 49 of the Listing Agreement is
presented in a separate section forming part of the Annual Report.
Corporate Social Responsibility
Detailed information on the initiative of the Company towards CSR
activities is provided in this report.
Corporate Governance
The Company is committed to maintain the highest standards of Corporate
Governance and adhere to the Corporate Governance requirements set out
by SEBI. The Report on Corporate Governance as stipulated under Clause
49 of the Listing Agreement forms part of the Report.
The requisite Certificate from the Auditors of the Company confirming
compliance with the conditions of Corporate Governance as stipulated
under the aforesaid Clause 49 is attached to this Report.
Conservation of Energy, Technology Absorption, Foreign Exchange
Earnings and Outgo
The Company has no activity relating to conservation of energy or
technology absorption. The Company continued to be a net foreign
exchange earner during the year.
The figures for the foreign exchange earnings and outgo are as follows;
Awards and Recognition:
India
1. The Outlook Traveller Awards 2014: Favourite Outbound Tour Operator
2. The Outlook Traveller Awards 2014: Favourite Inbound Tour Operator
3. Conde Nast Traveller Readers'' Travel Awards 2013: Favourite
Specialist Tour Operator - 1st Runner-Up
4. International Tourism Conclave Travel Awards (ITCTA) 2013: Best
Outbound Tour Operator
5. World Travel Awards 2013:India''s Leading Tour Operator
6. World Travel Awards 2013: India''s Leading Travel Agency
7. Hospitality India & Explore the World Annual International Awards
2013: Best Outbound Tour Operator
8. TAAI Travel Awards 2013: Best Inbound Tour Operator
9. CNBC Awaaz Travel Awards 2013: Best Company providing Foreign
Exchange in India
10. Award for "Contribution to the Promotion of Taiwan Tourism in 2013"
awarded by Taiwan Tourism
Subsidiaries
Superbreak
* Travel Weekly Best Accommodation Only Supplier Jan
2014 - Best Operator UK Holidays Jan 2014
* SPAA 2013 Best Hotel Booking Company - Best UK Holiday Company
Camping
* British Travel Awards in 2013:
i. Best medium family holiday company
ii. Best medium holiday company to Western Europe
iii. Best overall camping and mobile tour operator in 2013
Explore
* British Travel Awards
i. Best medium holiday company for escorted tours 2013
ii. Best medium holiday company for safari, wildlife and nature 2013
* Travel Bulletin Star Awards
i. Best Adventure/Activity Specialist 2013
PGL
* Quality Mark from the Hospitality Guild for the PGL Hospitality and
Catering Foundation Programme
Meininger
* 2013 Agoda.com Gold Circle Award (MEININGER Berlin Hauptbahnhof Gmbh)
* 2014 Hostelworld.com/Hoscar Awards Best Hostel Large Chain 2014
(MEININGER Group)
Acknowledgements and Appreciation
Your Directors take this opportunity to thank all investors, customers,
vendors, banks/financial institutions, regulatory and government
authorities and Stock Exchanges for their consistent support and
encouragement to the Company. The Directors also place on record their
sincere appreciation to all employees of the Company for their hard
work, dedication and commitment. The enthusiasm and unstinting efforts
of the employees have enabled the Company to remain at the forefront of
the Industry.
For and on behalf of the Board of Directors
Place : Mumbai ABM Good
Date : 30th May, 2014 Chairman
Mar 31, 2013
Dear Shareholders,
The Directors are pleased to present the 73rd Annual Report and the
audited accounts for the financial year ended March 31st, 2013.
Financial Performance
(Rs. in Lacs)
Standalone Results
Particulars 2012-13 2011-12
Net Sales & Other income 39,576 32,760
Profit before Taxation 9,940 10,889
Provision for Taxation 4,601 3,119
Profit After Tax 5,339 7,770
Proposed Dividend 1,586 1,586
(inclusive of dividend tax)
Earnings Per Share (Rs.) 3.91 5.69
Dividend
The Directors are pleased to recommend a Dividend of 20% (Rs. 1/- per
equity share of Rs. 5/- each) to be appropriated from the profits of
the financial year ended March 31st, 2013, subject to the approval of
the shareholders at the ensuing Annual General Meeting. The Dividend
will be paid in compliance with applicable regulations. The dividend,
if declared as above, would involve an outflow of Rs. 1,365 Lacs
towards dividend and Rs. 221 Lacs towards dividend tax, resulting in a
total outflow of Rs. 1,586 Lacs.
The dividend will be paid to members whose names appear in the Register
of Members as on 9th September 2013. In respect of shares held in
dematerialised form, it will be paid to members whose names are
furnished by National Securities Depository Limited and Central
Depository Services (India) Limited, as beneficial owners as on that
date.
The dividend payout for the year under review has been formulated in
accordance with the Company''s policy to pay sustainable dividend linked
to long-term performance, keeping in view the Company''s need for
capital for its growth plans and the intent to finance such plans
through internal accruals to the maximum.
Transfer to General Reserve
Pursuant to Companies (Transfer of Profits to Reserves) Rules, 1975,
the Company has transferred Rs. 401 Lacs to General Reserve of the
Company.
Company''s Performance
This year was a satisfactory year for C&K Group, as the India business
continued its stellar performance, and Holidaybreak Limited was
successfully integrated into the C&K fold and FY''13 being the first
full year since the acquisition in September 2011.
India Business
C&K had another great year in the India business. C&K saw healthy
growth in Outbound and Domestic travel, within both the leisure retail
and corporate MICE category. C&K growth in the leisure retail business
can be attributed to three factors - i) Increased penetration across
Tier I cities and smaller towns owing to deeper distribution network
ii) Increased market share for organized tour operators, as customers
increasingly move away from the unorganized travel agency segment iii)
Repeat business from existing customers as they travel more frequently
than ever before. We are seeing a growing trend of customers taking
multiple weekend breaks during the year, in addition to an annual
holiday thus accelerating growth. Growth in corporate MICE business has
been substantial, as a result of C&K investment into cementing strong
relationships with several respected Indian corporate houses (both
large and mid-sized).
Distribution network:
Talking about the distribution network, C&K franchised network of
stores currently reach more than 70 cities, tapping pent up demand for
high quality holiday experience across international and domestic
destinations at competitive prices. C&K in-house call centre network,
manned by knowledgeable and trained staff, apart from assisting
customers with their various information needs, is now getting better
traction in converting phone and email enquiries into sales. The C&K
web portal is well- equipped to provide comprehensive holiday
information to customers, apart from the ability to book online if the
customer chooses to. Strong distribution has helped C&K expand our
reach within the country.
This wide reach has also made C&K a preferred partner for various
international and domestic tourism boards and other suppliers to
promote newer destinations and holiday experience worldwide.
Information Technology
Information technology systems are critical C&K business. C&K web
enabled centralized dynamic packaging system offers complete travel
solutions to the users for purchasing any item from an airline ticket,
visa, hotel accommodation, logistic support, to a complete tour
package. C&K websites also offers users a choice to purchase any
combination of the above and also design their own holiday. C&K believe
that with the rise in the number of internet users and better
acceptability of the internet as a convenient medium for making travel
related purchases, its technology based business approach is well
positioned to capture a whole new client base.
C&K strives to launch new services & products through its unique
technology initiatives. It also continuously keep innovating the
existing product offerings to meet the changing needs of its customers
and to maintain a distinct quality of services in the fast paced travel
industry. This also helps C&K to differentiate its products vis-a-vis
the products offered by its competitors.
Education Business
It was another good year for C&K key education brands, viz. PGL and
NST. The business further consolidated its market leadership position
in the UK schools market, and is gradually stepping into the public
schools market that is currently catered by the Local Education
Authorities (LEA). The business focused on consolidating its
operations, to reduce costs, particularly during the lean business
period from Oct-Mar. As part of that strategy, PGL closed two smaller
centres, one each in UK and France, totaling 300 beds, successfully
moving the schools business of these two centres into other larger PGL
centres nearby, thereby reducing centre overheads costs without
impacting bookings. Thereby, current PGL bed capacity stands at 8900
beds across 23 centres (including 19 owned centres).
Meininger continued its rapid expansion in the European market. We
opened two new hotels during the year - Berlin airport hotel and
Amsterdam hotel, together about 1200 beds across 375 rooms. Apart from
healthy first year revenues from the two new hotels in FY''13, Meininger
witnessed growth through driving higher occupancies in existing
bedstock. Its deepening ties with leading European student tour
operators resulted in strong uptick from that segment. In addition, its
popularity among youth travelers, looking for clean, affordable
city-centre accommodation, has helped increase business, with bookings
done through internet, phone or walk-ins. During the year, Meininger
closed down two smaller hotels in Berlin (450 beds) and replaced it
with the signing of a larger 830 bed hotel in the same city. As
Meininger gathers momentum in the European youth and student travel
market and attract more traffic, we believe it makes imminent sense to
operate larger hotels resulting in higher margins.
Camping Business
We had mixed results in Camping business this year. The Jun-Aug period
is the key camping holiday season in Europe (coinciding with school
summer holidays). But, Camping customers in UK, which is the highest
yielding market for the business, replaced their annual camping holiday
with the London Olympics, a once-in- a-lifetime experience for most UK
citizens. This resulted in a YoY decline in its revenues. We, however
softened the impact by controlling the employee and marketing expenses
during the business season and subsequent off- peak months. During the
year, we launched a Camping brochure for the Australian market,
distributing the product through our existing distribution network and
met with encouraging response.
Other International Leisure Businesses
The C&K International Business comprises C&K UK outbound, Hotelbreaks,
Explore soft adventure holidays and inbound operations through CKDMS.
We managed a flattish FY''13 performance in Europe despite difficult
economic conditions. In Explore, we consolidated ground handling
operations in key destinations with other C&K operations, driving
better bargains to generate savings. During the year, C&K group
leveraged on Superbreak''s strong supplier relationship in the UK market
(c2000 hotels) to obtain better pricing for its leisure tours. C&K saw
strong growth at its Dubai operations, benefitting from increased
inbound business, driven by key C&K markets of India and Australia. In
addition, the outbound business from Dubai is also seeing good
traction. Business in Australian operations was soft through the year,
achieving marginal growth.
During the year, we concluded the sale of Djoser, our soft adventure
holiday business in Netherlands. Djoser, a small-sized operations
within the Holidaybreak business, was seeing a declining revenue trend
in the face of tough business environment and insufficient synergy
opportunities with Cox & Kings Group. The business was disposed off as
the management time being spent far outweighed any future improvement
in business prospects.
Human Resource Development
C&K draws its strength from a highly engaged and motivated workforce,
whose collective passion and commitment has helped the Company scale
new heights. Individual and organizational capability building
remained one of the strategic focus areas in C&K. C&K undertakes
organizational development programs that groom employees to become
leaders in their own right. C&K is also dedicated towards having its
middle and senior management attend external management programs, which
serve as a valuable resource for personal and interpersonal learning.
Employees are regularly trained on new systems to keep them abreast
with latest technology. Trainings like First Aid and CPR, Self Defense
and Safety & Fire Prevention are also conducted at regular intervals to
increase social awareness among employees. Focused initiatives towards
health and safety and other non-work related employee engagement
programmes helped develop the personality and confidence level of the
employees enhancing their motivation and engagement with the
organisation.
Consolidated Financial Statements
In accordance with the Accounting Standard (AS) -21 on Consolidated
Financial Statement read with AS-23 on Accounting for Investments in
Associates and AS-27 on Financial Reporting of Interest in Joint
Ventures, the audited Consolidated Financial Statements are provided in
the Annual Report.
Subsidiaries
In accordance with the General Circular issued by the Ministry of
Corporate Affairs (MCA), Government of India, the Balance sheet,
Statement of Profit and Loss and other documents of the subsidiary
companies are not being attached with the Balance sheet of the Company.
However, the financial information of the subsidiary companies is
disclosed in the Annual Report in compliance with the said circular.
The Company will make available the Annual Accounts of the subsidiary
companies and the related detailed information to any member of the
Company who may be interested in obtaining the same. The annual
accounts of the subsidiary companies will also be kept open for
inspection at the Registered office of the Company and that of the
respective subsidiary companies. The Consolidated Financial Statements
presented by the Company includes the financial results of its
subsidiary companies.
Details of major subsidiaries of the Company and their business
operations during the year under review are covered in the Management''s
Discussion and Analysis Report.
Credit Rating
Credit Analysis & Research Ltd. (CARE), the Rating Agency, has
reaffirmed the Short Term Rating ''CARE A1 '' (A One Plus) of Commercial
Paper (CP) of the Company. It also enhanced the Commercial Paper issue
carved out of sanctioned working capital limit of the Company from the
existing Rs. 75 Crores to Rs. 200 Crores. Instruments with this rating
indicate very strong degree of safety regarding timely payment of
financial obligations and carry lowest credit risk.
CARE has removed the "Credit Watch" from the long- term rating of the
Company and has revised the long- term rating of the Company to ''CARE
AA- (Double A Minus)'' from the existing rating ''CARE AA'' (Double A).
Instruments with this rating indicate high safety for timely servicing
of debt obligations and carry very low credit risk.
CARE has also re-affirmed and enhanced the short-term bank facilities
of the Company from existing Rs. 45 Crores to Rs. 145 Crores. The
Rating has been reaffirmed as CARE A1 (A One Plus). Instruments with
this rating indicate very strong degree of safety regarding timely
payment of financial obligations.
The Rating Agency has revised the long-term Bank facilities to ''CARE
AA- (Double A Minus)'' from the existing rating ''CARE AA'' (Double A).
The long-term Bank facilities has been enhanced from existing Rs. 75
Crores to Rs. 265.48 Crores. Instruments with this rating indicate high
safety for timely servicing of debt obligations and carry very low
credit risk
Other Developments
Investment by CVCI, Private Equity fund, in Prometheon Holdings (UK)
Limited (PHUK), subsidiary of the Company
Pursuant to an agreement between CVCIGP II Employee Rosehill Limited
and CVCIGP II Client Rosehill Limited ("the Investors") and PHUK, the
investors had subscribed to the preferred shares issued by PHUK thereby
acquiring significant minority stake in PHUK. The investment proceeds
have been largely used to retire part of the debt raised by Prometheon
for the Holidaybreak acquisition.
Update on legal proceedings with Indian Railway Catering & Tourism
Corporation (IRCTC) with respect to Royale Indian Rail Tours Limited
The Royale Indian Rail Tours Limited is 50: 50 joint-venture between
IRCTC and the Company. The Supreme Court had directed both the parties
to go for arbitration. The arbitration proceeding has been initiated.
At present the proceedings are underway as per the directions of
Arbitration Tribunal.
Directors
In accordance with the provisions of the Companies Act 1956 and
Articles and Association of the Company, Mr. Pesi Patel and Mr. S. C.
Bhargava, retire by rotation at the ensuing Annual General Meeting and
being eligible, offer themselves for reappointment. The brief resume of
the aforesaid Directors and other information have been detailed in the
Notice.
Directors'' Responsibility Statement
Pursuant to the requirement under Section 217(2AA) of the Companies
Act, 1956, with respect to Directors'' Responsibility Statement, it is
hereby confirmed that:
a. In the preparation of the annual accounts, the applicable
accounting standards have been followed and that there are no material
departures
b. The Directors have selected such accounting policies and applied
consistently and judgments and estimates that are reasonable and
prudent so as to give true and fair view of the state of affairs of the
Company as at March 31st, 2013, and of the profit of the Company for
the year ended on that date
c. 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, 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
d. The Directors have prepared the annual accounts of the Company on
''a going concern basis''.
Auditors and Auditors'' Report
M/s. Chaturvedi & Shah, Chartered Accountants, Statutory Auditors of
the Company, hold office until the conclusion of the ensuing Annual
General Meeting and being eligible, offer themselves for the
re-appointment. The Company has received a certificate from the
Auditors to the effect that their re-appointment, if made, would be in
accordance with Section 224 (1B) of the Companies Act, 1956 and they
are not disqualified for re-appointment within the meaning of Section
226 of the said Act. Your Directors recommend their re-appointment for
the ensuing year.
The notes on Financial Statement referred to in the Auditors'' Report
are self explanatory and does not call for any further comment.
Secretarial Audit Report
As a measure of good Corporate Governance, the Board of Directors of
the Company appointed Mr. Virendra Bhatt, Practicing Company Secretary,
to conduct Secretarial Audit of the Company. The Secretarial Audit
Report confirms that the Company has complied with all the applicable
provisions of the Companies Act, 1956 and Listing Agreements with the
Stock Exchanges. The Secretarial Audit Report for the financial year
ended March 31st, 2013 is provided in the Annual Report.
Fixed Deposits
Your Company has not accepted any public deposits and, as such, no
amount on account of principal on interest on public deposits was
outstanding as on the date of the Balance Sheet.
Group
Pursuant to intimation from the Promoters, the names of the Promoters
and entities comprising "group" are disclosed in the Annual Report for
the purpose of the SEBI (Substantial Acquisition of Shares and
Takeovers) Regulations, 2011.
Particulars of Employees
In terms of the provisions of Section 217(2A) of the Companies Act,
1956, read with the Companies (Particulars of Employees) Rules, 1975,
as amended, the names and other particulars of the employees are set
out in the annexure to the Directors'' Report. Having regard to the
provisions of Section 219(1)(b)(iv) of the said Act, the Annual Report
excluding the aforesaid information is being sent to all the members of
the Company and others entitled thereto. Any member interested in
obtaining such particulars may write to the Company Secretary at the
Registered Office of the Company.
Management''s Discussion and Analysis Report
The Management''s Discussion and Analysis on Company''s performance -
industry trends and other material changes with respect to the Company
and its subsidiaries pursuant to Clause 49 of the Listing Agreement is
presented in a separate section forming part of the Annual Report.
Corporate Social Responsibility
Detailed information on the initiative of the Company towards CSR
activities is provided in Social Responsibility section of MDA.
Corporate Governance
The Company is committed to maintain the highest standards of Corporate
Governance and adhere to the Corporate Governance requirements set out
by SEBI. The Report on Corporate Governance as stipulated under Clause
49 of the Listing Agreement forms part of the Report.
The requisite Certificate from the Auditors of the Company confirming
compliance with the conditions of Corporate Governance as stipulated
under the aforesaid Clause 49 is attached to this Report.
Conservation of Energy, Technology Absorption, Foreign Exchange
Earnings and Outgo
The Company has no activity relating to conversation of energy or
technology absorption. The Company continued to be a net foreign
exchange earner during the year.
The figures for the foreign exchange earnings and outgo are as follows;
Foreign Exchange Earnings
Rs. 7,812 Lacs (Previous Year- 9,763 Lacs)
Foreign Exchange Outgo
Rs. 663 Lacs (Previous Year- 417 Lacs)
(Other than in the normal course of the business as Tour Operator and
Foreign Exchange Restricted Authorised Dealer)
Awards and Recognition
India
- ''Best Outbound Tour Operator 2012''awarded by CNBC Awaaz.
- ''Best Outbound Tour Operator'' awarded by Hospitality India &
Explore the World Annual International Awards, 2012
- ''Best Travel Company of 2012'' awarded by TAAI Travel Awards, 2012.
- ''Best Domestic Tour Operator'' awarded by TAAI Travel Awards, 2012
- Best International Tour operator for Wildlife of the Year 2012, by
The Travel Operators for Tigers (TOFT)
- ''Best Luxury Operator'' at the 2012 Globe Travel Awards
- PATA Gold Award 2012 in the Marketing Media - Consumer Travel
Brochure (BR) category for its entry, "Luxury Escapades"
- Best Inbound Tour Operator from UK'' awarded by the Ministry of
Tourism, Govt of India (2012-2013)
Subsidiaries
Superbreak
- TTG - Agent Website of the Year (Sept ''12)
- Travel Weekly - Best Operator UK Holidays (Jan ''13)
- Worldchoice - Voted Best UK Operator
- SPAA -2012 - Winner of Best Short Break Operator & Best Hotel
Booking Company
Camping
- British Travel Awards 2012: Best Medium Family Tour Operator
(Eurocamp)
- British Travel Awards 2012: Best Overall Camping and Mobile
Operator (Eurocamp)
- The Camping Division has achieved a five star responsible tourism
classification from AITO, the highest rating achievable
- The Camping Division have FSC certification for using paper from
approved, sustainable sources
Explore
- British Travel Awards 2012: Best Overall Escorted Experience Tour
Operator for Promoting Responsible Tourism
- British Travel Press Award 2012: Travel Editors Green Award of the
Year
- AITO Awards 2012: Best Innovative Sustainable Tourism Initiative
- Travel Trade Awards 2012: Special Interest Tour Operator of the
Year (Travel Agents'' Choice Awards) & Star Adventure/Activity Holidays
Specialist (Travel Bulletin Star Awards)
- Explore has achieved a five star responsible tourism classification
from AITO, the highest rating achievable Regal
- Sport Diver 2012: Best Tour Operator Finalist
- Regal has achieved a three star responsible tourism classification
from AITO
PGL
- Youth Sport Trust Business Awards - Winner 2012 - For outstanding
contribution towards supporting young people through the power of PE
and sport
- French Tourist Board Schools Operator of the year 2012
- Achieved re-certification of the Carbon Saver Gold Standard in
March 2012.
Cox & Kings UK
- Awarded the Best Overseas Tour Operator to India from the UK at the
Indian National Tourism Awards (March, 2013)
- UK''s Compass magazine shortlisted (list of 5) for the Consumer
Travel Publication of the Year at the British Travel Press Awards
(November, 2012)
- Won the "International Tour Operators for Wildlife Promotion" award
for 2012 at the Travel Operators for Tigers (TOFT) awards (October
2012)
Cox & Kings, USA:
- One of the best tour operators in Travel and Leisure''s Best Awards
2012 for Africa.
Acknowledgements and Appreciation
Your Directors take this opportunity to thank all investors, customers,
vendors, banks/financial institutions, regulatory and government
authorities and Stock Exchanges for their consistent support and
encouragement to the Company. The Directors also place on record their
sincere appreciation to all employees of the Company for their hard
work, dedication and commitment. The enthusiasm and unstinting efforts
of the employees have enabled the Company to remain at the forefront of
the Industry.
For and on behalf of the Board of Directors
Place : Mumbai A. B. M. Good
Date : 30th May, 2013 Chairman
Mar 31, 2012
The Directors are pleased to present the 72nd Annual Report and the
audited accounts for the financial year ended March 31, 2012.
Financial Performance
(Rs. in Lacs)
Particulars Standalone Results
2011-12 2010-11
Net Sales & Other income 32,760 25,292
Profit Before Taxation 10,889 11,013
Provision for Taxation 3,119 3,340
Profit After Tax 7,770 7,673
Proposed Dividend
(inclusive of dividend tax) 1,586 794
Earnings Per Share (Rs.) 5.69 5.80
Results of Operation:
The Ministry of Corporate Affairs (MCA) vide Notification no S.O.
447(E) dated 28th February, 201 1 amended the existing Schedule VI to
the Companies Act, 1956. The revised Schedule VI is applicable from
financial year commencing from 1st April, 2011. The financial
statements of your Company for the year ended 31st March, 2012 have
been prepared in accordance with the revised Schedule VI and
accordingly, the previous year's figures have been reclassified
/regroup to conform to this year's classification.
Standalone Financial:
For the year ended March 31, 2012, the standalone revenue from
operations was Rs. 29,578 Lacs, which is a 26% y-o-y growth. Profit
Before Tax was Rs. 10,889 Lacs, which is a decline of 1% from FY 2011.
The PAT for the year was Rs. 7,770 Lacs, which is an increase of 1%
over FY 2011.
Consolidated Financial:
For the year ended March 31, 2012, the Consolidated revenue from
operations was Rs. 83,794 Lacs, PBT before exceptional items was Rs.
9,992 Lacs and Profit for the year was Rs. 4,160 Lacs. Earnings per
share for the year ending March 31, 2012 is Rs. 3.05.
Note: The y-o-y comparison of the Consolidated financials is not the
true reflection of the performance as Holidaybreak Ltd became a
Subsidiary of the Company from 27th September, 2011.
Subsidiaries and Consolidated Financial Statements
The Ministry of Corporate Affairs (MCA) by General Circular No. 2/201
1 dated 8th February, 201 1, had granted an exemption to Companies from
complying with Section 212 of the Companies Act, 1956, provided such
Companies fulfill conditions mentioned in the said circular.
Accordingly, the Board of Directors of your Company at its meeting held
on 13th August, 2012 approved the Audited Consolidated Financial
Statements for the financial year 2011-12 in accordance with the
Accounting Standards issued by the Institute of Chartered Accountants
of India, which include financial information of all its subsidiaries,
and forms part of this report. The Consolidated Financial Statements of
your Company for the financial year 2011-12, have been prepared in
compliance with applicable Accounting Standards and where applicable
Listing Agreement as prescribed by the Securities and Exchange Board of
India.
The annual accounts and financial statements of the Subsidiary
Companies of your Company and related detailed information shall be
made available to Members on request and are open for inspection at the
Registered Office of your Company. Your Company has complied with all
the conditions as stated in the circular and accordingly has not
attached the accounts of the financial year 2011-12. A statement of
summarised financial of all Subsidiaries of your Company including
capital, reserves, total assets, total liabilities, details of
investment, turnover, etc., pursuant to the General Circular issued by
the Ministry of Corporate Affairs, forms part of this report.
Details of major Subsidiaries of the Company are covered in
Management's Discussion and Analysis Report forming part of the Annual
Report.
Dividend
The Directors are pleased to recommend a Dividend of 20% (Re. 1/- per
equity share of Rs. 5/- each) to be appropriated from the profits of
the financial year ended March 31, 2012 subject to the approval of the
Shareholders at the ensuing Annual General Meeting. The Dividend will
be paid in compliance with applicable regulations. The Dividend, if
declared as above, would involve an outflow of Rs. 1,365 Lacs towards
dividend and Rs. 221 Lacs towards dividend tax, resulting in a total
outflow of Rs. 1,586 Lacs.
The dividend payout for the year under review has been formulated in
accordance with the Company's policy to pay sustainable dividend linked
to long term performance, keeping in view the Company's need for
capital for its growth plans and the intent to finance such plans
through internal accruals to the maximum.
Transfer to General Reserve
Pursuant to Companies (Transfer of Profits to Reserves) Rules, 1975,
the Company has transferred Rs. 583 Lacs to General Reserve.
Credit Rating
The Company continue to have 'CARE AI (A One plus)' for its Commercial
Paper (CP) for a maturity not exceeding one year. Instruments with
this rating indicate high safety for timely servicing of debt
obligations and carry very low credit risk.
CARE has placed the rating of 'CARE AA (Double A)' assigned to the long
term instruments/ bank facilities of the Company on 'Credit Watch' in
view of the Company's announcement on July 27th 201 1 of its intention
to acquire 100% equity stake in Holidaybreak Plc.
Capital Structure: Sub-Division of Equity Shares:
Pursuant to the approval of the Members dated June 7, 2011, the face
value of the equity shares of the Company were sub-divided from Rs.
10/- each paid-up per equity share into two equity shares of Rs. 5/-
each paid-up.
The equity capital structure of the Company pursuant to the subdivision
of equity shares stands as under:
Shares Face Value Total
(Rs.) (Rs.)
Authorised 220,000,000 5/- 1,100,000,000
Equity Capital
Issued, Subscribed 136,527,890 5/- 682,639,450
& Paid up Equity
Capital
Pursuant to the sub division of shares, National Securities Depository
Limited (NSDL) vide its letter dated NSDL/II/SM/JNG/ 10593/2010 dated
June 17, 2011 issued a new ISIN for securities of the Company -
INE008I0I026
Other Developments
Acquisition
During the year under review, your Company has successfully completed
acquisition of Holidaybreak Limited; a UK based Travel Company, through
its wholly owned subsidiary, Prome the on Holdings (UK) Ltd, a special
purpose vehicle, incorporated for the said purpose.
The GBP 323.43 million acquisition was completed by way of a
court-sanctioned scheme of arrangement under Part 26 of the UK
Companies Act 2006 (the "Scheme"). The Scheme was declared effective by
the High Court of Justice in England and Wales (the "Court") on
September, 27 201 1. Accordingly with effect from 27th September, 2011,
Holidaybreak Limited become the wholly owned subsidiary of the Company.
Under the terms of the acquisition, Holidaybreak Shareholders received
432.1 pence in cash per Holidaybreak share.
Holidaybreak is an education and activity travel group which provides
educational and activity trips for school children as well as worldwide
adventure holidays, short breaks in the UK and Europe, and mobile-home
and camping holidays on sites throughout Europe. The group has four
operating divisions: Education Adventure, Hotel Breaks, Camping, which
have leading positions in the UK and other major European markets, and
has more than 15 long-established and widely recognised brands.
Royale Indian Rail Tours Limited
The Royale Indian Rail Tours Limited is a 50:50 joint venture between
Indian Railway Catering & Tourism Corporation and the Company. The
Supreme Court has dismissed the Special Leave Petition filed by the
Company and has directed both the parties to go for arbitration which
commenced on 6th July 2012. Supreme Court has also stated that the
observation made by the Courts shall not, in any way, influence the
outcome of the arbitral proceedings, if resorted to the parties.
Directors
The term of Ms. Urrshila Kerkar as the Whole Time Director of the
Company for a period of 5 years will expire on 31st August, 2012. Your
Directors at its meeting held on 13th August, 2012, re- appointed her
for a further period of 5 years with effect from 1 September, 2012. In
compliance with the provisions of Section 309 and 310 read with
Schedule XIII of the Act, the re-appointment of Ms. Urrshila Kerkar as
Whole Time Director for a further period of 5 years is placed before
the Members in the ensuing Annual General Meeting for their approval.
In accordance with the provisions of the Companies Act 1956, and
Articles of Association of the Company, Mr. A. B. M Good and Mr.
Mahalinga Narayanan, retire by rotation at the conclusion of the
forthcoming Annual General Meeting and being eligible, offer themselves
for re-appointment. The brief resume of the aforesaid Directors and
other information have been detailed in the Corporate Governance Report
forming part of this report.
Directors' Responsibility Statement
Pursuant to the requirement under Section 21 7 (2AA) of the Companies
Act, 1956, with respect to Directors' Responsibility Statement, it is
hereby confirmed that:
a) In the preparation of the annual accounts, the applicable accounting
standards have been followed and that there are no material departures;
b) the Directors have selected such accounting policies and applied
consistently and judgments and estimates that are reasonable and
prudent so as to give true and fair view of the state of affairs of the
Company as at March 31, 2012 and of the profit of the Company for the
year ended on that date;
c) 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, 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 & records and ;
d) the Directors have prepared the annual accounts of the Company on 'a
going concern basis'.
Auditors and Auditors' Report
M/s. Chaturvedi & Shah, Chartered Accountants, Statutory Auditors of
the Company, hold office until the conclusion of the ensuing Annual
General Meeting and being eligible, offer themselves for the
re-appointment. The Company has received a certificate from the
Auditors to the effect that their re-appointment, if made, would be in
accordance with Section 224 (IB) of the Companies Act, 1956 and they
are not disqualified for re-appointment within the meaning of Section
226 of the said Act. Your Directors recommend their re-appointment for
the ensuing year.
Fixed Deposits
Your Company has not accepted any fixed deposits within the meaning of
Section 58 (A) of the Companies Act, I956 during the year.
Group
Pursuant to intimation from the Promoters, the names of the Promoters
and entities comprising "group" are disclosed in the Annual Report for
the purpose of the SEBI (Substantial Acquisition of Shares and
Takeovers) Regulations, 1997.
Particulars of Employees
In terms of the provisions of Section 217 (2A) of the Companies Act,
1956, read with the Companies (Particulars of Employees) Rules, 1975,
as amended, the names and other particulars of the employees are set
out in the annexure to the Directors' Report. Having regard to the
provisions of Section 219 (1) (b) (iv) of the said Act, the Annual
Report excluding the aforesaid information is being sent to all the
Members of the Company and others entitled thereto. Any member
interested in obtaining such particulars may write to the Company
Secretary at the Registered Office of the Company.
Management's Discussion and Analysis Report
The Management's Discussion and Analysis on Company's performance -
industry trends and other material changes with respect to the Company
and its Subsidiaries pursuant to Clause 49 of the Listing Agreement is
presented in a separate section forming part of the Annual Report.
Corporate Social Responsibility
Detailed information on the initiative of the Company towards CSR
activities form part of this report.
Corporate Governance
The Company is committed to maintain the highest standards of Corporate
Governance and adhere to the Corporate Governance requirements set out
by SEBI. The Report on Corporate Governance as stipulated under Clause
49 of the Listing Agreement forms part of the Report.
The requisite Certificate from the Auditors of the Company confirming
compliance with the conditions of Corporate Governance as stipulated
under the aforesaid Clause 49 is attached to this Report.
Secretarial Audit Report
As a measure of good Corporate Governance, the Board of Directors of
the Company appointed Mr. Virendra Bhatt, Practicing Company Secretary,
to conduct Secretarial Audit of the Company.
The Secretarial Audit Report confirms that the Company has complied
with all the applicable provisions of the Companies Act, 1956 and
Listing Agreements with the Stock Exchanges. The Secretarial Audit
Report for the financial year ended March 3 1, 2012 is provided in the
Annual Report.
Conservation of Energy, Technology Absorption, Foreign Exchange
Earnings and Outgo
The Company has no activity relating to conservation of energy or
technology absorption. The Company continued to be a net foreign
exchange earner during the year.
The figures for the foreign exchange earnings and outgo are as follows;
(Other than in the normal course of the business as Tour Operator and
Foreign Exchange Restricted Authorised Dealer)
Awards and Recognition:
- Best Luxury Operator' at the 2012 Globe Travel Awards.
- PATA Gold Award 2012 in the Marketing Media - Consumer Travel
Brochure (BR) category for its entry, "Luxury Escapades".
- Ranked 'No. 2' Specialist Tour Operator on Conde Nast Traveller's
Reader's Choice Awards 2011.
- 'Best Outbound Tour Operator of the Year' awarded by TAAI Travel
Awards 2011.
- Ranked "No. 6" on the Travel Leisure World's Best Awards 2011 list
of Top 25 Tour Operators and Safari Outfitters.
- CNBC Awaaz Travel Award 201 1 in the category of India going Global.
- "Specialist - Best All Inclusive Travel Operator" awarded by the
British Travel Awards 2011.
- "Best Outbound Tour Operator" awarded by Hospitality India & Explore
the World Annual International Awards 2011
- "Most Entrepreneurial Travel Company" awarded by TTG Travel Awards in
October 2011.
- "The Best Travel Company for Customer Satisfaction" awarded by
Today's Traveller in August 2011.
- Runners up in the 'Specialist Tour Operator' category of the
Telegraph Travel Awards 2011
- "Best Use of Direct Marketing" awarded by Travel Marketing Awards
2011
Acknowledgements and Appreciation
Your Directors take this opportunity to thank all investors, customers,
vendors, banks/financial institutions, regulatory and government
authorities and Stock Exchanges for their consistent support and
encouragement to the Company. The Directors also place on record their
sincere appreciation to all employees of the Company for their hard
work, dedication and commitment. The enthusiasm and unstinting efforts
of the employees have enabled the Company to remain at the forefront of
the Industry.
For and on behalf of the Board of Directors
A. B. M. Good
Chairman
Place: Mumbai
Date: August 13, 2012
Mar 31, 2011
Dear Shareholders,
The Company's Directors are pleased to present the 71st Annual Report
of the Company along with the audited accounts for the year ended March
31, 2011.
Financial Performance Summary
(Rs. in Lacs)
Particulars Standalone Results
2010-11 2009-10
Net Sales & Other income 25,292 18,203
Profit Before Taxation 11,012 7,550
Provision for Taxation 3,340 2,544
Profit After Tax 7,672 5,006
Proposed Dividend 793 734
(inclusive of dividend tax)
Earnings Per Share (Rs.) 11.60 9.77
Dividend
Your Directors are pleased to recommend a Dividend of 10% (Re. 1/- per
equity share of Rs. 10/- each) to be appropriated from the profits of
the year 2010-11 subject to the approval of the shareholders at the
ensuing Annual General Meeting. The Dividend will be paid in
compliance with applicable regulations.
The dividend, if declared as above, would involve an outflow of Rs.
682.64 Lacs towards dividend and Rs. 110.74 Lacs towards dividend tax,
resulting in a total outflow of Rs. 793.38 Lacs.
The dividend payout for the year under review has been formulated in
accordance with the Company's policy to pay sustainable dividend linked
to long term performance, keeping in view the Company's need for
capital for its growth plans and the intent to finance such plans
through internal accruals to the maximum.
Credit Rating
Credit Analysis & Research Ltd (CARE), the Rating Agency has revised
and enhanced the long term rating of the Company to 'CARE AA (Double
A)' of Non - Convertible Debenture (NCD) of the Company amounting to
Rs. 800 crores. Instruments with this rating indicate high safety for
timely servicing of debt obligations and carry very low credit risk.
CARE has also reaffirmed 'PR1 (PR One plus)' of Commercial Paper (CP)
amounting to Rs. 150 crores, for a maturity not exceeding one year.
Instruments with this rating indicate strong capacity for timely
payment of short-term debt obligations and carry lowest credit risk.
Change in Capital Structure
Issue of Global Depository Receipts (GDRs)
During the year under review, your Company successfully completed the
issue of 53,41,003 GDRs underlying the equity shares of the Company
with face value of Rs. 10/- each. The issue price of GDRs was US$ 12.17
( Rs. 569.17). The GDRs were listed on Luxembourg Stock Exchange on
August 24, 2010 and traded on the EURO MTF segment of the Luxembourg
Stock Exchange. Citibank N.A. New York, NYADR Department is the
Depository and Citibank, N.A. (Mumbai) is the Custodian of all the
equity shares underlying the GDRs issued by the Company.
Each GDR represents one underlying equity share of the Company. GDR is
not time bound instrument and can be surrendered any time and converted
into underlying equity shares of the Company. The shares so released in
favor of the investor upon surrender of the GDRs can either be held by
the investors concerned in their name or sold off in the Indian
secondary market for cash. To the extent of the shares so sold in
Indian markets, GDRs can be reissued under the available headroom.
Outstanding GDRs
The total number of GDRs outstanding as on March 31, 2011 are 2,333,334
constituting 3.42% of the paid up share capital of the Company.
Utilisation of IPO Proceeds
As on March 31, 2011, amount raised through public issue has been
utilised by the Company toward the following objects of the issue:
(Rs. in Lacs)
Sr. Particulars Utilisation
No.
1 Repayment of Loans 12,844.00
2 Acquisitions & Other Strategic 2,000.00
Initiatives
3 Investment in Overseas Subsidiaries 2,011.18
4 Investment in Corporate Office & 602.37
Upgrading our existing Operations
5 General Corporate Purposes 4,557.00
6 Meeting Fresh Issue related Expenses 5,817.38
Total 27,831.93
Pending utilisation, the balance proceeds have been temporarily
invested in Mutual Funds and Fixed Deposit.
Utilisation of GDR Proceeds
As on March 31, 2011, the amount raised through GDRs issue has remained
unutilised and the same has been temporarily invested in fixed deposits
and fixed deposit through subsidiary.
Consolidated Financial Statements
The Company reported consolidated income from operations for 2010-11 of
Rs. 49,673.91 Lacs, posting a growth of 24% over Rs. 39,915.40 Lacs in
the previous year, with strong growth globally in all major markets.
EBITDA for FY 2011 rose by 23% to Rs. 23,006.51 Lacs as against Rs.
18,643.68 Lacs in the last fiscal year. As required under the listing
agreement with the Stock Exchanges, Consolidated Financial Statements
of the Company are attached.
Subsidiary Companies
Pursuant to the provisions of 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 granted a general exemption subject
to certain conditions to holding companies from complying with the
provisions of Section 212 of the Act which requires the attaching of
the Balance Sheet, Profit & Loss Account and other documents of its
subsidiaries companies to its Balance Sheet. Accordingly, the said
documents are not being included in this Annual Report.
The Company will make available these documents upon request by any
member of the Company interested in obtaining the same. However, as
directed by the Central Government, the financial data of the
subsidiaries have been furnished under financial information of
Subsidiary Companies forming part of the Annual Report. Further, the
Consolidated Financial Statement prepared in accordance with the
Accounting Standard AS-21 on "Consolidated Financial Statements" read
with Accounting Standard AS-23 on "Accounting for Investments in
Associates in Consolidated Financial Statements and AS- 27 on
"Financial Reporting of Interest in Joint Venture", are provided in the
Annual Report.
Details of Subsidiaries of the Company are covered in Management's
Discussion and Analysis Report forming part of the Annual Report.
Investments in Direct Subsidiaries
During the year under review, your Company had invested an aggregate of
Rs. 20,476.04 Lacs as loan, in its Direct Subsidiaries Cox & Kings (UK)
Ltd, Cox & Kings Singapore Private Limited, Cox & Kings Asia Pacific
Private Limited, Cox & Kings (Japan) Limited, Quoprro Global Ltd,
Clearmine Limited, Quoprro Global Services Pvt Ltd and Cox & Kings
(Australia) Pty Ltd.
Incorporation of New Subsidiaries and Branch offices
During the year under review, your Company has incorporated 3 new
subsidiaries namely Cox and Kings Global Services Private Limited, Cox
and Kings Asia Pacific Private Limited and Prometheon Holdings Private
Limited. The main object of Cox and Kings Global Services Private
Limited, is to provide comprehensive visa processing services to
diplomatic missions. Cox and Kings Asia Pacific Private Limited was
incorporated to establish the presence of Company business in Asia
Pacific region.
Your Company has also set up a Branch office in Taipei City, Taiwan
Republic of China. Taiwan Branch shall provide travel services from
Taiwan Republic of China, Hong Kong and South East Asia to India,
Middle East and Europe as a Land Operator to local Travel Agencies.
All the subsidiaries of the Company are unlisted and none of them are
material unlisted Subsidiaries as per Clause 49 of the Listing
Agreement.
Directors' Re-appointment
Mr. Peter Kerkar and Mr. Pesi Patel, retire by rotation and being
eligible offer themselves for reappointment at this Annual General
Meeting.
Your Directors recommended their re-appointment at the ensuing Annual
General Meeting.
Auditors and Auditors' Report
M/s. Chaturvedi & Shah, Chartered Accountants (Reg. No. 101720W),
Statutory Auditors of the Company, hold office until the conclusion of
the ensuing Annual General Meeting and being eligible, offer themselves
for the re-appointment. The Company has received a certificate from
the Auditors to the effect that their re-appointment, if made, would be
in accordance with Section 224 (1B) of the Companies Act, 1956.
The Notes on Accounts referred to in the Auditors' Report are
self-explanatory and do not call for any further comments.
Secretarial Audit Report
As a measure of good Corporate Governance, the Board of Directors of
the Company had appointed Mr. Virendra Bhatt, Practicing Company
Secretary, to conduct Secretarial Audit of the Company.
The Secretarial Audit Report confirms that the Company has complied
with all the applicable provisions of the Companies Act, 1956,
Depositories Act, 1996, Listing Agreements with the Stock Exchanges,
Securities Contracts (Regulation) Act, 1956 and all the Regulations and
Guidelines of SEBI as applicable to the Company, including the
Securities and Exchange Board of India (Substantial Acquisition of
Shares and Takeovers) Regulations, 1997 and Securities and Exchange
Board of India (Prohibition of Insider Trading) Regulations, 1992.
The Secretarial Audit Report for the financial year ended March 31,
2011 is provided in the Annual Report.
Group
Pursuant to intimation from the Promoters, the names of the Promoters
and entities comprising "group" are disclosed in the Annual Report for
the purpose of the SEBI (Substantial Acquisition of Shares and
Takeovers) Regulations, 1997.
Directors' Responsibility Statement
Pursuant to the requirement under Section 217 (2AA) of the Companies
Act, 1956, with respect to Directors' Responsibility Statement, it is
hereby confirmed that:
a) in the preparation of the annual accounts for the year ended March
31, 2011, the applicable accounting standards read with requirements
set out under Schedule VI to the Companies Act, 1956, have been
followed and that no material departures are made from the same;
b) the Directors have selected such accounting policies and applied
consistently and judgments and estimates that are reasonable and
prudent so as to give true and fair view of the state of affairs of the
Company as at March 31, 2011 and of the profit of the Company for the
period ended on that date;
c) 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, to the
best of its knowledge and ability. There are however, inherent
limitations, which should be recognised while relying on any system of
internal control and records and;
d) the Directors have prepared the annual accounts of the Company on 'a
going concern basis'.
Particulars of Employees
In terms of the provisions of Section 217 (2A) of the Companies Act,
1956, read with the Companies (Particulars of Employees) Rules, 1975,
as amended, the names and other particulars of the employees are set
out in the annexure to the Directors' Report. Having regard to the
provisions of Section 219(1)(b)(iv) of the said Act, the Annual Report
excluding the aforesaid information is being sent to all the members of
the Company and others entitled thereto. Any member interested in
obtaining such particulars may write to the Company Secretary at the
registered office of the Company.
Management's Discussion and Analysis Report
The Management's Discussion and Analysis on Company's performance Ã
industry trends and other material changes with respect to the Company
and its subsidiaries pursuant to Clause 49 of the Listing Agreement is
presented in a separate section forming part of the Annual Report.
Corporate Social Responsibility
Corporate Social Responsibility (CSR) encompasses much more than social
outreach programs and is an integral part of the way the Company
conducts its business. Detailed information on the initiative of the
Company towards CSR activities is forming part of this report.
Formation of Cox & Kings Foundation
To participate in alleviating the socioÃeconomic status of the society,
your Company has established "Cox & Kings Foundation". The core areas
on which the "Cox & Kings Foundation focuses are relief of poor,
education, medical relief and advancement of similar objects of general
and social welfare.
Corporate Governance
Your Company believes Corporate Governance is at the heart of
Shareholder value creation. The Board has also evolve and adopted a
Code of Conduct based on the principles of Good Corporate Governance
and best management practices being followed globally. The code is
available on the website of the Company www.coxandkings.com. A report
on the Corporate Governance in term of Clause 49 of the Listing
Agreement with Stock Exchanges along with the Auditors' Certificate on
its compliance forms part of this report.
Fixed Deposits
Your Company has not accepted any fixed deposits within the meaning of
Section 58(A) of the Companies Act, 1956 during the year.
Conservation of Energy, Technology Absorption, Foreign Exchange
Earnings and Outgo
The Company has no activity relating to conversation of energy or
technology absorption.
The Company continued to be a net foreign exchange earner during the
year.
The figures for the foreign exchange earnings and outgo are as follows:
Foreign Exchange Earnings:
Rs. 9,358.05 Lacs (Previous Year- Rs. 10,008.27 Lacs)
Foreign Exchange Outgo:
Rs 265.70 Lacs (Previous Year- Rs. 344.31 Lacs)
(Other than in the normal course of the business as Tour Operator and
Foreign Exchange Restricted Authorised Dealer)
Awards and Recognition during the year under review:
1. "India's Leading Destination Management Company" awarded by the
World Travel Awards 2010.
2. CNBC Awaaz Travel Award 2010 for "Taking India Global".
3. "Best Outbound Tour Operator" awarded by Hospitality India and
Explore the World Annual International Awards 2010.
4. "First Runner Up" in the Best Large Tour Operator category awarded
by the Telegraph Ultra Travel luxury survey UK 2010.
5. "First Runner Up" in the Favourite Tour Operator category awarded
by Condé Nast Traveller Readers' Choice Awards (2010).
6. "Most Admired Tour Operator 2010" awarded by SATTE (2010).
Acknowledgements and Appreciation
Your Directors take this opportunity to thank all investors, customers,
vendors, banks/financial institutions, regulatory and government
authorities and Stock Exchanges for their consistent support and
encouragement to the Company. The Directors also place on record their
sincere appreciation to all employees of the Company for their hard
work, dedication and commitment. The enthusiasm and unstinting efforts
of the employees have enabled the Company to remain at the forefront of
the Industry.
For and on behalf of the Board of Directors
A. B. M. Good
Chairman
Mumbai, 30th May, 2011
Mar 31, 2010
The Companys Directors are pleased to present the 70th Annual Report
of the Company along with the audited accounts for the year ended March
31, 2010.
Financial Performance
(Rs. in Lacs)
Standalone
Results
2009-10 2008-09
Net Sales & Other income 18,203 16,137
Profit before Taxation 7,550 6,091
Provision for Taxation 2,543 2,270
Profit After Tax 5,006 3,822
Proposed Dividend 734 65
(inclusive of dividend tax)
Earnings Per Share (Rs.) 9.77 8.82
Dividend
Your Directors are pleased to recommend a Dividend of 10% (Re. 1/- per
equity share of Rs. 10/- each) to be appropriated from the profits of
the year 2009- 10 subject to the approval of the shareholders at the
ensuing Annual General Meeting. The Dividend will be paid in compliance
with applicable regulations.
The dividend, if declared as above, would involve an outflow of Rs.
629.23 Lacs towards dividend and Rs. 104.51 Lacs towards dividend tax,
resulting in a total outflow of Rs. 733.74 Lacs.
The dividend payout for the year under review has been formulated in
accordance with the Companys policy to pay sustainable dividend linked
to long term performance, keeping in view the CompanyÃs need for
capital for its growth plans and the intent to finance such plans
through internal accruals to the maximum.
Change of Name
In the past few years, your Company has expanded its business across
many countries and has now attained the status of being a global
company with significant presence in various Countries. To refect its
true status, the name of your Company has changed to Cox & Kings
Limited.
A fresh Certificate of Incorporation was received from the Registrar of
Companies dated 29th July 2010 pursuant to the change of name of the
Company from Cox and Kings (India) Limited to Cox & Kings Limited.
Change in Capital Structure
Rights Issue
The Company, on 25th June 2009, opened the Rights issue of 19,547,682
equity shares with a face value of Rs. 10/- each for cash aggregating
to Rs. 19,5476,820/- to the existing shareholders of the Company on
Rights Issue basis in the ratio of 7 Rights equity shares for every 10
equity shares held on the record date i.e. 19th June 2009. The issue
was successfully closed on 22nd July 2009.
Initial Public Offering
During the year under review, your Company successfully completed the
Initial Public Offering of its securities. The issue comprised of
18,496,640 equity shares (15,450,000 being the fresh issue of equity
shares and 3,046,640 being the offer for sale) of Rs. 10/- each at a
premium of Rs. 320 per share. The issue was over-subscribed by 5.64
times. The shares were listed on Bombay Stock Exchange Limited and
National Stock Exchange Limited on 11th December 2009.
Accordingly, following shares were allotted during the year under
review:
(In Rs.)
Sr. Details of Issue No. of shares Premium Equity Capital
No allotted Post Issue
1. Rights Issue 19,547,682 Nil 474,729,420
equity shares
2. Public Issue 15,450,000 320 629,229,420
equity shares
Utilisation of IPO Proceeds
As on March 31, 2010, amount raised through public issue has been
utilised by the Company toward the following objects of the issue:
(Rs. in Lacs)
Sr.
Particulars Utilisation
No.
1 Repayment of Loans 8,470.00
Acquisitions & Other Strategic 2 1,600.00
Initiatives
3 Investment in Overseas Subsidiaries 887.00
Investment in Corporate Office & 203.00
4 Upgrading our existing Operations
5 General Corporate Purposes 4,557.00
6 Meeting Fresh Issue related 5,817.38
Expenses
Total 21,534.38
Pending utilisation, the balance proceeds have been temporarily
invested in Mutual Funds, Fixed Deposit and Bank Accounts.
Credit Rating
Credit Analysis & Research Ltd (CARE), the Rating Agency, has
reaffirmed ÃPR1+ (PR One plus)Ã to Commercial Paper (CP) issue of the
Company amounting to Rs. 150 crore, for a maturity not exceeding one
year. Instruments with this rating indicate strong capacity for timely
payment of short- term debt obligations and carry lowest credit risk.
CARE has also revised the long term rating to ÃCARE AA Ã (Double A
minus)Ã to Non - Convertible Debenture (NCD) issue of the Company
amounting to Rs. 300 crore. Instruments with this rating indicate high
safety for timely servicing of debt obligations and carry very low
credit risk.
Subsidiary Companies
Ministry of Corporate Affairs, Government of India has granted approval
that the requirement to attach various documents in respect of
subsidiary companies, as set out in sub-section (1) of Section 212 of
the Companies Act, 1956, shall not apply to the Company. Accordingly,
the Audited Statements of Accounts and the Auditorsà Reports thereon
for the year ended 31st March 2010 along with the Reports of the Board
of Directors of the CompanyÃs subsidiaries have not been annexed. The
Company will make available these documents upon request by any member
of the Company interested in obtaining the same. However, as directed
by the Central Government, the financial data of the subsidiaries have
been furnished under à Subsidiary Companiesà Particulars forming part
of the Annual Report. Further pursuant to Accounting Standard 21 issued
by the Institute of Chartered Accountants of India, Consolidated
Financial Statements presented by the Company in this Annual Report
include the financial information of its subsidiaries.
Investments in direct subsidiaries
As on 31st March, 2010 your Company had invested an aggregate of Rs.
5273.56 Lacs as loan, in its direct subsidiaries Cox & Kings Ltd, UK,
Cox & Kings Singapore Private Limited, Clearmine Limited UK, Quoprro
Global Services, UK, Quoprro Global Services Private Limited and Cox &
Kings (Australia) Pty Ltd.
Incorporation of New Subsidiaries
During the year under review, your Company has invested Rs. 22.22 Lacs
in Quoprro Global Services UK, a 100% subsidiary of the Company. The
main object of Quoprro Global Services UK is to provide comprehensive
visa processing services to diplomatic missions.
Mergers and Acquisitions
Your Company continued to pursue the strategy of acquiring businesses
which complement our service offerings, provide access to niche skill
sets and expand our presence in select geographies.
In April 2009, we completed acquisition of East India Travel Company
Inc, which is in the business of selling upmarket tour and travel
packages in the United States of America. East India Travel Company Inc
was acquired by our step-down subsidiary in UK, Cox & Kings Travel
Limited.
In December 2009, Cox & Kings (Australia) Pty Ltd, a wholly owned
subsidiary of the Company has acquired 100% shares of My Planet
Australia Pty Limited & Bentours International Pty Limited, through
share sale agreement from First Choice Holdings Australia Pty Ltd, a
European tourism group which is part of the TUI Travel Plc Group of
Companies. The acquisition has been done through an earn-out mechanism.
The business of the acquired companies is currently trading under the
brand MyBentours for its wholesale FIT & leisure groups to Scandinavia
and has a well- established retail operation.
All the subsidiaries of the Company are unlisted and none of them are
material unlisted subsidiaries as per Clause 49 of the Listing
Agreement.
Consolidated Financial Statements
In accordance with the Accounting Standard AS- 21 on Consolidated
Financial Statements read with Accounting Standard AS-23 on Accounting
for Investments in Associates and AS-27 on Financial Reporting of
Interest in Joint Ventures, the Consolidated Financial Statements are
provided in the Annual Report.
Directors Re-appointment
Articles of Association of the Company provide that at least two-thirds
of our Directors shall be subject to retirement by rotation. One third
of these retiring Directors must retire from office at each Annual
General Meeting of the shareholders. A retiring Director is eligible
for re-election. Ms. Urrshila Kerkar and Mr. S.C. Bhargava, retire by
rotation and being eligible offer themselves for reappointment at this
Annual General Meeting.
Your Directors recommend their re-appointment at the ensuing Annual
General Meeting.
Auditors and Auditors Report
M/s. Chaturvedi & Shah, Chartered Accountants, Statutory Auditors of
the Company, hold office until the conclusion of the ensuing Annual
General Meeting and being eligible, offer themselves for the re-
appointment. The Company has received a certificate from the auditors
to the effect that their re-appointment, if made, would be in
accordance with Section 224 (1B) of the Companies Act, 1956.
The Notes on Accounts referred to in the Auditorsà Report are
self-explanatory and do not call for any further comments.
Group
Pursuant to intimation from the Promoters, the names of the Promoters
and entities comprising "group" are disclosed in the Annual Report for
the purpose of the SEBI (Substantial Acquisition of Shares and
Takeovers) Regulations, 1997.
Directors Responsibility Statement
Pursuant to the requirement under Section 217(2AA) of the Companies
Act, 1956, with respect to Directors Responsibility Statement, it is
hereby confirmed that:
a) In the preparation of the annual accounts for the year ended March
31, 2010, the applicable accounting standards read with requirements
set out under Schedule VI to the Companies Act, 1956, have been
followed and that no material departures are made from the same;
b) The Directors have selected such accounting policies and applied
consistently and made judgments and estimates that are reasonable and
prudent so as to give true and fair view of the state of affairs of the
Company as at March 31, 2010 and of the profit of the Company for the
year ended on that date;
c) The Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 1956 for safeguarding the assets of
the Company and for preventing and detecting fraud and other
irregularities; and
d) The Directors have prepared the annual accounts of the Company on Ãa
going concern basisÃ.
Particulars of Employees
In terms of the provisions of Section 217(2A) of the Companies Act,
1956, read with the Companies (Particulars of Employees) Rules, 1975,
as amended, the names and other particulars of the employees are set
out in the annexure to the Directors Report. Having regard to the
provisions of Section 219(1)(b) (iv) of the said Act, the Annual Report
excluding the aforesaid information is being sent to all the members of
the Company and others entitled thereto. Any member interested in
obtaining such particulars may write to the Company Secretary at the
registered office of the Company.
Managements Discussion and Analysis Report
The Managements Discussion and Analysis on Companys performance -
industry trends and other material changes with respect to the Company
pursuant to Clause 49 of the Listing Agreement is presented in a
separate section forming part of the Annual Report.
Corporate Social Responsibility
Corporate Social Responsibility (CSR) encompasses much more than social
outreach programs and is an integral part of the way the Company
conducts its business. Detailed information on the initiative of the
Company towards CSR activities is form part of this report.
Corporate Governance
Your Company believes Corporate Governance is at the heart of
Shareholder value creation. The Board has also evolved and adopted a
Code of Conduct based on the principles of Good Corporate Governance
and best management practices being followed globally. The code is
available on the website of the Company www.coxandkings.com. A report
on the Corporate Governance in term of clause 49 of the Listing
Agreement with Stock Exchanges along with the Auditorsà Certificate on
its compliance forms part of this report.
Fixed Deposits
Your Company has not accepted any fixed deposits within the meaning of
Section 58(A) of the Companies Act, 1956 during the year.
Conservation of Energy, Technology Absorption, Foreign Exchange
Earnings and Outgo
The Company has no activity relating of conservation of energy or
technology absorption.
The Company continued to be a net foreign exchange earner during the
year.
The figures for the foreign exchange earnings and outgo are as follows;
Foreign Exchange Earnings:
Rs. 10,008.27 Lacs (Previous Year- Rs. 12,972.77 Lacs)
Foreign Exchange Outgo:
Rs.344.31 Lacs (Previous Year- Rs. 261.65 Lacs)
(Other than in the normal course of the business as Tour Operator and
Foreign Exchange Restricted Authorised Dealer)
Awards and Recognition during the year under review:
1. "First Runner Up" in the Best Large Tour Operator category awarded
by the Telegraph Ultra Travel luxury survey UK 2010.
2. "First Runner Up" in the Favourite Tour Operator category awarded
by Condé Nast Traveller Readers Choice Awards (2010).
3. "Most Admired Tour Operator 2010" awarded by SATTE (2010)
4. "Best Domestic Tour Operator" awarded by the Abacus TAFI TravelBiz
Monitor Awards (2009).
5. "Best Inbound Tour Operator" awarded by the Abacus TAFI TravelBiz
Monitor Awards (2009).
6. "Most Innovative Product Launch" awarded by the Abacus TAFI
TravelBiz Monitor Awards (2009).
7. "IndiaÃs Top Rated Tour Operator - Outbound 2009" awarded by The
Economic Times, IndiaÃs largest business daily.
8. "Most Innovative Travel Company of 2009" awarded by TodayÃs
Traveller Platinum Award.
Acknowledgements and Appreciation
Your Directors take this opportunity to thank all investors, customers,
vendors, banks/financial institutions, regulatory and government
authorities and Stock exchanges for their consistent support and
encouragement to the Company. The Directors also place on record their
sincere appreciation to all employees of the Company for their hard
work, dedication and commitment. The enthusiasm and unstinting efforts
of the employees have enabled the Company to remain at the forefront of
the Industry.
For and on behalf of the Board of Directors
A.B.M. Good
Chairman
Mumbai, 29th May 2010