Mar 31, 2018
DIRECTORSâ REPORT TO THE MEMBERS
The Directors have pleasure in presenting the 38th Annual Report of the Company together with the Audited Statement of Accounts for the year ended 31st March 2018.
FINANCIAL RESULTS
(Rs. in millions)
Particulars |
2017-18 |
2016-17 |
Segment wise Turnover/Revenue |
||
(a) Hotel Sales turnover |
512.36 |
468.34 |
(b) Sale of Electricity |
76.16 |
83.38 |
(c) Interest on Corporate loan/ |
69.04 |
91.31 |
deposits Received |
||
(d) Rent Received on Commercial |
141.08 |
127.06 |
Spaces at Cessna Business Park |
||
(e) Others |
37.26 |
20.91 |
Total |
835.90 |
790.99 |
Profit before Depreciation, |
||
Finance Cost & Tax |
407.29 |
440.65 |
From Hotel Operations |
121.03 |
137.37 |
From Segments other than the Hotel |
286.28 |
303.28 |
407.29 |
440.65 |
|
Less: Depreciation |
52.05 |
50.32 |
Less: Finance Cost |
62.83 |
6.71 |
Profit before Tax |
292.41 |
383.62 |
Provision for tax for the year |
81.76 |
95.36 |
Profit for the year |
210.65 |
288.26 |
TRANSFER TO RESERVES
During the financial year 2017-18 an amount of Rs.30/- millions (Rs.50/- millions last year) has been transferred to General Reserve out of amount available for appropriations.
HOTEL OPERATIONS
The Board is happy to inform that during the financial year 2017-18 the overall revenue of the hotel was higher and with higher cost, the Company tried its best to show comparatively lower operating performance which has been highlighted above and in the Management Discussion & Analysis Report.
During the financial year 2017-18 the total revenue ofthe company has increased to Rs.836/- millions as compared to Rs.800/- millions in the previous year. The profit after tax for the year is Rs.211/-millions during the financial year 2017-18 as compared to Rs.292/-millions during financial year 2016-17. This decrease has been mainly because of higher expenditure mainly employee costs and interest cost during the financial year. On the whole, the overall performance for the year has been lower. The Company has been able to retain market share through conference on business summits, out-door catering and continuing in its leading position in wedding related business in the city. This performance has been achieved despite new entrants into the hospitality business, expansion in the existing ones and liquar ban for 4 months. As a result, during the year, new supply as especially in our neighborhood has hit the market with increased inventory of rooms thereby reflecting an increase of 40% of inventory in the 5 star and 5-star deluxe segments in the city. To make the matter worse, there has been acute competition due to variable discount factors offered by many of the members of the hotel industry.
FUTURE PROSPECTS
The future of the hotel industry is showing encouraging trend of higher occupancy, but tariffs are not-going up due to competition and cost cutting measure initiated by the corporate companies in the competitive economy prevailing worldwide. Further availability of video conferencing and convenient airline facility are enabling the business traveler to skip room bookings. In addition, there is a substantial increase in supply side of the five-star hotels in Bengaluru especially in the neighborhood resulting in lower occupancy and undercutting of rates. The liquor sale has been banned as the Hotel is situated on the National Highway, which has since been lifted in the financial year under report. However, the Company is striving hard to get more business through various marketing initiatives.
FINANCE
During the year under report, the financial position of the Company has been strengthened despite the moderate increase in overall costs. The Companyâs diversification into electricity generation through Wind Turbine Generators and other sources of income from investments have helped pushing up the bottom-line and the Company is able to show reasonable net profit after income tax. The segment performance is furnished elsewhere in the Annual Report.
DIVIDEND
Your Directors have recommended, the dividend of Rs.10/- per Equity Share for the financial year ended March 31, 2018.
FOREIGN EXCHANGE EARNINGS AND OUTGO
Foreign Exchange Earnings during the year were Rs.144 million which is 28% of the Hotel Sales Turnover. The Foreign Exchange utilization during the year was Rs.20 million.
SUBSIDIARY COMPANIES
The Company has one subsidiary, namely, Airport Golf view Hotels & Suites Pvt. Ltd., Kochi, a wholly owned and a non-material no listed Indian Subsidiary.
In terms of proviso to sub section (3) of Section 129 of the Companies Act, 2013, a report on the performance and financial position of the subsidiary of the Company is set out in the prescribed Form AOC-1, which forms a part of the Consolidated Financial Statements.
DEBT
During the year under report, the Company has entered into Lease Rental Discounting arrangement with HDFC Bank Ltd for its borrowing facilities. The Company was sanctioned borrowing facilities aggregating to Rs.1240/- millions from the HDFC Bank Ltd. The outstanding debt as on March 31, 2018 was 1240/- millions. The above borrowing is within the powers of the Board of Directors of the Company.
DUES TO SMALL SCALE UNDERTAKINGS
There are no dues payable to small scale undertakings.
CORPORATE GOVERNANCE
Members are aware that the Corporate Governance code has become a statutory requirement as per listing regulations framed by the Stock Exchanges/SEBI. Members will be happy to know that their Company is complying with the stipulations of the new regulations as on date. In line with this requirement, a Corporate Governance Reports and a Management Discussion and Analysis Report of the Company is furnished elsewhere in this Annual Report.
ENERGY CONSERVATION
Conservation of energy continues to be on top priority of the management. The information on energy conservation is detailed herein below
a) During the year under report, the Company has generated about 20 millions of unitsâ green power which is being utilized partially for captive consumption of the Hotel & group company and the balance units generated is being sold to Govt. of Karnataka / third party consumers.
b) An effective key-tag system is in vogue in all guest rooms to switch off lights & power connections automatically.
c) Substantially switched over to LED lamps from conventional lamps with a view to saving energy up to 60% on lighting.
d) Installed solar panels which are feeding hot water required for the guest rooms.
e) Imported and installed three highly fuel-efficient screw chillers for our AC plant.
f) Replaced window with double glazed reflective glass with a view to save power on AC consumption.
g) Installed two on load tap charger transformers for stabilizing voltage fluctuations and thereby to save power and prevent damage to electric motors and other installations.
h) Thermostatic Controls, Timers and Photo Cell Switches have been installed wherever necessary to control power consumption.
i) Imported and installed two temperature control systems to reduce power consumption.
j) Constituted an energy conservation committee to monitor power consumption regularly.
TECHNOLOGYABSORPTION
In the opinion of the Board, the required particulars, pertaining to technology absorption are not applicable as hotel forms part of the service industry and the Company does not have any significant manufacturing operations. However, the management has been adopting the latest technology like LCD TV systems, high speed internet installed in all the guest rooms, latest high-speed computers, modern guest amenities, best audio-video equipment, newest model transport vehicles for complimentary transport of hotel guests, video conferencing facility, latest models of sound free fridges in guest rooms and various latest hotel operational equipmentâs. Further the Hotel has been conforming to the stringent Marriott International Standards.
DIRECTORS AND KEY MANAGERIALPERSONNEL
Mr. Ramakrishnan P.R and Mr. Aditya Virwani have been appointed as Non-Executive Directors at the AGM held on 25.09.2017. Mr. M.R.B. Punja, Independent Director resigned from the Board / Audit Committee on 20.11.2017 and the Board took on record its appreciation for valuable services rendered by him to the Company. In his place, Mr. Suresh Vaswani is proposed to be appointed as an independent Director at the ensuing AGM.
The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed under Section 149(6) of the Companies Act, 2013 and SEBI and Stock Exchange regulations
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 Companies Act, 2013 and corporate governance requirements as prescribed by SEBI/BSE. The performance of the Board was evaluated by the Board based on the criteria such as the Board composition and structure, effectiveness of Board process, information and functioning etc. The performance of the committees was evaluated by the Board based on the criteria such as the composition of the committeeâs effectiveness of committee meetings, etc. The Board and Nomination and Remuneration Committee reviewed the performance of the individual directors based on the criteria such as the contribution of individual director to the Board and committee meetings like preparedness on the issue to be discussed, meaningful and constructive contribution and inputs in meetings, etc. In a separate meeting of independent directors, performance of non-independent directors, performance of the Board and performance of Chairman was evaluated.
BOARD DIVERSITY
A diverse Board enables efficient functioning through differences in perspective and skill, and fosters differentiated thought processes at the back of varied industrial and management expertise, gender, knowledge and geographical background. Your Board recognizes the importance of a diverse composition and has adopted a Board Diversity Policy which sets out the approach to diversity. The Board diversity policy is available on our website maccharlesindia.com
NOMINATION & REMUNERATION POLICY
The Board of Directors, on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors, Key Managerial Personnel, Senior
Management and their remuneration as required under Section 178 of the Companies Act, 2013. The Nomination & Remuneration Policy of the Company is annexed to this Report.
NOMINATION & REMUNERATION COMMITTEE
Nomination and Remuneration Committee consists of the following directors namely Mr. C.B. Pardhanani, Chairman, and Mr. P.B. Appiah, Independent Director and Ms. Tanya Girdhar, Independent Director.
Brief description of terms of reference:
- Identifying persons who are qualified to become directors and
- Identifying persons who may be appointed as Key Managerial Personnel, senior management in accordance with the criteria laid down and recommend to the Board for their appointment and removal;
- Carry on the evaluation of every directorâs performance;
- Formulation of the criteria for determining qualifications, positive attributes and independence of a director;
- Recommend to the Board a policy relating to the remuneration of the directors, key managerial personnel and other employees;
- Formulation of criteria for evaluation of Independent Directors and the Board.
- Devising a policy on Board diversity; and
- Any other matter as the Board may decide from time to time. NOMINATION AND REMUNERATION POLICY
The objectives of the Policy :
a) To lay down criteria and terms and conditions about identifying person who are qualified to become Directors (Executive and Non-Executive) and persons who may be appointed in Senior Management and Key Managerial positions and to determine their remuneration.
b) To determine remuneration based on the Companyâs size and financial position and trends and practices on remuneration prevailing in peer Companies.
c) To carry our evaluation of the performance of Directors.
d) To provide them reward linked directly to their effort, performance, dedication and achievement relating to the Companyâs operations.
e) To retain, motivate and promote talent and to ensure long term sustainability of talented managerial persons and create competitive advantage.
CORPORATE GOVERNANCE
Your Company is committed to maintain the highest standards of Corporate Governance. As required under SEBI Regulations, the report on Management Discussion and Analysis, Corporate
Governance as well as the Auditorsâ Corporate Governance as well as the Auditorsâ certificate on the compliance of Corporate Governance are annexed and form part of the Annual Report.
RISK MANAGEMENT
Pursuant to section 134 (3)(n) of the Companies Act, 2013 & regulation 17 of the Listing Regulations, the Company has constituted a Risk Management Committee.
As part of the risk assessment and minimization procedures, the Company had identified certain risk areas about the operations of the Company and initiated steps, wherever possible, for risk minimization. The Companyâs Board is conscious of the need to review the risk assessment and minimization procedures on regular intervals. During the year under review the Company has not received any order passed by the regulators/ courts/ tribunals which impacted the going concern status and Companyâs operation in future.
DIRECTORSâRESPONSIBILITYSTATEMENT
The Board of Directors acknowledges the responsibility for ensuring compliance with the provisions of Section 134(3)(c) read with Section 134(5) of the Companies Act, 2013 in the preparation of the annual accounts for the year ended March 31st, 2018 and states that:
a) In the preparation of the annual accounts for the year ended March 31, 2018, the applicable accounting standards have been followed along with proper explanation relating to materials departures, if any;
b) The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent to give a true and fair view of the of the Company at the end of the financial year under review and of the profit or loss of the Company for that period:
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;
d) The directors have prepared the annual accounts on a going concern basis;
e) The directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and
f) The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.
PARTICULARS OF EMPLOYEES
In terms of the provisions of Section 197(12) of the Companies Act, 2013 read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the names and other of the employees drawing remuneration more than the limits set out in the said Rules are provided in the Annexure forming part of the Annual Report.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
There was one contract or arrangement entered by the Company in accordance with the Section 188 of the Companies Act, 2013, being the advance of 1839 million paid to M/s. LJ Victoria Property Pvt. Ltd. towards purchase of property in Bengaluru. However, there were material related party transactions in terms BSE/SEBI regulations. All material related party transactions that were entered by the Company during the financial year were in the ordinary course of business and on an armâs length basis. All related party transactions are presented to the Audit Committee and the Board of Directors for approval. The policy on materiality of related party transactions and dealing with related party transactions as approved by the Board can be accessed on the Companyâs website. The details of the transactions with related party are provided in the accompanying financial statements.
PRACTICING COMPANY SECRETARYâS REPORT ON CORPORATE GOVERNANCE
As per BSE/SEBI regulation, the Practicing Company Secretaryâs Certificate is given as an annexure to the Directors Report.
AUDITORS & AUDITORSâREPORT
M/s. BSR & Associates LLP, Chartered Accountants, Bengaluru Firm (Firm Registration No. 101248 w/w - 100022) was appointed as Statutory Auditors of the Company at the last Annual General Meeting held on 25thSeptember 2017 to hold office up to the conclusion of the 42nd Annual General Meeting of the company. The notes on accounts referred to in the Auditorsâ Report are self-explanatory and therefore, do not call for any further comments. There are no frauds reported by the Auditors during the Financial Year under report.
INTERNAL AUDITORS
M/s. Ernst & Young LLP, Bengaluru Internal Auditors have been conducting quarterly audits of all operations of the Company and their findings have been reviewed regularly by the Audit Committee. Your Directors note with satisfaction that no material deviations from the prescribed policy and procedures have been observed.
SECRETARIAL AUDITOR
The Board has appointed B. Chandu Narayan, Practicing Company Secretary, Bengaluru to conduct Secretarial Audit under the provisions of Section 204 of the Companies Act, 2013 for the financial year 2017-18. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark. The Secretarial Audit Report is annexed elsewhere in this Annual Report.
MANAGEMENT DISCUSSION & ANALYSIS AND CORPORATE GOVERNANCE
Report on Management Discussion & Analysis and Corporate Governance and Compliance Certificate on Corporate Governance is annexed to this Report.
CORPORATE SOCIALRESPONSIBILITY (CSR)
In line with the requirement of Section 135 of the Companies Act, 2013, the Corporate Social Responsibility Committee has
been constituted by the Board of Directors of the Company at its meeting held on 05.02.2016. The said Committee comprises of Mr. C.B. Pardhanani Chairman of the Company Mr. PB. Appiah the Chairman of the Audit Committee and Ms. Tanya Girdhar, Independent Director.
As required under Section 135 of the Companies Act, 2013, the Board of Directors at its meeting held on 05.02.2016, has devised a Corporate Social Responsibility Policy which interalia includes the constitution of the said committee and corporate social responsibility activities to be under taken by the Company. The said policy may be referred at the Companyâs website. The Annual Report on CSR activities is annexed to this Report.
INTERNAL FINANCIAL CONTROL POLICY AND ITS ADEQUACY
The Board has adopted an Internal Financial Control Policy to be followed by the Company and such policies and procedures adopted by the Company for ensuring the orderly and efficient conduct of its business, including adherence to Companyâs policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information. The Audit Committee evaluates the internal financial control system periodically. The observations and comments of the Audit Committee are placed before the Board.
DISCLOSURES: A) MEETINGS OF THE BOARD
Four (4) meetings of the Board of Directors were held during the financial year under report. The details of the Board Meetings and the attendance of the Directors are provided in the Corporate Governance Report.
B) COMPOSITION OF AUDIT COMMITTEE
The Audit Committee comprises four (4) Directors amongst which two (2) are Independent Non-Executive Directors, namely Mr. PB. Appiah Chairman of the Audit Committee and Mr. M.R.B. Punja / Ms. Tanya Girdhar, one (1) Non-executive director namely Mr. P.R. Ramakrishnan and one (1) is Mr. C.B. Pardhanani Chairman of the Company. All the recommendations made by the Audit Committee were accepted by the Board of Directors.
C) VIGIL MECHANISM/WHISTLE BLOWER POLICY
Pursuant to Section 177 of the Companies Act, 2013 read with listing Regulations, the Board of Directors at its meeting held on 05.02.2016 has adopted a vigil mechanism/whistle blower policy of the Company. The policy provides a framework for directors and employees to report genuine concerns about unethical behavior, actual or suspected fraud or violation of the Companyâs code of conduct or ethics policy. Protected disclosures can be made by a whistle blower through an email or direct access to the Chairman of the Audit Committee. The vigil mechanism/whistle blower policy can be accessed on the Companyâs website maccharlesindia.com
D) GREEN INITIATIVES
Electronic copies of the Annual Report and notice of the ensuring AGM are sent to all the members whose email address are registered with the Company /Depository Participant(s). For members who have not registered their email addresses, physical copies of the Annual Report and the notice of ensuing AGM are sent in the permitted mode. Members requiring physical copies can send a request to the Company Secretary. The Company is providing e-voting facility to all members to enable them to cast their votes electronically on all resolutions set forth in the AGM Notice. The instructions for e-voting are provided in the AGM Notice.
E) DISCLOSURE AS PER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013
The Company has zero tolerance towards sexual harassment at workplace and during the year under review, your Board has constituted an internal Complaints Committee to consider and redress complaints of sexual harassment & also adopted a policy on prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of Sexual Harassment of women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the rules framed thereunder. During the financial year 2017-18, the Company has received one complaint on sexual harassment which has been duly redressed.
F) PARTICULARS OF LOANS GIVEN, INVESTMENT MADE, GUARANTEES GIVEN, AND SECURITY PROVIDED
Of loans given, investments made, along with the purpose for which the loan is proposed to be utilized by the recipient are provided in the financial statements.
G) DISCLOSURES
1. Declaration by the Chief Executive Officer affirming compliance with the code of conduct is annexed elsewhere in this Annual Report.
2. There are no material changes and commitments made during the financial year.
3. There are no changes in the nature of business during the financial year.
4. There is a material variation of market capitalization during the financial year.
5. There are a demat suspense accounts / unclaimed suspense account during the financial year.
6. Necessary disclosures of Accounting Treatment have been made in the financial statements. The Financial Statements of the Company have been prepared in accordance with the IND AS to comply with the Accounting Standards specified under Section 133 of the Act read with Rule 7 of the Companies (Accounts) Rules, 2014.
7. The extract of Annual Return is annexed elsewhere in this Annual Report.
H) GENERAL
Your directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review:
1. Details relating to deposits covered under Chapter V of the Companies Act, 2013.
2. Issue of equity shares with differential rights as to dividend, voting or otherwise.
3. Issue of shares (including sweat equity shares) to employees of the Company under any scheme.
4. No significant or material orders were passed by the Regulators or Courts of Tribunals which impact the going concern status and Companyâs operations in future.
DEMATERIALIZATION
The equity shares of the Company have been admitted for dematerialization with both the Depositories viz., Central Depository Services (India) Limited (CDSL) and National Securities Depository Limited (NSDL). The ISIN allotted to your Companyâs equity shares is INE435D01014.
ACKNOWLEDGEMENTS
Your Directors are grateful to the Shareholders for their support and co-operation extended to the Company for many years. The Directors also thank the Banks namely State Bank of India, and HDFC Bank for their co-operation and support. The Directors wish to place on record the support and encouragement received from the Department of Tourism, Government of India, Karnataka State Government and Foreign collaborators M/s. Le Meridien / Marriott International. The Directors also acknowledge the dedicated services rendered by the officers and all the staff of the company.
For and on behalf of the Board
C.B. Pardhanani
Chairman
Bengaluru 23, May 2018
Mar 31, 2015
The Directors have pleasure in presenting the 35th Annual Report of the
Company together with the Audited Statement of Accounts for the year
ended 31st March 2015.
FINANCIAL RESULTS
(In Rs.)
Particulars 2014-15 2013-14
Segment wise Turnover/Revenue
(a) Hotel Sales turnover 42,33,49,874 39,38,81,027
(b) Sale of Electricity 4,04,68,781 3,41,59,115
(c) Interest on Corporate loan/
deposits Received 9,09,80,633 7,22,20,853
(d) Rent Received on Commercial
Spaces at Cessna Business Park 11,68,40,412 7,19,34,079
(e) Dividend/ Profit/(Loss) on
sale of investments 4,60,29,384 (6,50,02,911)
Total 71,76,69,084 50,71,92,163
Profit before Depreciation,
Finance Cost & Tax
From Hotel Operations 9,28,64,355 9,24,63,600
From Investments other than
the Hotel 29,42,95,206 11,33,11,136
38,71,59,561 20,57,74,736
Less : Depreciation 2,83,44,387 6,51,31,429
Less : Finance Cost 8,12,102 11,03,382
Profit before Tax 35,80,03,072 13,95,39,925
From Hotel Operations 6,37,07,866 2,56,12,192
From Investments
other than the Hotel 29,42,95,206 11,39,27,733
35,80,03,072 13,95,39,925
Provision for tax for the year 10,78,84,414 7,14,25,505
Profit for the year 25,01,18,658 6,81,14,420
Add : Balance brought forward
from the previous year 17,17,15,493 20,25,66,528
Amount available for Appropriation 42,18,34,151 27,06,80,948
APPROPRIATIONS
(i) General Reserves 10,00,00,000 70,00,000
(ii) Dividend : 10,48,08,416 7,86,06,312
iii) Corporate Dividend Tax 2,09,55,517 1,33,59,143
iv) Balance carried to Balance Sheet 19,60,70,218 17,17,15,493
TRANSFER TO RESERVES
During the financial year 2014-15 an amount of Rs.1000 lacs (Rs.70 lacs
last year) has been transferred to General Reserve out of amount
available for appropriations.
HOTEL OPERATIONS
The Board is pleased to inform that during the financial year 2014- 15
the overall revenue of the hotel was higher and with effective cost
control & effective working capital management, the Company enhanced
its operating performance which has already been highlighted above and
in the Management Discussion & Analysis Report.
The Board is pleased to inform you that during the financial year
2014-15 the total revenue of the Company has increased to Rs.7177 lacs
as compared to Rs.5052 lacs in the previous year. However, the Hotel
revenue has marginally increased. The profit after tax for the year is
Rs.2501 lacs during the financial year 2014-15 compared to Rs.681 lacs
during financial year 2013-14. This increase has been mainly on account
of 'other income' in the previous year. On the whole, the overall
performance for the year has been higher with effective cost control,
other segments & business and increase in business due to intensive
efforts of marketing network. The Company has been able to retain
market share through conference on business summits, out-door catering
and also continuing in its leading position in wedding related business
in the city. This success has been achieved despite new entrants into
the hospitality business, and/or expansion in the existing ones. As a
result, during the year new supply has hit the market with increasing
inventory of rooms thereby reflecting an increase of 30% of inventory
in the 5star and 5star deluxe segment in the city and is situated right
in the middle of the Company's key corporate catchment areas. To make
the matter worse, there has been acute competition due to variable
discount factors offered by many of the members of the industry.
FUTURE PROSPECTS
The future of the hotel industry is facing tough times ahead in view of
cost cutting measure initiated by the corporate companies in the
sluggish economy prevailing worldwide. In addition there is substantial
increase in supply side of the five star hotels in Bangalore resulting
in low occupancy and undercutting of rates. However, the Company is
striving hard to get more business through various marketing
initiatives.
FINANCE
During the year under report, the financial position of the Company has
been strengthened despite the marginal increase in Hotel business. The
Company's diversification into electricity generation through Wind
Turbine Generators and other sources of income from investments have
helped the bottomline and the Company is able to show higher net profit
after income tax. The segment performance is furnished elsewhere in the
Annual Report.
DIVIDEND
Your Directors have recommended a dividend of Rs.8 per Equity Share for
the financial year ended March 31, 2015, amounting to Rs.10,48,08,416/-
(exclusive of tax of Rs.2,09,55,517/-). The said dividend, if approved
at the ensuing Annual General Meeting, will be paid to those
shareholders whose names appear in the Register of Members as on 24th
September 2015.
FOREIGN EXCHANGE EARNINGS AND OUTGO
Foreign Exchange Earnings during the year were Rs.1,365/- lakhs which
is 32% of the Hotel Sales Turnover. The Foreign Exchange utilization
during the year was Rs.180/- lakhs.
SUBSIDIARY COMPANIES
The Company has one subsidiary, namely, Airport Golf view Hotels &
Suites Pvt. Ltd., Kochi, a wholly owned and a non-material non- listed
Indian Subsidiary.
In terms of proviso to sub section (3) of Section 129 of the Companies
Act, 2013, a report on the performance and financial position of the
subsidiary of the Company is set out in the prescribed Form AOC- 1,
which forms a part of the Consolidated Financial Statements.
DUES TO SMALL SCALE UNDERTAKINGS
There are no dues payable to small scale undertakings.
CORPORATE GOVERNANCE
Members are aware that the Corporate Governance code has become a
statutory requirement as per listing guidelines framed by the Stock
Exchanges. Members will be happy to know that their Company is
complying with the stipulations of the new code as on date. In line
with this requirement of the code, a Corporate Governance Reports and a
Management Discussion and Analysis Report of the Company is furnished
elsewhere in this Annual Report.
ENERGY CONSERVATION
Conservation of energy continues to be on top priority of the
management. The information on energy conservation is detailed herein
below.
a) During the year under report, the Company has added two more Wind
Turbine Generators with a capacity of 4.20 MW with the investment of
Rs.24.50 crores apart from having existing capacity of 5.10MW which
will generate green electricity of about 2.25 crore units p.a. of green
power which is being utilized partially for captive consumption of the
Hotel and the balance units generated is being sold to Govt. of
Karnataka / third party consumers.
b) An effective key-tag system is in vogue in all guest rooms to switch
off lights & power connections automatically.
c) Substantially switched over to LED lamps from conventional lamps
with a view to saving energy upto 60% on lighting.
d) Installed solar panels which are feeding hot water required for the
guest rooms.
e) Imported and installed three highly fuel efficient screw chillers
for our AC plant.
f) Replaced window with double glazed reflective glass with a view to
save power an AC consumption.
g) Installed two on load tap charger transformers for stabilizing
voltage fluctuations and thereby to save power and prevent damage to
electric motors and other installations.
h) Thermostatic Controls, Timers and Photo Cell Switches have been
installed wherever necessary to control power consumption.
i) Imported and installed two temperature control systems to reduce
power consumption.
j) Constituted an energy conservation committee to monitor power
consumption regularly.
TECHNOLOGY ABSORPTION
In the opinion of the Board, the required particular, pertaining to
technology absorption are not applicable as hotel forms part of the
service industry and the Company does not have any significant
manufacturing operations. However, the management has been adopting the
latest technology like LCD TV systems, high speed internet installed in
all the guest rooms, latest high speed computers, modern guest
amenities, best audio-video equipment, newest model transport vehicles
for complimentary transport of hotel guests, video conferencing
facility, latest models of sound free fridges in guest rooms and
various latest hotel operational equipments. Further the Hotel has been
conforming to the stringent Le Meridien's International Standards.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
The Board of Directors at its meeting held on 24.04.2015 has appointed
Mr. Suresh Badlaney as Manager of the Company for a period of three
years with effect from 01.04.2015 on the recommendation of Nomination &
Remuneration Committee.
Pursuant to Section 149 of the Companies Act, 2013 read with Clause 49
of the Listing Agreement with the Stock Exchanges, a Woman Director
should be a member of the Board of Directors of the Company. In
accordance with the laws, Ms. Tanya Girdhar John has been appointed as
an Independent Additional Director of the Company with effect from
21.08.2015 and her candidature for appointment as an Independent
Director has been sought from the Members in the ensuing Annual General
Meeting of the Company. Brief profile of Ms. Tanya Girdhar John as
required under Clause 49(VIII)(E) of the Listing Agreement is provided
in the Notice convening the Annual General Meeting.
During the year, as on 31.03.2015, Ms. Sangeeta C. Pardhanani has
resigned as Managing Director of the Company due to her pre- occupation
elsewhere. The Board expressed its deep appreciation for the valuable
services rendered by her and decided not to fill up the vacancy caused
by her resignation.
The Company has received declarations from all the Independent
Directors of the Company confirming that they meet the criteria of
independence as prescribed under Section 149(6) of the Companies Act,
2013 and Clause 49 of the Listing Agreement with the Stock Exchanges.
Pursuant to the provisions of Section 203 of the Companies Act, 2013
the appointment of Mr. Suresh K Badlaney as Manager and Mr. Pranesha K
Rao as CFO were formalized as the Key Managerial Personnel of the
Company.
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 Companies Act, 2013 and corporate governance
requirements as prescribed by SEBI under clause 49 of the listing
Agreements. The performance of the Board was evaluated by the Board on
the basis of the criteria such as the Board composition and structure,
effectiveness of Board process, information and functioning etc. The
performance of the committees was evaluated by the Board on the basis
of the criteria such as the composition of the committees,
effectiveness of committee meetings, etc. The Board and Nomination and
Remuneration Committee reviewed the performance of the individual
directors on the basis of the criteria such as the contribution of
individual director to the Board and committee meetings like
preparedness on the issue to be discussed, meaningful and constructive
contribution and inputs in meetings, etc. In a separate meeting of
independent directors, performance of non-independent director,
performance of the Board as a whole and performance of Chairman was
evaluated.
NOMINATION & REMUNERATION POLICY
The Board of Directors, on the recommendation of the Nomination &
Remuneration Committee framed a policy for selection and appointment of
Directors, Key Managerial Personnel, Senior Management and their
remuneration as required under Section 178 of the Companies Act, 2013
and Clause 49(IV) of the Listing Agreement with the Stock Exchanges.
The Nomination & Remuneration Policy of the Company is annexed to this
Report.
NOMINATION & REMUNERATION COMMITTEE
Nomination and Remuneration Committee consists of the following
directors namely Mr. C.B. Pardhanani , Chairman, and Mr. P.B. Appiah,
Director.
Brief description of terms of reference:
- Identifying persons who are qualified to become directors and
- Identifying persons who may be appointed as Key Managerial Person,
senior management in accordance with the criteria laid down and
recommend to the Board for their appointment and removal;
- Carry on the evaluation of every director's performance;
- Formulation of the criteria for determining qualifications, positive
attributes and independence of a director;
- Recommend to the Board a policy relating to the remuneration of the
directors, key managerial personnel and other employees;
- Formulation of criteria for evaluation of Independent Directors and
the Board.
- Devising a policy on Board diversity; and
- Any other matter as the Board may decide from time to time.
NOMINATION AND REMUNERATION POLICY
The objectives of the Policy
1) To lay down criteria and terms and conditions with regard to
identifying person who are qualified to become Directors (Executive and
Non-Executive) and persons who may be appointed in Senior Management
and Key Managerial positions and to determine their remuneration.
2) To determine remuneration based on the Company's size and financial
position and trends and practices on remuneration prevailing in peer
Companies.
3) To carry our evaluation of the performance of Directors.
4) To provide them reward linked directly to their effort, performance,
dedication and achievement relating to the Company's operations.
5) To retain, motivate and promote talent and to ensure long term
sustainability of talented managerial persons and create competitive
advantage.
CORPORATE GOVERNANCE
Your Company is committed to maintain the highest standards of
Corporate Governance. As required under Clause 49 of the Listing
Agreement with the Stock Exchanges, the report on Management Discussion
and Analysis, Corporate Governance as well as the Auditors' Corporate
Governance as well as the Auditors' certificate on the compliance of
Corporate Governance are annexed and form part of the Annual Report.
RISK MANAGEMENT COMMITTEE
Pursuant to Clause 49 of the Listing Agreement, the Company has
constituted a Risk Management committee. The details of the Committee
and its terms of reference are set out in the Corporate Governance
Report.
Risk Management Committee consists of the following persons namely Mr.
C.B. Pardhanani, Chairman, Mr. P.B. Appiah, Director. Mr. M.S. Reddy,
V P Finance & Company Secretary acts as secretary to the committee.
The Company has a robust Risk Management framework to identify and
evaluate business risks and opportunities. This framework seeks to
create transparency, minimize adverse impact on business objective and
enhance the Company's competitive advantage. The risk framework defines
the risk management approach across the enterprise at various levels
including documentation and reporting.
The framework enables risks to be appropriately rated and graded in
accordance with their potential impact and likelihood. The two key
components of risks are the probability (likelihood) of occurrence, if
the risk occurs. Risk is analyzed by combining estimates of probability
and impact in the context of existing control measures.
DIRECTORS' RESPONSIBILITY STATEMENT
The Board of Directors acknowledges the responsibility for ensuring
compliance with the provisions of Section 134(3)(c) read with Section
134(5) of the Companies Act, 2013 in the preparation of the annual
accounts for the year ended March 31, 2015 and states that:
a) In the preparation of the annual accounts for the year ended March
31, 2015, the applicable accounting standards have been followed along
with proper explanation relating to materials departures, if any;
b) The Directors have selected such accounting policies and applied
them consistently and made judgments and estimates that are reasonable
and prudent so as to give a true and fair view of the state of affairs
of the Company at the end of the financial year under review and of the
profit or loss of the Company for that period:
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 detection fraud and other irregularities;
d) The directors have prepared the annual accounts on a going concern
basis;
e) The directors have laid down internal financial controls to be
followed by the Company and that such internal financial controls are
adequate and are operating effectively; and
f) The Directors have devised proper systems to ensure compliance with
the provisions of all applicable laws and that such systems are
adequate and operating effectively.
PARTICULARS OF EMPLOYEES
Information as per Rules 5(2) & (3) of the Companies (Appointment and
Remuneration of Managerial Personnel) Rules, 2015, a statement showing
the names and other particulars of the employees drawing remuneration
in excess of the limits set out in the said rules is appended below:
Employed for the year :
Name Ms.S.C.Pardhanani
Age 46 Years
Remuneration Rs.1,54,94,273/-
Qualification B.Com., DBM
Experience 12 Years
Date of commencement of
employment 01.10.2002
Last Employment held Executive Director  Mac Charles
(India) Ltd.
Designation Managing Director
Shares held in the Company Nil
Whether related to any Director She is daughter of Mr. C.B. Pardhanani,
Chairman
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
There were no contracts or arrangements entered into by the Company in
accordance with the Section 188 of the Companies Act, 2013. However,
there were material related party transactions in terms of Clause 49 of
the Listing Agreements. All material related party transactions that
were entered by the Company during the financial year were in the
ordinary course of business and on an arm's length basis. All related
party transactions are presented to the Audit Committee and the Board
for approval.
The policy on materiality of related party transactions and dealing
with related party transactions as approved by the Board can be
accessed on the Company's website.
The details of the transactions with related party are provided in the
accompanying financial statements.
AUDITORS' REPORT ON CORPORATE GOVERNANCE
As required by Clause 49 of the Listing Agreement, the Auditor's
Certificate is given as an annexure to Directors Report.
AUDITORS & AUDITORS' REPORT
M/s. K.B. Nambiar & Associates, Chartered Accountants, Bangalore Firm
(Firm Registration No. 002313S) was appointed as Statutory Auditors of
the Company at the last Annual General Meeting held on 22nd September
2014 to hold office upto the conclusion of the fourth consecutive
Annual General Meeting subject to ratification by the members at every
Annual General Meeting. Therefore, ratification of appointment of
Statutory Auditors is being sought from the members of the Company at
the ensuing AGM.
The notes on accounts referred to in the Auditors' Report are self-
explanatory and therefore, do not call for any further comments.
INTERNAL AUDITORS
M/s. B.P. Rao & Company, Internal Auditors have been conducting
quarterly audits of all operations of the Company and their findings
have been reviewed regularly by the Audit Committee. Your Directors
note with satisfaction that no material deviations from the prescribed
policy and procedures have been observed.
SECRETARIAL AUDITOR
The Board has appointed M/s. VCS & Associates, Bangalore, Practicing
Company Secretaries to conduct Secretarial Audit under the provisions
of Section 204 of the Companies Act, 2013 for the financial year
2015-16. The Secretarial Audit Report does not contain any
qualification, reservation or adverse remark.
MANAGEMENT DISCUSSION AND ANALYSIS AND CORPORATE GOVERNANCE
Pursuant to Clause 49 of the Listing Agreement with the Stock
Exchanges, Report on Management Discussion and Analysis and Corporate
Governance and Compliance Certificate on Corporate Governance are
annexed to this Report.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
In line with the requirement of Section 135 of the Companies Act, 2013,
the Corporate Social Responsibility Committee has been constituted by
the Board of Directors of the Company at its meeting held on
22.01.2015. The said Committee comprises of Mr. C.B. Pardhanani
Chairman of the Company and Mr. P.B. Appiah the Chairman of the Audit
Committee.
As required under Section 135 of the Companies Act, 2013, the Board of
Directors at its meeting held on 22.01.2015, has devised a Corporate
Social Responsibility Policy which interalia includes the constitution
of the said committee and corporate social responsibility activities to
be taken by the Company. The said policy may be referred at the
Company's website. The Annual Report on CSR activities is annexed to
this Report.
DISCLOSURES:
A) MEETINGS OF THE BOARD
Five (5) meetings of the Board of Directors were held during the year.
The details of the Board Meeting and the attendance of the Directors
are provided in the Corporate Governance Report.
B) COMPOSITION OF AUDIT COMMITTEE
The Audit Committee comprises three (3) Directors amongst which two (2)
are Independent Non-Executive Directors, namely Mr. P.B. Appiah and
Mr. M.R.B. Punja and one (1) is Mr. C.B. Pardhanani Chairman of the
Company. All the recommendations made by the Audit Committee were
accepted by the Board.
C) VIGIL MECHANISM/WHISTLE BLOWER POLICY
Pursuant to Section 177 of the Companies Act, 2013 read with Clause
49(II)(F) of the Listing Agreement with the Stock Exchanges, the Board
of Directors at its meeting held on 22.01.2015 has adopted a vigil
mechanism/whistle blower policy of the Company. The policy provides a
framework for directors and employees to report genuine concerns about
unethical behavior, actual or suspected fraud or violation of the
Company's code of conduct or ethics policy.
Protected disclosures can be made by a whistle blower through and email
or to the Chairman of the Audit Committee. The vigil mechanism/whistle
blower policy can be accessed on the Company's website.
D) DISCLOSURE AS PER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE
(PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013
The Company has zero tolerance towards sexual harassment at workplace
and during the year under review, your Board has constituted on
internal Complaints Committee to consider and redress complaints of
sexual harassment & also adopted a policy on prevention, prohibition
and redressal of sexual harassment at workplace in line with the
provisions of Sexual Harassment of women at Workplace (Prevention,
Prohibition and Redressal) Act, 2013 and the rules framed thereunder.
During the financial year 2014-15, the Company has received no
complaints on sexual harassment.
E) PARTICULARS OF LOANS GIVEN, INVESTMENT MADE, GUARANTEES GIVEN AND
SECURITY PROVIDED
Particulars of loans given, investments made, along with the purpose
for which the loan is proposed to be utilized by the recipient are
provided in the financial statements.
F) PARTICULARS OF REMUNERATION
Disclosure pertaining to remuneration and other details as required
under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of
the Companies (Appointment and Remuneration of Managerial Personnel)
Rules, 2014 are provided elsewhere in this report.
G) GENERAL
Your directors state that no disclosure or reporting is required in
respect of the following items as there were no transactions on these
items during the year under review:
1. Details relating to deposits covered under Chapter V of the
Companies Act, 2013.
2. Issue of equity shares with differential rights as to dividend,
voting or otherwise.
3. Issue of shares (including sweat equity shares) to employees of the
Company under any scheme.
4. No significant or material orders were passed by the Regulators or
Courts of Tribunals which impact the going concern status and Company's
operations in future.
DEMATERIALIZATION
The equity shares of the Company have been admitted for
dematerialization with both the Depositories viz., Central Depository
Services (India) Limited (CDSL) and National Securities Depository
Limited (NSDL). The ISIN allotted to your Company's equity shares is
INE435D01014.
ACKNOWLEDGEMENTS
Your Directors are grateful to the Shareholders for their support and
co-operation extended to the Company for many years. The Directors also
thank the Banks namely State Bank of India, State Bank of Mysore and
HDFC Bank for their co-operation and support. The Directors wish to
place on record the support and encouragement received from the
Department of Tourism, Government of India, Karnataka State Government
and Foreign collaborators M/s. Le Meridien / Starwood Hotels & Resorts.
The Directors also acknowledge the dedicated services rendered by the
officers and all the staff of the company.
For and on behalf of the Board
Bangalore C.B. Pardhanani
21 August 2015 Chairman
Mar 31, 2014
THE MEMBERS
The Directors have pleasure in presenting the 34th Annual Report of
the Company together with the Audited Statement of Accounts for the
year ended 31 March 2014.
FINANCIAL RESULTS (In Rs.)
Particulars 2013-14 2012-13
Segmentwise Turnover/Revenue
(a) Hotel Sales turnover 39,38,81,027 40,52,93,650
(b) Sale of Electricity 3,41,59,115 3,58,37,644
(c) Interest on Corporate
loan/ deposits Received 7,22,20,853 8,90,10,702
(d) Rent Received on Commercial
Spaces at Cessna Business Park 7,19,34,079 2,20,51,763
(e) Dividend/ Profit/(Loss) on sale of
investments (6,50,02,911) 5,75,68,363
Total 50,71,92,163 60,97,62,122
Profit before Depreciation,
Finance Cost & Tax
From Hotel Operations 9,24,63,600 8,41,76,408
From Investments other than the Hotel 11,33,11,136 20,44,68,472
20,57,74,736 28,86,44,880
Less : Depreciation 6,51,31,429 6,31,18,373
Less : Finance Cost 11,03,382 9,37,458
Profit before Tax 13,95,39,925 22,45,89,049
From Hotel Operations 2,56,12,192 2,01,20,577
From Investments
other than the Hotel 11,39,27,733 20,44,68,472
13,95,39,925 22,45,89,049
Provision for tax for the year 7,14,25,505 6,56,85,278
Profit for the year 6,81,14,420 15,89,03,771
Add : Balance brought forward
from the previous year 20,25,66,528 15,16,28,212
Amount available for
Appropriation 27,06,80,948 31,05,31,983
APPROPRIATIONS
(i) General Reserves 70,00,000 1,60,00,000
(ii) Dividend : 7,86.06,312 7,86,06,312
iii) Corporate Dividend Tax 1,33,59,143 1,33,59,143
iv) Balance carried to
Balance Sheet 17,17,15,493 20,25,66,528
HOTEL OPERATIONS
During the year under report, the economy in general and Hotel business
in particular has not done well especially in the face of sluggish
economy and severe competition from the new five star hotels. In the
last few years, Bangalore Hotel Industry has been facing weak demand
and an excess supply of rooms caused by optimism about the economic
growth story prior to 2008. This has led to new hotel openings by local
and International hospitality brands. However, due to the economic
slowdown, supply outpaced demand. As a result the Hotel room occupancy
and room tariffs have dropped considerably. In view of this scenario,
the sales turnover of the Company has decreased from Rs.4053 lakhs to
Rs.3939 lakhs.
The profit before income tax from the Hotel is only Rs.2.56 crore as
mentioned under Financial Results.
FUTURE PROSPECTS
The future of the hotel industry is facing tough times ahead in view of
cost cutting measures initiated by the corporate companies in the
sluggish economy prevailing worldwide. In addition there is substantial
increase in supply side of the five star hotels in Bangalore resulting
in low occupancy and undercutting of rates. However, the Company is
striving hard to get more business through various marketing
initiatives.
FINANCE
During the year under report, the financial position of the Company has
been maintained despite the fall in Hotel business. The Company''s
diversification into electricity generation through Wind Turbine
Generators and other sources of income from investments have helped the
bottomline and the Company is able to show net profit after income tax.
The segment performance is furnished elsewhere in this Annual Report.
DIVIDEND
Your Directors have recommended a dividend of Rs.6/- per Equity Share
for the financial year ended March 31, 2014, amounting to
Rs.9,19,65,455/- (inclusive of tax of Rs.1,33,59,143/-). The said
dividend, if approved at the ensuing Annual General Meeting, will be
paid to those shareholders whose names appear in the Register of
Members as on 18th September, 2014.
DIRECTORS
Mr. M.R.Prasanna resigned from the Board w.e.f. 28th May, 2013. During
the year, the Board has co-opted Mr. Suresh Vaswani as a Director and
was appointed as Director at the Annual General Meeting of the Company
held on 18.09.2013.
As per the provision of Section 149 and other applicable provisions, if
any, of the Companies Act, 2013, Mr.M.R.B.Punja, Mr.P.B.Appiah and
Mr.Suresh Vaswani are proposed to be appointed as Independent Directors
of the Company for a period of five years commencing from September 22
, 2014.
Your approval for their appointments as Directors has been sought in
the Notice convening the Annual General Meeting of the Company.
DIRECTORS'' RESPONSIBILITY STATEMENT
Pursuant to the provisions of Section 217(2AA) of the Companies Act,
1956, the Board of Directors, based on the representations received
from the Operating Management, hereby confirms that :
(i) in the preparation of the annual accounts, the applicable
accounting standards have been followed and that there are no material
departures ;
(ii) it has in the selection of the accounting policies, consulted the
Statutory Auditors and has applied them consistently and made
judgements and estimates that are reasonable and prudent, so as to give
a true and fair view of the state of affairs of the Company as at March
31, 2014 and of the profit of the Company for that period;
(iii) it has taken proper and sufficient care for the maintenance of
adequate accounting records in accordance with the provisions of the
Act for safeguarding the assets of the Company and for preventing and
detecting fraud and other irregularities, to the best of its knowledge
and ability. There are however, inherent limitations, which should be
recognized while relying on any system of internal control and records;
and
(iv) it has prepared the annual accounts on a going concern basis.
FOREIGN EXCHANGE EARNINGS AND OUTGO
Foreign Exchange Earnings during the year were Rs.1387 lacs which is
35% of the Hotel Sales Turnover. The Foreign Exchange utilisation
during the year was Rs.246 lacs.
SUBSIDIARY COMPANIES
At the beginning of the year, the Company had one Subsidiary Company,
Airport Golf View Hotels & Suites Pvt. Ltd., Kochi.
As required under the Listing Agreements with the Stock Exchanges, a
Consolidated Financial Statement of the Company and its Subsidiary is
attached. The Consolidated Financial Statements have been prepared in
accordance with the relevant Accounting Standards as prescribed under
Section 211(3C) of the Companies Act, 1956 ("Act"). These financials
statements disclose the assets, liabilities, income, expenses and other
details of the Company, its subsidiary.
Pursuant to the provision of Section 212(8) of the Act, the Ministry of
Corporate Affairs vide its circular dated February 8, 2011 has granted
general exemption from attaching the Balance Sheet, Profit and Loss
Account and other documents of the subsidiary Company with the Balance
Sheet of the Company. A statement containing brief financial details of
the Company''s subsidiaries for the financial year ended March 31, 2014
is included in the Annual Report. The annual accounts of these
subsidiary and the related detailed information will be made available
to any member of the Company/its subsidiary seeking such information at
any point of time and are also available for inspection by any member
of the Company/ its subsidiary at the registered office of the Company.
The annual accounts of the said subsidiary will also be available for
inspection, as above, at the Head Office/Registered Office of the
respective subsidiary company. The Company shall furnish a copy of
details of annual accounts of subsidiary to any member on demand.
DUES TO SMALL SCALE UNDERTAKINGS
There are no dues payable to small scale undertakings.
CORPORATE GOVERNANCE
Members are aware that the Corporate Governance code has become a
statutory requirement as per listing guidelines framed by the Stock
Exchanges. Members will be happy to know that their Company is
complying with the stipulations of the new code as on date. In line
with this requirement of the code, a Corporate Governance Report and a
Management Discussion and Analysis Report of the Company is furnished
elsewhere in this Annual Report.
ENERGY CONSERVATION
Conservation of energy continues to be on top priority of the
management.
The following energy conservation measures have been taken:
a) During the current year, the Company is adding two more Wind
Turbine Generators with a capacity of 4.20 MW apart from having
existing capacity of 5.10 MW which will generate green electricity of
about 2.25 crore units p.a. of green power which is being utilized
partially for captive consumption of the Hotel and the balance units
generated is being sold to Govt. of Karnataka/ third party consumers.
b) an effective key-tag system is in vogue in all guest rooms to switch
off lights & power connections automatically.
c) substantially switched over to LED lamps from conventional lamps
with a view to saving energy upto 60% on lighting.
d) installed solar panels which are feeding hot water required for the
guest rooms.
e) imported and installed three highly fuel efficient screw chillers
for our AC plant.
f) replaced windows with double glazed reflective glass with a view to
save power on AC consumption.
g) installed two on load tap charger transformers for stabilising
voltage fluctuations and thereby to save power and prevent damage to
electric motors and other installations.
h) thermostatic Controls, Timers and Photo Cell Switches have been
installed wherever necessary to control power consumption.
i) imported and installed two temperature control systems to reduce
power consumption.
j) constituted an energy conservation committee to monitor power
consumption regularly.
TECHNOLOGY ABSORPTION
In the opinion of the Board, the required particulars, pertaining to
technology absorption in terms of Rule 2 of the Companies (Disclosure
of Particulars in the Report of Board of Directors) Rules, 1988 are not
applicable as hotel forms part of the service industry and the Company
does not have any significant manufacturing operations. However, the
management has been adopting the latest technology like LCD TV systems,
high speed internet installed in all the guest rooms, latest high speed
computers, modern guest amenities, best audio-video equipment, newest
model transport vehicles for complimentary transport of hotel guests,
video conferencing facility, latest models of soundfree fridges in
guest rooms and various latest hotel operational equipments. Further
the Hotel has been conforming to the stringent Le Meridien''s
International Standards.
PARTICULARS OF EMPLOYEES
Information under section 217(2A) of the Companies Act. 1956, read with
Companies (particulars of employees) Rules, 1975, is appended below :
Particulars of employees pursuant to the provisions of Section 217(2A)
of the Companies Act, 1956 :
EMPLOYEES
The relationship with employees has been cordial. The total number of
persons employed by the Company is 373 as at 31 March 2014.
AUDIT COMMITTEE
The Audit Committee comprises of Mr. C.B. Pardhanani, Mr.P.B.Appiah,
and Mr. M.R.B.Punja. The Audit Committee is discharging its duties and
functions in consultation with the Internal and Statutory Auditors: (a)
To review the adequacy of the internal control system and internal
Audit Reports and their compliance thereof: (b) To oversee the
Company''s financial reporting process and the disclosure of its
financial information to ensure that the financial statements are
correct, sufficient and credible: and (c) To review with the
management, the financial statements before submission to the Board.
AUDITORS'' REPORT ON CORPORATE GOVERNANCE
As required by Clause 49 of the Listing Agreement, the Auditor''s
Certificate is given as an annexure to Directors Report.
AUDITORS
M/s. K.B. Nambiar & Associates, Chartered Accountants, retire at the
forthcoming Annual General Meeting and being eligible offer themselves
for re-appointment.
INTERNAL AUDITORS
M/s. B.P. Rao & Company, Internal Auditors have been conducting
quarterly audits of all operations of the Company and their findings
have been reviewed regularly by the Audit Committee. Your Directors
note with satisfaction that no material deviations from the prescribed
policy and procedures have been observed.
DEMATERIALISATION
The equity shares of the Company have been admitted for
dematerialization with both the Depositories viz., Central Depository
Services (India) Limited (CDSL) and National Securities Depository
Limited (NSDL). The ISIN allotted to your Company''s equity shares is
INE435D01014.
ACKNOWLEDGEMENTS
Your Directors are grateful to the Shareholders for their support and
co-operation extended to the Company for many years. The Directors also
thank the Banks namely State Bank of India and State Bank of Mysore for
their co-operation and support. The Directors wish to place on record
the support and encouragement received from the Department of Tourism,
Government of India, Karnataka State Government and Foreign
collaborators M/s.Le Meridien. The Directors also acknowledge the
dedicated services rendered by the officers and all the staff of the
Company.
For and on behalf of the Board
C.B. Pardhanani
Chairman
Bangalore
4 August 2014
Mar 31, 2013
TO THE MEMBERS
The Directors have pleasure in presenting the 33rd Annual Report of
the Company together with the Audited Statement of Accounts for the
year ended 31 March 2013.
FINANCIAL RESULTS
(In Rs.)
Particulars 2012-13 2011-12
Total Income 54''21''62''126 51''79''25''539
Profit before Depreciation''
Finance Costs and Tax 22''10''44''883 16''83''55''790
Less : Depreciation 6''31''18''373 6''00''16''382
Less : Finance Costs 9''37''458 6''05''149
Profit before Tax &
Exceptional Item 15''69''89''053 10''77''34''259
Add : Exceptional Items 6''75''99''996 10''18''12''075
Profit before Tax 22''45''89''049 20''95''46''334
Less : Provision of Tax 6''56''85''278 6''00''98''579
Profit after Tax 15''89''03''771 14''94''47''755
Add : Balance brought
forward from the previous year 15''16''28''212 11''32''35''061
Amount available for
Appropriation 31''05''31''983 26''26''82''816
APPROPRIATIONS
(i) General Reserves 1''60''00''000 2''00''00''000
(ii) Dividend : 7''86.06''312 7''86''06''312
iii) Corporate Dividend Tax 1''33''59''143 1''24''48''292
iv) Balance carried to
Balance Sheet 20''25''66''528 15''16''28''212
HOTEL OPERATIONS
During the year under report'' the economy in general and Hotel business
in particular has not done well especially in the face of sluggish
economy and severe competition from the new five star hotels which are
taking their share of the existing hotel business which has not grown
in pace with the additional new five star hotels opened in Bangalore.
As a result the Hotel room occupancy and room tariffs have dropped
considerably. In spite of this scenario'' the sales turnover of the
Company has increased from Rs.5179 lakhs to Rs.5422 lakhs.
FUTURE PROSPECTS
The future of the hotel industry is facing tough times ahead in view of
cost cutting measures initiated by the corporate companies in the
sluggish economy prevailing worldwide. In addition there is substantial
increase in supply side of the five star hotels in Bangalore resulting
in low occupancy and undercutting of rates. However'' the Company is
striving hard to get more business through various marketing
initiatives.
FINANCE
During the year under report'' the financial position of the Company has
further been strong despite the fall in Hotel business. The Company''s
diversification into electricity generation through Wind Turbine
Generators and other sources of income have helped the bottomline. The
segment performance is furnished elsewhere in this Annual Report.
DIVIDEND
Your Directors have recommended a dividend of Rs.6/- per Equity Share
for the financial year ended March 31'' 2013'' amounting to
Rs.9''19''65''455/- (inclusive of tax of Rs.1''33''59''143/-). The said
dividend'' if approved at the ensuing Annual General Meeting'' will be
paid to those shareholders whose names appear in the Register of
Members as on 5th September'' 2013.
DIRECTORS
Mr. M.R.Prasanna resigned from the Board w.e.f. 28th May 2013. The
Board has co-opted Mr. Suresh Vaswani as a Director till the ensuing
Annual General Meeting.
DIRECTORS'' RESPONSIBILITY STATEMENT
Pursuant to the provisions of Section 217(2AA) of the Companies Act''
1956'' the Board of Directors'' based on the representations received
from the Operating Management'' hereby confirms that :
(i) in the preparation of the annual accounts'' the applicable
accounting standards have been followed and that there are no material
departures ;
(ii) it has in the selection of the accounting policies'' consulted the
Statutory Auditors and has applied them consistently and made
judgements and estimates that are reasonable and prudent'' so as to give
a true and fair view of the state of affairs of the Company as at March
31'' 2013 and of the profit of the Company for that period;
(iii) it has taken proper and sufficient care for the maintenance of
adequate accounting records in accordance with the provisions of the
Act for safeguarding the assets of the Company and for preventing and
detecting fraud and other irregularities'' to the best of its knowledge
and ability. There are however'' inherent limitations'' which should be
recognized while relying on any system of internal control and records;
and
(iv) it has prepared the annual accounts on a going concern basis.
FOREIGN EXCHANGE EARNINGS AND OUTGO
Foreign Exchange Earnings during the year were Rs.1816 lacs which is
34% of the Hotel Sales Turnover. The Foreign Exchange utilisation
during the year was Rs.469 lacs.
SUBSIDIARY COMPANIES
At the beginning of the year'' the Company had one Subsidiary Company''
Airport Golf View Hotels & Suites Pvt. Ltd.'' Kochi.
As required under the Listing Agreements with the Stock Exchanges'' a
Consolidated Financial Statement of the Company and its Subsidiary is
attached. The Consolidated Financial Statements have been prepared in
accordance with the relevant Accounting Standards as prescribed under
Section 211(3C) of the Companies Act'' 1956 ("Act"). These financials
statements disclose the assets'' liabilities'' income'' expenses and other
details of the Company'' its subsidiary.
Pursuant to the provision of Section 212(8) of the Act'' the Ministry of
Corporate Affairs vide its circular dated February 8'' 2011 has granted
general exemption from attaching the Balance Sheet'' Profit and Loss
Account and other documents of the subsidiary Company with the Balance
Sheet of the Company. A statement containing brief financial details of
the Company''s subsidiaries for the financial year ended March 31'' 2013
is included in the Annual Report. The annual accounts of these
subsidiary and the related detailed information will be made available
to any member of the Company/ its subsidiary seeking such information
at any point of time and are also available for inspection by any
member of the Company/its subsidiary at the registered office of the
Company. The annual accounts of the said subsidiary will also be
available for inspection'' as above'' at the Head Office/Registered
Office of the respective subsidiary company. The Company shall furnish
a copy of details of annual accounts of subsidiary to any member on
demand.
DUES TO SMALL SCALE UNDERTAKINGS
There are no dues payable to small scale undertakings.
CORPORATE GOVERNANCE
Members are aware that the Corporate Governance code has become a
statutory requirement as per listing guidelines framed by the Stock
Exchanges. Members will be happy to know that their Company is
complying with the stipulations of the new code as on date. In line
with this requirement of the code'' a Corporate Governance Report and a
Management Discussion and Analysis Report of the Company is furnished
elsewhere in this Annual Report.
ENERGY CONSERVATION
Conservation of energy continues to be on top priority of the
management. The following energy conservation measures have been
taken:
a) During the year under report'' placed order for two more Wind Turbine
Generators with a capacity of 4.20 MW apart from having existing
capacity of 5.10 MW which generate green electricity of about 1.25
crore units p.a. of green power which is being utilized partially for
captive consumption of the Hotel and the balance units generated is
being sold to Govt. of Karnataka/ third party consumers.
b) an effective key-tag system is in vogue in all guest rooms to switch
off lights & power connections automatically.
c) substantially switched over to LED lamps from conventional lamps
with a view to saving energy upto 60% on lighting.
d) installed solar panels which are feeding hot water required for the
guest rooms.
e) imported and installed three highly fuel efficient screw chillers
for our AC plant.
f) replaced windows with double glazed reflective glass with a view to
save power on AC consumption.
g) installed two on load tap charger transformers for stabilising
voltage fluctuations and thereby to save power and prevent damage to
electric motors and other installations.
h) thermostatic Controls'' Timers and Photo Cell Switches have been
installed wherever necessary to control power consumption.
i) imported and installed two temperature control systems to reduce
power consumption.
j) constituted an energy conservation committee to monitor power
consumption regularly.
TECHNOLOGY ABSORPTION
In the opinion of the Board'' the required particulars'' pertaining to
technology absorption in terms of Rule 2 of the Companies (Disclosure
of Particulars in the Report of Board of Directors) Rules'' 1988 are not
applicable as hotel forms part of the service industry and the Company
does not have any significant manufacturing operations. However'' the
management has been adopting the latest technology like LCD TV systems''
high speed internet installed in all the guest rooms'' latest high speed
computers'' modern guest amenities'' best audio-video equipment'' newest
model transport vehicles for complimentary transport of hotel guests''
video conferencing facility'' latest models of soundfree fridges in
guest rooms and various latest hotel operational equipments. Further
the Hotel has been conforming to the stringent Le Meridien''s
International Standards.
PARTICULARS OF EMPLOYEES
Information under section 217(2A) of the Companies Act. 1956'' read with
Companies (particulars of employees) Rules'' 1975'' is appended below :
Particulars of employees pursuant to the provisions of Section 217(2A)
of the Companies Act'' 1956 :
EMPLOYEES
The relationship with employees has been cordial. The total number of
persons employed by the Company is 368 as at 31 March 2013.
AUDIT COMMITTEE
The Audit Committee comprises of Mr. P. B. Appiah'' Mr. C.B. Pardhanani
and Mr. M.R.B.Punja. The Audit Committee is discharging its duties and
functions in consultation with the Internal and Statutory Auditors: (a)
To review the adequacy of the internal control system and internal
Audit Reports and their compliance thereof: (b) To oversee the
Company''s financial reporting process and the disclosure of its
financial information to ensure that the financial statements are
correct'' sufficient and credible: and (c) To review with the
management'' the financial statements before submission to the Board.
AUDITORS'' REPORT ON CORPORATE GOVERNANCE
As required by Clause 49 of the Listing Agreement'' the Auditor''s
Certificate is given as an annexure to Directors Report.
AUDITORS
M/s. K.B. Nambiar & Associates'' Chartered Accountants'' retire at the
forthcoming Annual General Meeting and being eligible offer themselves
for re-appointment.
INTERNAL AUDITORS
M/s. B.P. Rao & Company'' Internal Auditors have been conducting
quarterly audits of all operations of the Company and their findings
have been reviewed regularly by the Audit Committee. Your Directors
note with satisfaction that no material deviations from the prescribed
policy and procedures have been observed.
DEMATERIALISATION
The equity shares of the Company have been admitted for
dematerialization with both the Depositories viz.'' Central Depository
Services (India) Limited (CDSL) and National Securities Depository
Limited (NSDL). The ISIN allotted to your Company''s equity shares is
INE435D01014.
ACKNOWLEDGEMENTS
Your Directors are grateful to the Shareholders for their support and
co-operation extended to the Company for many years. The Directors also
thank the Banks namely State Bank of India and State Bank of Mysore for
their co-operation and support. The Directors wish to place on record
the support and encouragement received from the Department of Tourism''
Government of India'' Karnataka State Government and Foreign
collaborators M/s.Le Meridien. The Directors also acknowledge the
dedicated services rendered by the officers and all the staff of the
Company.
For and on behalf of the Board
Bangalore C.B. Pardhanani
30 July 2013 Chairman
Mar 31, 2012
The Directors have pleasure in presenting the 32nd Annual Report of
the Company together with the Audited Statement of Accounts for the
year ended 31 March 2012.
FINANCIAL RESULTS
(In Rs.)
Particulars 2011-12 2010-11
Total Income 51,79,25,539 60,71,55,528
Profit before Depreciation,
Finance Costs and Tax 16,83,55,790 26,79,26,918
Less : Depreciation 6,00,16,382 5,38,41,295
Less : Finance Costs 6,05,149 7,07,462
Profit before Tax &
Exceptional Item 10,77,34,259 21,33,78,164
Add : Exceptional Items 10,18,12,075 13,95,99,356
Profit before Tax 20,95,46,334 35,29,77,520
Less : Provision of Tax 6,00,98,579 7,20,88,574
Profit after Tax 14,94,47,755 28,08,88,946
Add : Balance brought
forward from the previous year 11,32,35,061 7,37,29,638
Amount available for
Appropriation 26,26,82,816 35,46,18,584
APPROPRIATIONS
(i) General Reserves 2,00,00,000 15,00,00,000
(ii) Dividend : 7,86,06,312 7,86,06,312
A dividend of 60% i.e.,
Rs.6/- per equity share was
recommended by the Board of
Directors on July 24 2012
iii) Corporate Dividend Tax 1,24,48,292 1,27,77,211
iv) Balance carried to
Balance Sheet 15,16,28,212 11,32,35,061
26,26,82,816 35,46,18,584
HOTEL OPERATIONS
During the year under report, the economy has not recovered from
economic recession especially in the developed countries. The Indian
economy has also not recovered resulting in lower Hotel room occupancy
and average room rate. Hence, sales turnover of the Company has
decreased from Rs.6071.56 lakhs to Rs.5179.26 lakhs as compared to the
previous year. During the year under report, the hotel business is hit
by the entry of new five star hotels in the city of Bangalore resulting
in stiff competition. Hence, it will be difficult to improve the
working results in current financial year.
FUTURE PROSPECTS
The future of the hotel industry is entirely dependent on the state of
the country's economy. The outlook for the Financial Year 2012-13 is
tough due to severe competition with added new five star hotels in the
city of Bangalore and slowing down of the global & local economy in
general. However the Company is taking effective steps to strengthen
and promote sales & marketing initiatives.
FINANCE
During the year under report, the financial position of the Company has
further been strong despite the fall in Hotel business. The Company's
diversification into electricity generation through Wind Turbine
Generators and other sources of income have helped the bottom-line. The
segment performance is furnished elsewhere in this Annual Report.
However, the ongoing renovation of the Hotel is consuming the
substantial funds of the Company.
DIVIDEND
Your Directors have recommended a dividend of Rs.6/- per Equity Share
(last year Rs.12/- per equity share on pre-bonus share capital) for the
financial year ended March 31, 2012, amounting to Rs.9,10,54,604/-
(inclusive of tax of Rs.1,24,48,292/-). The said dividend, if approved
at the ensuing Annual General Meeting, will be paid to those
shareholders whose names appear in the Register of Members as on 24th
August, 2012.
BONUS SHARES
During the year under report, the Company has issued bonus shares to
the existing shareholders in the ratio of 1:1.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to the provisions of Section 217(2AA) of the Companies Act,
1956, the Board of Directors, based on the representations received
from the Operating Management, hereby confirms that :
(i) in the preparation of the annual accounts, the applicable
accounting standards have been followed and that there are no material
departures ;
(ii) it has in the selection of the accounting policies, consulted the
Statutory Auditors and has applied them consistently and made
judgments and estimates that are reasonable and prudent, so as to give
a true and fair view of the state of affairs of the Company as at March
31, 2012 and of the profit of the Company for that period ;
(iii) it has taken proper and sufficient care for the maintenance of
adequate accounting records in accordance with the provisions of the
Act for safeguarding the assets of the Company and for preventing and
detecting fraud and other irregularities, to the best of its knowledge
and ability. There are however, inherent limitations, which should be
recognized while relying on any system of internal control and records;
and
(iv) it has prepared the annual accounts on a going concern basis.
FOREIGN EXCHANGE EARNINGS AND OUTGO
Foreign Exchange Earnings during the year were Rs.2,225.29 lacs which
is 43% of the Hotel Sales Turnover. The Foreign Exchange utilization
during the year was Rs.233.60 lacs.
SUBSIDIARY COMPANIES
At the beginning of the year, the Company had one Subsidiary Company,
Airport Golf View Hotels & Suites Pvt. Ltd.
As required under the Listing Agreements with the Stock Exchanges, a
Consolidated Financial Statement of the Company and its Subsidiary is
attached. The Consolidated Financial Statements have been prepared in
accordance with the relevant Accounting Standards as prescribed under
Section 211(3C) of the Companies Act, 1956 ("Act"). These
financial statements disclose the assets, liabilities, income,
expenses and other details of the Company, its subsidiary.
Pursuant to the provision of Section 212(8) of the Act, the Ministry of
Corporate Affairs vide its circular dated February 8, 2011 has granted
general exemption from attaching the Balance Sheet, Profit and Loss
Account and other documents of the subsidiary Company with the Balance
Sheet of the Company. A statement containing brief financial details of
the Company's subsidiaries for the financial year ended March 31,
2012 is included in the Annual Report. The annual accounts of these
subsidiary and the related detailed information will be made available
to any member of the Company/ its subsidiary seeking such information
at any point of time and are also available for inspection by any
member of the Company/its subsidiary at the registered office of the
Company. The annual accounts of the said subsidiary will also be
available for inspection, as above, at the Head Office/Registered
Office of the respective subsidiary company. The Company shall furnish
a copy of details of annual accounts of subsidiary to any member on
demand.
DUES TO SMALL SCALE UNDERTAKINGS
There are no dues payable to small scale undertakings.
CORPORATE GOVERNANCE
Members are aware that the Corporate Governance code has become a
statutory requirement as per listing guidelines framed by the Stock
Exchanges. Members will be happy to know that their Company is
complying with the stipulations of the new code as on date. In line
with this requirement of the code, a Corporate Governance Report and a
Management Discussion and Analysis Report of the Company is furnished
elsewhere in this Annual Report.
ENERGY CONSERVATION
Conservation of energy continues to be on top priority of the
management. The following energy conservation measures have been
taken:
a) During the year under report, placed order for two more Wind Turbine
Generators with a capacity of 3.00 MW apart from existing one number of
2.10 MW and two numbers of 1.50 MW each environment friendly Wind
Turbine Generators which generate electricity of about 1.15 crore units
p.a. of green power which will be utilized partially for captive
consumption of the Hotel and the balance units generated is being sold
to Govt. of Karnataka/ third party consumers.
b) an effective key-tag system is in vogue in all guest rooms to switch
off lights & power connections automatically.
c) substantially switched over to CFL & LED lamps from conventional
lamps with a view to saving energy up to 60% on lighting.
d) installed solar panels which are feeding hot water required for the
guest rooms.
e) imported and installed three highly fuel efficient screw chillers
for our AC plant.
f) replaced windows with double glazed reflective glass with a view to
save power on AC consumption.
g) installed two on load tap charger transformers for stabilizing
voltage fluctuations and thereby to save power and prevent damage to
electric motors and other installations.
h) thermostatic Controls, Timers and Photo Cell Switches have been
installed wherever necessary to control power consumption.
i) imported and installed two temperature control systems to reduce
power consumption.
j) constituted an energy conservation committee to monitor power
consumption regularly.
TECHNOLOGY ABSORPTION
In the opinion of the Board, the required particulars, pertaining to
technology absorption in terms of Rule 2 of the Companies (Disclosure
of Particulars in the Report of Board of Directors) Rules, 1988 are not
applicable as hotel forms part of the service industry and the Company
does not have any significant manufacturing operations. However, the
management has been adopting the latest technology like LCD TV systems,
high speed internet installed in all the guest rooms, latest high speed
computers, modern guest amenities, best audio-video equipment, newest
model transport vehicles for complimentary transport of hotel guests,
video conferencing facility, latest models of sound free fridges in
guest rooms and various latest hotel operational equipments. Further
the Hotel has been conforming to the stringent Le Meridian's
International Standards.
PARTICULARS OF EMPLOYEES
Information under section 217(2A) of the Companies Act. 1956, read with
Companies (particulars of employees) Rules, 1975, is appended below :
Particulars of employees pursuant to the provisions of Section 217(2A)
of the Companies Act, 1956 :
Employed throughout the year :
Name Ms. S. C. Pardhanani Mr. M.S. Reddy* Mr. G. Vijay
Age 43 Years 58 Years 50 years
Remuneration Rs.98,02,275/- Rs.21,85,420/- Rs.32,21,488/-
Qualification B.Com., DBM B.Com.,L.L.B., B.com.,Diploma
in Hotel
MBIM., from
London, UK, Mgmt.from
Florida, USA,
FCA, FCS Advance Mgmt.
from Cornell
University,
USA
Experience 9 Years 31 years 25 years
Date of
commencement
of employment 01.10.2002 13.08.1983 01.10.2005
Last Employ
ment held Executive
Director - Company
Secretary &
Chief Director of
Operation,
Harsha
Mac Charles
(India) Ltd. Accounts
Officer, Sri
Krishna Hospitality
Management,
Rajendra
Mills Ltd.,
Mysore USA
Designation Managing
Director Vice Presi
dent Finance
and Vice President
and
Company
Secretary Director of
Development
Note : Ms. S. C. Pardhanani, Managing Director is the daughter of Mr.
C.B.Pardhanani, the Chairman of the Company.
*He retired on 18.06.2012 and he has been reappointed on two year
contract basis w.e.f. 01.07.2012 in the same capacity on full time
basis.
EMPLOYEES
The relationship with employees has been cordial. The total number of
persons employed by the Company is 387 as at 31 March 2012.
AUDIT COMMITTEE
The Audit Committee comprises of Mr. C.B. Pardhanani, Mr. P. B.
Appiah, Mr. J. Matthan, who resigned with effect from 28th July, 2011
and Mr. M.R.B. Punja who has been inducted as a member of the Audit
Committee with effect from 28th July, 2011. Mr. P.B. Appiah, became
Chairman of the Audit Committee with effect from 28th July, 2011. The
Audit Committee is discharging its duties and functions in consultation
with the Internal and Statutory Auditors:
(a) To review the adequacy of the internal control system and internal
Audit Reports and their compliance thereof; (b) To oversee the
Company's financial reporting process and the disclosure of its
financial information to ensure that the financial statements are
correct, sufficient and credible; and (c) To review with the
management, the financial statements before submission to the Board.
AUDITORS' REPORT ON CORPORATE GOVERNANCE
As required by Clause 49 of the Listing Agreement, the Auditor's
Certificate is given as an annexure to Directors Report.
AUDITORS
M/s. K.B. Nambiar & Associates, Chartered Accountants, retire at the
forthcoming Annual General Meeting and being eligible offer themselves
for re-appointment.
INTERNAL AUDITORS
M/s. B.P. Rao & Company, Internal Auditors have been conducting
quarterly audits of all operations of the Company and their findings
have been reviewed regularly by the Audit Committee. Your Directors
note with satisfaction that no material deviations from the prescribed
policy and procedures have been observed.
DELISTING FROM BANGALORE STOCK EXCHANGE
The Company has delisted the shares of the Company from Bangalore Stock
Exchange as there was no trading and does not provide any tangible
benefit to the shareholders of the Company for the last several years.
DEMATERIALISATION
The equity shares of the Company have been admitted for
dematerialization with both the Depositories viz., Central Depository
Services (India) Limited (CDSL) and National Securities Depository
Limited (NSDL). The ISIN allotted to your Company's equity shares is
INE435D01014.
ACKNOWLEDGEMENTS
Your Directors are grateful to the Shareholders for their support and
co-operation extended to the Company for many years. The Directors also
thank the Banks namely State Bank of India and State Bank of Mysore for
their co-operation and support. The Directors wish to place on record
the support and encouragement received from the Department of Tourism,
Government of India, Karnataka State Government and Foreign
collaborators M/s.Le Meridien. The Directors also acknowledge the
dedicated services rendered by the officers and all the staff of the
Company.
For and on behalf of the Board
Bangalore C.B. Pardhanani
24 July 2012 Chairman
Mar 31, 2011
TO THE MEMBERS
The Directors have pleasure in presenting the 31st Annual Report of
the Company together with the Audited Statement of Accounts for the
year ended 31 March 2011
FINANCIAL RESULTS
(Rs. in Lakhs)
2010-11 2009-10
Sales Turnover 5095.77 4152.08
Other Income 2850.90 2776.26
Expenditure 4416.90 3707.51
Provision for Taxation 720.88 696.04
Profit for the year 2808.89 2524.79
Profit brought forward from previous year 737.30 555.52
Dividend including Corporate Dividend Tax 913.84 843.02
Transfer to General Reserve 1500.00 1500.00
Profit transfer to Balance Sheet 1132.35 737.30
Earning Per Share 42.88 38.54
HOTEL OPERATIONS
During the year under report, the economy recovered partly from
economic recession especially in the developed countries. The Indian
economy has also recovered resulting in higher Hotel room occupancy and
average room rate. Hence, sales turn over has increased from Rs.4152
lakhs to Rs.5096 lakhs. During the current financial year 2011-12, the
hotel business is hit by the entry of new five star hotels in the city
of Bangalore resulting in stiff competition and undercutting of room
tariffs. Hence, it will be difficult to maintain the same working
results in current financial year.
FUTURE PROSPECTS
The future of the hotel industry is entirely dependant on the state of
the country's economy. The outlook for the Financial Year 2011 -12 is
tough due to severe competition with added new five star hotels in the
city of Bangalore.
FINANCE
During the year under report, the financial position of the Company has
further been consolidated with significantly increased reserves and
surplus. However, the ongoing renovation of the Hotel is consuming the
major surplus funds of the Company.
DIVIDEND
The Board of Directors have recommended a dividend of Rs. 12/- per
share on share capital of Rs.6.55 crores divided into 65,50,526 equity
shares of Rs. 10/- each. The said dividend, if approved at the ensuing
Annual General Meeting, will be paid to those shareholders whose names
appear in the Register of Members as on 12th August, 2011.
BONUS ISSUE
The Board of Directors have recommended issue of bonus shares to all
the existing shareholders in the ratio of 1:1 shall rank pari passu
with the existing shares which will be placed at the ensuing Annual
General Meeting for approval.
DIRECTORS' RESPONSIBILITY STATEMENT
The Board of Directors of the Company confirms:
a) Applicable accounting standards have been followed in the
preparation of annual accounts. Material departures therefrom, if any,
are properly explained in the notes on accounts ;
b) The Board of Directors has selected such accounting policies and
applied them consistently and made judgements 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 of the Company for the period ;
c) The Board has taken proper and sufficient care for the maintenance
of adequate accounting records in accordance with the provisions of the
Companies Act for safe-guarding the assets of the Company and for
preventing and detecting fraud and other irregularities; and
d) The Annual Accounts have been prepared for the financial year ended
31 March 2011 on a going concern basis.
FOREIGN EXCHANGE EARNINGS
Foreign Exchange Earnings during the year were Rs.2952 lacs which is
58% of the Hotel Sales Turnover. The Foreign Exchange utilisation
during the year was Rs.765 lacs.
SUBSIDIARY COMPANIES
At the beginning of the year, the Company had one Subsidiary Company,
Airport Golf View Hotels & Suites Pvt. Ltd. (formerly known as Nedstar
Hotels Pvt. Ltd.)
As required under the Listing Agreements with the Stock Exchanges, a
Consolidated Financial Statement of the Company and its Subsidiary is
attached. The Consolidated Financial Statements have been prepared in
accordance with the relevant Accounting Standards as prescribed under
Section 211(3C) of the Companies Act, 1956 ("Act"). These financials
statements disclose the assets, liabilities, income, expenses and other
details of the Company, its subsidiary.
Pursuant to the provision of Section 212(8) of the Act, the Ministry of
Corporate Affairs vide its circular dated February 8, 2011 has granted
general exemption from attaching the Balance Sheet, Profit and Loss
Account and other documents of the subsidiary Company with the Balance
Sheet of the Company. A statement containing brief financial details of
the Company's subsidiaries for the financial year ended March 31, 2011
is included in the Annual Report. The annual accounts of these
subsidiary and the related detailed information will be made available
to any member of the Company/ its subsidiary seeking such information
at any point of time and are also available for inspection by any
member of the Company/its subsidiary at the registered office of the
Company. The annual accounts of the said subsidiary will also be
available for inspection, as above, at the Head Office/Registered
Office of the respective subsidiary company. The Company shall furnish
a copy of details of annual accounts of subsidiary to any member on
demand.
DUES TO SMALL SCALE UNDERTAKINGS
There are no dues payable to small scale undertakings.
CORPORATE GOVERNANCE
Members are aware that the Corporate Governance code has become a
statutory requirement as per listing guidelines framed by the Stock
Exchanges. Members will be happy to know that their Company is
complying with the stipulations of the new code as on date. In line
with this requirement of the code, a Corporate Governance Report and a
Management Discussion and Analysis Report of the Company is furnished
elsewhere in this Annual Report.
ENERGY CONSERVATION
Conservation of energy continues to be on top priority of the
management. The following energy conservation measures have been taken:
a) During the year under report, placed order for one more Wind Turbine
Generator with a capacity of 2.10 MW apart from existing one number of
2.10 MW and two numbers of 1.50 MW each environment friendly Wind
Turbine Generators which generate electricity of about 1.20 crore units
p.a. of green power which will be utilized partially for captive
consumption of the Hotel and the balance units generated is being sold
to Govt, of Karnataka/third parties.
b) an effective key-tag system is in vogue in all guest rooms to switch
off lights & power connections automatically.
c) substantially switched over to PL lamps from conventional lamps with
a view to saving energy upto 60% on lighting.
d) installed solar panels which are feeding hot water required for the
guest rooms.
e) imported and installed three highly fuel efficient screw chillers
for our AC plant.
f) replaced windows with double glazed reflective glass with a view to
save power on AC consumption.
g) installed two on load tap charger transformers for stabilising
voltage fluctuations and thereby to save power and prevent damage to
electric motors and other installations.
h) thermostatic Controls, Timers and Photo Cell Switches have been
installed wherever necessary to control power consumption.
i) imported and installed two temperature control systems to reduce
power consumption.
j) constituted an energy conservation committee to monitor power
consumption regularly.
TECHNOLOGY ABSORPTION
In the opinion of the Board, the required particulars, pertaining to
technology absorption in terms of Rule 2 of the Companies (Disclosure
of Particulars in the Report of Board of Directors) Rules, 1988 are not
applicable as hotel forms part of the service industry and the Company
does not have any significant manufacturing operations. However, the
management has been adopting the latest technology like LCD TV systems,
high speed internet installed in all the guest rooms, latest high speed
computers, modern guest amenities, best audio-video equipment, newest
model transport vehicles for complimentary transport of hotel guests,
video conferencing facility, latest models of soundfree fridges in
guest rooms and various latest hotel operational equipments. Further
the Hotel has been conforming to the stringent Le Meridien's
International Standards.
PARTICULARS OF EMPLOYEES
Information under section 217(2A) of the Companies Act. 1956, read with
Companies (particulars of employees) Rules, 1975, is appended below :
Particulars of employees pursuant to the provisions of Section 217(2 A)
of the Companies Act, 1956 :
Employed throughout the year :
Name Ms.Sangeeta C. Pardhanani
Age 42 Years
Remuneration Rs.1,08,27,801/-
Qualification B.Com., DBM
Experience 9 Years
Date of commencement
of employment 01.10.2002
Last Employment held Executive Director -
Mac Charles (India) Ltd.
Designation Managing Director
Name
Mr. M.S. Reddy
Age
57 Years
Remuneration
Rs. 17,90,577/-
Qualification
B.Com.,L.L.B.,
MBIM., from London, UK,
FCA, FCS
Experience
31 years
Date of commencement of employment
13.08.1983
Last Employment held
CompanySecretary & Chief Accounts Officer, Sri Krishna Rajendra Mills
Ltd., Mysore
Designation
Vice President Finance and Company Secretary
Name
Mr. G Vijay
Age
49 years
Remuneration
Rs.25,92,528/-
Qualification
B.com.,Diploma in Hotel Mgmt.from Florida, USA, Advance Mgmt. from
Cornell University, USA
Experience
25 years
Date of commencement of employment
01.10.2005
Last Employment held
Director of Operation, Harsha Hospitality Management, USA
Designation
Vice President and Director of Development
Note : Ms.Sangeeta C. Pardhanani, Managing Director is the daughter of
Mr. C.B.Pardhanani, the Chairman of the Company.
EMPLOYEES
The relationship with employees has been cordial. The total number of
persons employed by the Company is 411 as at 31 March 2011.
DIRECTORS
During the year, Mr. K. R. Sampath, ceased to be Director with effect
from 31 st August, 2010, as he retired by rotation at the previous
Annual General Meeting held on 31 st August, 2010 and did not seek
reappointment. Mr. J. Matthan resigned from the Board on 28th July,
2011 due to his old age. Your Directors place on record their
appreciation for the services rendered by Mr. K. R. Sampath and Mr. J.
Matthan during their tenure as Directors of your Company. During the
year, the Board has co-opted Mr. M. R. Prasanna and Mr. M. R. B. Punja
as independent Directors till the ensuing Annual General Meeting.
AUDIT COMMITTEE
The Audit Committee comprising of Mr. C.B. Pardhanani, Mr. J. Matthan,
Mr. M.R.B. Punja (w.e.f. 29th June, 2011) and Mr. P.B. Appiah, all
Directors of the Company with Mr. J. Matthan as the Chairman,
discharged its duties and functions in consultation with the Internal
and Statutory Auditors: (a) To review the adequacy of the internal
control system and internal Audit Reports and their compliance thereof:
(b) To oversee the Company's financial reporting process and the
disclosure of its financial information to ensure that the financial
statements are correct, sufficient and credible: and (c) To review with
the management, the financial statements before submission to the
Board.
AUDITORS' REPORT ON CORPORATE GOVERNANCE
As required by Clause 49 of the Listing Agreement, the Auditor's
Certificate is given as an annexure to Directors Report.
AUDITORS
M/s. K.B. Nambiar & Associates, Chartered Accountants, retire at the
forthcoming Annual General Meeting and being eligible offer
themselves for re-appointment.
INTERNALAUDITORS
M/s. B.P. Rao & Company, Internal Auditors have been conducting
quarterly audits of all operations of the Company and their findings
have been reviewed regularly by the Audit Committee. Your Directors
note with satisfaction that no material deviations from the prescribed
policy and procedures have been observed.
SECRETARIALAUDIT
As per SEBI Regulations, secretarial audit is being carried out at the
specified periods by a practicing Company Secretary. The findings of
the secretarial audit are satisfactory.
DEMATERIALISATION
The equity shares of the Company have been admitted for
dematerialization with both the Depositories viz., Central Depository
Services (India) Limited (CDSL) and National Securities Depository
Limited (NSDL). The ISIN allotted to your Company's equity shares is
INE435D01014.
ACKNOWLEDGEMENTS
Your Directors are grateful to the Shareholders for their support and
co-operation extended to the Company for many years. The Directors also
thank the Banks namely State Bank of India and State Bank of Mysore for
their co-operation and support. The Directors wish to place on record
the support and encouragement received from the Department of Tourism,
Government of India, Karnataka State Government and Foreign
collaborators M/s.Le Meridien. The Directors also acknowledge the
dedicated services rendered by the officers and all the staff of the
Company.
For and on behalf of the Board
Bangalore C.B. Pardhanani
28 July 2011 Chairman
Mar 31, 2010
The Directors have pleasure in presenting the 30th Annual Report of
the Company together with the Audited Statement of Accounts for the
year ended 31 March 2010.
FINANCIAL RESULTS
Rs. in Lakhs
2009-10 2008-09
Sales Turnover 4152.08 6306.72
Other Income 2776.26 960.34
Expenditure 3707.51 4080.02
Provision for Taxation 696.04 1216.56
Profit for the year 2524.79 1970.48
Profit brought forward from previous year 555.52 551.43
Dividend including
Corporate Dividend Tax 843.02 766.38
Transfer to General Reserve 1500.00 1200.00
Profit transfer to Balance Sheet 737.30 555.52
Earning Per Share 38.54 30.08
HOTEL OPERATIONS
During the year under report, the economy witnessed a global economic
slowdown mainly resulted on account of unprecedented turmoil in the
banking and financial sector in developed countries. The Indian
economy is also affected resulting in lower Hotel room occupancy and
average room rate. Hence, sales turn over has decreased from Rs.6307
lakhs to Rs.4152 lakhs. During the current financial year 2010-11, the
hotel business is improving. Hence, working results will be better.
FUTURE PROSPECTS
The future of the hotel industry is entirely dependant on the state of
the countrys economy. The outlook for the Financial Year 2010-11 is
improving. The demand for hotel accommodation is improving. The
Companys performance is expected to show an improvement.
FINANCE
During the year under report, the financial position of the Company has
further been consolidated with significantly increased reserves and
surplus.
DIVIDEND
The Board of Directors have recommended a dividend of Rs. 11/- per
share on share capital of Rs.6.55 crores divided into 65,50,526 equity
shares of Rs. 10/- each. The said dividend, if approved at the ensuing
Annual General Meeting, will be paid to those shareholders whose names
appear in the Register of Members as on 31st August, 2010.
DIRECTORS RESPONSIBILITY STATEMENT
The Board of Directors of the Company confirms:
a) Applicable accounting standards have been followed in the
preparation of annual accounts. Material departures therefrom, if any,
are properly explained in the notes on accounts;
b) The Board of Directors has selected such accounting policies and
applied them consistently and made judgements 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 of the Company for the period ;
c) The Board has taken proper and sufficient care for the maintenance
of adequate accounting records in accordance with the provisions of the
Companies Act for safe-guarding the assets of the Company and for
preventing and detecting fraud and other irregularities; and
d) The Annual Accounts have been prepared for the financial year ended
March 31 2010 on a going concern basis.
FOREIGN EXCHANGE EARNINGS
Foreign Exchange Earnings during the year were Rs.2325 lacs which is
56% of the Hotel Sales Turnover. The Foreign Exchange utilisation
during the year was Rs.407 lacs.
SUBSIDIARY COMPANIES
During the year under review, your Company has invested 100% share
capital in Messrs. NEDSTAR HOTELS PRIVATE LIMITED (presently known as
AIRPORT GOLF VIEW HOTELS & SUITES PRIVATE LIMITED w.e.f. 18th June,
2010). As required under Section 212 of the Companies Act, 1956, the
Audited Statement of Accounts, the Reports of the Board of Directors
and Auditors of the Subsidiary Companies are annexed.
DUES TO SMALL SCALE UNDERTAKINGS
There are no dues payable to small scale undertakings.
CORPORATE GOVERNANCE
Members are aware that the Corporate Governance code has become a
statutory requirement as per listing guidelines framed by the Stock
Exchanges. Members will be happy to know that their Company is
complying with die stipulations of the new code as on date. In line
with this requirement of the code, a Corporate Governance Report and a
Management Discussion and Analysis Report of the Company is furnished
elsewhere in this Annual Report.
ENERGY CONSERVATION
Conservation of energy continues to be on top priority of the
management. The following energy conservation measures have been taken:
a) During the year under report, installed one more Wind Turbine
Generator with a capacity of 2.10 MW apart from existing two numbers of
1.50 MW each environment friendly Wind Turbine Generators which
generate electricity of about 1.15 crore units p.a. of green power
which will be utilized partially for captive consumption of the Hotel
and the balance units generated is being sold to Govt, of Karnataka.
b) an effective key-tag system is in vogue in all guest rooms to switch
off lights & power connections automatically.
c) substantially switched over to PL lamps from conventional lamps with
a view to saving energy upto 60% on lighting.
d) installed solar panels which are feeding hot water required for the
guest rooms.
e) imported and installed three highly fuel efficient screw chillers
for our AC plant.
f) replaced windows with double glazed reflective glass with a view to
save power on AC consumption.
g) installed two on load tap charger transformers for stabilising
voltage fluctuations and thereby to save power and prevent damage to
electric motors and other installations.
h) thermostatic Controls, Timers and Photo Cell Switches have been
installed wherever necessary to control power consumption.
i) imported and installed two temperature control systems to reduce
power consumption.
j) constituted an energy conservation committee to monitor power
consumption regularly.
TECHNOLOGY ABSORPTION
In the opinion of the Board, the required particulars, pertaining to
technology absorption in terms of Rule 2 of the Companies (Disclosure
of Particulars in the Report of Board of Directors) Rules, 1988 are not
applicable as hotel forms part of the service industry and the Company
does not have any significant manufacturing operations. However, the
management has been adopting the latest technology like LCD TV systems,
high speed internet installed in all the guest rooms, latest high speed
computers, modern guest amenities, best audio-video equipment, newest
model transport vehicles for complimentary transport of hotel guests,
video conferencing facility, latest models of soundfree fridges in
guest rooms and various latest hotel operational equipments. Further
the Hotel has been conforming to the stringent Le Meridiens
International Standards.
PARTICULARS OF EMPLOYEES
Information under section 217(2A) of the Companies Act. 1956, read with
Companies (particulars of employees) Rules, 1975, is appended below :
Particulars of employees pursuant to the provisions of Section 217(2A)
of the Companies Act, 1956 :
Name Ms.Sangeeta
C. Pardhanani Mr. M.S. Reddy Mr. G. Vijay
Age 41 Years 56 Years 48 years
Remuneration Rs.90,31,500/- Rs. 27,03,460/- Rs.27,00,195/-
Qualification B.Com., DBM B.Com.,L.L.B., B.com.,Diploma in
Hotel
MBIM., from London
, UK, Mgmt.from Florida,
USA,
FCA, FCS Advance Mgmt. from
Cornell
University, USA
Experience 8 Years 30 years 24 years
Date of
commencement
of employment 01.10.2002 13.08.1983 01.10.2005
Last Employment
held Executive
Director - CompanySecretary
& Chief Director of
Operation, Harsha
Mac Charles
(India) Ltd. Accounts Officer,
Sri Krishna Hospitality
Management,
Rajendra Mills
Ltd., Mysore USA
Designation Managing Director Vice President
Finance and Vice President and
Company Secretary Director of
Development
EMPLOYEES
The relationship with employees has been cordial. The total number of
persons employed by the Company is 377 as at 31 March 2010.
DIRECTORS
Mrs. Kavita C. Pardhanani, resigned from the Board of Directors during
the year.
Your Directors place on record their appreciation for the services
rendered by Mrs. Kavita C. Pardhanani during her tenure as Director of
your Company.
Out of the present Director, Mr. K. R. Sampath will retire by rotation
at the 30th Annual General Meeting and he is not seeking
re-appointment.
AUDIT COMMITTEE
The Audit Committee comprising of Mr. C.B. Pardhanani, Mr. J. Matthan
and Mr. P.B. Appiah all Directors of the Company with Mr. J. Matthan as
the Chairman, discharged its duties and functions in consultation with
the Internal and Statutory Auditors: (a) To review the adequacy of the
internal control system and internal Audit Reports and their compliance
thereof: (b) To oversee the Companys financial reporting process and
the disclosure of its financial information to ensure that the
financial statements are correct, sufficient and credible: and (c) To
review with the management, the financial statements before submission
to the Board.
AUDITORS REPORT ON CORPORATE GOVERNANCE
As required by Clause 49 of the Listing Agreement, the Auditors
Certificate is given as an annexure to Directors Report.
AUDITORS
M/s. K.B. Nambiar & Associates, Chartered Accountants, retire at the
forthcoming Annual General Meeting and being eligible offer themselves
for re-appointment.
INTERNALAUDITORS
M/s. B.P. Rao & Company, Internal Auditors have been conducting
quarterly audits of all operations of the Company and their findings
have been reviewed regularly by the Audit Committee. Your Directors
note with satisfaction that no material deviations from the prescribed
policy and procedures have been observed.
SECRETARIALAUDIT
As per SEBI Regulations, secretarial audit is being carried out at the
specified periods by a practicing Company Secretary. The findings of
the secretarial audit are satisfactory.
DEMATERIALKATION
The trading of Companys shares are dematerialisation of shares has
been done with Central Depository Services (India) Limited (CDSL) and
National Securities Depository Limited (NSDL).
ACKNOWLEDGEMENTS
Your Directors are grateful to the Shareholders for their support and
co-operation extended to the Company for many years. The Directors also
thank the Banks namely State Bank of India and State Bank of Mysore for
their co-operation and support. The Directors wish to place on record
the support and encouragement received from the Department of Tourism,
Government of India, Karnataka State Government and Foreign
collaborators M/s.Le Meridien. The Directors also acknowledge the
dedicated services rendered by the officers and all the staff of the
Company.
For and on behalf of the Board
Bangalore C.B. Pardhanani
30 June 2010 Chairman
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