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Advani Hotels and Resorts (India) Ltd.

BSE: 523269 | NSE: ADVANIHOTR |

Represents Equity.Intra - day transactions are permissible and normal trading is done in this category
Series: EQ | ISIN: INE199C01026 | SECTOR: Hotels

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Annual Report

For Year :
2018 2016 2015 2014 2013 2012 2011 2010 2009

Director’s Report

Directors’ Report to the Members

The Directors have pleasure to present the 31st Annual Report of your Company together with the audited financial accounts for the year ended March 31, 2018.

1. FINANCIAL RESULTS:

Your Company’s financial performance for the year ended March 31, 2018 is set out as below:

(Rs. in million)

Particulars

March 31, 2018

March 31, 2017

Total Income

638.22

608.56

Profit before Depreciation, Finance Costs and Tax

164.86

183.72

Less: Depreciation

35.19

36.91

Profit before Finance Costs and Tax

129.67

146.81

Less: Finance Costs

0.59

3.21

Profit before Tax

129.08

143.60

Less: Provision for Taxation:

Current Tax

42.70

50.00

Deferred Tax Liability/(Asset)

0.92

2.87

Tax for earlier years

-0.88

1.39

Profit for the year after Tax

86.34

89.34

Other comprehensive Income (OCI) Net of tax

0.92

-0.01

Total Comprehensive Income for the year

87.26

89.33

Profit brought forward from last year

149.52

98.96

Profit available for appropriation

236.78

188.29

Transfer to General Reserve

2.50

5.40

Interim Dividends for the Year

23.11

27.73

Dividend Distribution Tax

4.70

5.64

Balance Profit carried to Balance Sheet

206.47

149.52

Basic and Diluted Earnings per Equity Share of Rs. 2/- each

1.87

1.93

The financial statements have been prepared in accordance with Indian Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules, 2015 read with Section 133 of Companies Act, 2013, (the ‘Act’) and other relevant provisions of the Act. The financial statements up to and for the year ended March 31, 2017, were prepared in accordance with the Companies (Accounting Standards) Rules, 2006, notified under Section 133 of the Act (‘Previous GAAP’). The financial statements for the F.Y. 2017-18 are the first financial statements of the Company under Ind AS. In accordance with Ind AS 101, First-time Adoption of Indian Accounting Standards, the Company has presented a reconciliation from the previous presentation of financial statements of share holders total equity as at March 31, 2017, and April 1, 2016, and of the total comprehensive income for the year ended March 31, 2017, of the Company as a part of financial statements under Previous GAAP to Ind AS. There are no material departures from the prescribed norms stipulated by the Accounting Standards in preparation of the Annual Accounts. Accounting policies have been consistently applied except where a newly issued accounting standard, if initially adopted or a revision to an existing accounting standard, requires a change in the accounting policy hitherto in use. Management evaluates all recently issued or revised accounting standards on an ongoing basis. The Company discloses financial results on a quarterly basis, which are subjected to limited review by the statutory auditors, and publishes audited financial results on an annual basis.

INCOME:

Your Company achieved a total income of Rs. 638.22 Million as compared to Rs. 608.56 Million in the previous year, registering a growth of 4.87 % on a year to year basis. This increase was achieved without any expansion in room or food and beverage facilities.

EARNINGS BEFORE INTEREST, DEPRECIATION, TAX AND AMORTIZATION (EBIDTA)

The Gross Profit before Depreciation, Finance Costs and Tax decreased by 10.27% from Rs. 183.72 Million to Rs. 164.86 Million.

INTEREST:

Interest Costs have reduced significantly from Rs. 3.21 Million to Rs. 0.59 Million. This is due to debt free position of the company. PROFIT BEFORE TAX:

Profit before Tax has decreased by 10.11 % from Rs. 143.60 Million to Rs. 129.08 Million.

PROFIT AFTER TAX:

Profit for the year after Tax has decreased by 3.36% from Rs. 89.34 Million to Rs. 86.34 Million.

2. DIVIDEND:

The Directors recommend, for approval of the members at the ensuing Annual General Meeting of the company to be held on August 9, 2018, payment of Final Dividend of 10% (Re 0.20 per Equity share of Rs. 2/- each). During the year, the Company paid an interim dividend of 25% (Re 0.50 per Equity Share of Rs. 2/- each). The total dividend for the year shall be 35% i.e., Rs. 0.70 per equity share of Rs. 2/- each as against 30% i.e., Rs. 0.60 per equity shares of Rs. 2/- each in the previous year.

3. TRANSFER TO RESERVES:

We propose to transfer Rs. 2.5 Million to the General Reserve out of the amount available for appropriation.

4. UPGRADATION AND ADDITIONS:

Part of the original flooring of the lobby was replaced in 2016-17. A section of the flooring in the outdoor portion of the All Day Dining Restaurant has been replaced in 2017-18 and the rest will be completed by October 2018. The non operational Goa Nugget Casino has been converted to serve both as a pre-function to the existing Banquet Hall or as an independent Conference Room. The Carpet of the existing Banquet Hall has been replaced.

A new Diesel Generator from Cummins has been installed. Several landscaping improvements have taken place. A new Toyota Innova vehicle and a 12 seater luxury coach have been ordered. In addition the Resort procured several new 55-inch Led TVs from Samsung for the guest rooms.

Additional CCTV cameras and related equipments have been procured. New computer servers and an IMCS inventory software have been installed for GST compliant inventory management.

The company has appointed CB Richard Ellis (CBRE) to undertake several works between May to October 2018, such as entire lobby waterproofing, a new service elevator, complete renovation of all 4 employee lockers and toilets, a new carpet for the guest corridor, flooring of certain rooms, installation of a diesel-driven fire pump, procurement of new bakery oven and several other kitchen and F&B equipments, new Wi-Fi architecture, rain water harvesting and over one dozen additional works, which will be completed before the season.

5. SUBSIDIARY / HOLDING COMPANY, ETC.:

The Company does not have any Subsidiary, Holding Company, Associate or Group Venture Company.

6. SUSTAINABLE DEVELOPMENT:

Sustainability has been deeply embedded into the Company’s business and has become an integral part of its decision making process while considering social, economic and environmental dimensions.

7. CORPORATE SOCIAL RESPONSIBILITY (CSR) INITIATIVES:

The Board of Directors at its meeting held on 14th November, 2015 approved the Corporate Social Responsibility (CSR) Policy of the Company. This was duly reviewed and recommended by CSR Committee, in accordance with Section 135 of the Companies Act, 2013 read with the Companies (Corporate Social Responsibility Policy) Rules, 2014.

The thrust areas of CSR Policy, inter alia, are livelihood, healthcare, animal welfare and sanitation. CSR Policy approved by the Board is available on the website of the Company.

Disclosures on CSR activities as required under Rule 9 of the (Corporate Social Responsibility Policy) Rules, 2014, are reported in “Annexure A” forming part of this report.

8. HUMAN RESOURCES DEVELOPMENT:

The Company has continuously adopted a structure that helps attract good external talent and incentivize internal talent to higher roles and responsibilities. AHRIL’s people centric focus, providing an open work environment fostering continuous improvement and development, helped several employees realise their career aspirations during the year.

The Company’s Health and Safety Policy is a commitment to provide a healthy and safe work environment to all employees. The Company’s progressive workplace policies and benefits, employee engagement and welfare initiatives have addressed stress management and promoted work life balance.

9. BUSINESS RISK MANAGEMENT:

The Company has a robust Business Risk Management (BRM) framework to identify, evaluate business risks and opportunities. This framework seeks to create transparency, minimize adverse impact on the business objectives and enhance the Company’s competitive advantage. The business risk framework defines the risk management approach across the enterprise at various levels including documentation and reporting. The framework has different risk models, which help in identifying risk trends, exposure and potential impact analysis at a Company level. Risk management forms an integral part of the Company’s Mid-Term Planning cycle.

10. PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS:

The Company has not granted any loans or provided any guarantees or made investments. Hence no disclosures, which are required under Section 186 of the Companies Act, 2013, are applicable for the year.

11. VIGIL MECHANISM:

Fraud and corruption free culture has been the core of the company. The Company has established a vigil mechanism for reporting of genuine concerns through the Whistle Blower Policy. This Policy, inter alia, provides a direct access to the Chairman of the Audit Committee of the Company. The Whistle Blower Policy is posted on the Company’s website at www.caravelabeachresortgoa.com/investorrelations.

12. DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP):

(a) Appointment/Reappointment: During the year under review, the shareholders of the company have reappointed all three executive directors of the company namely Mr. Sunder G. Advani as Managing Director, Mr. Haresh G. Advani as Executive Director and Mr. Prahlad S. Advani as Whole Time Director of the company for a period of 5 years.

(b) Retirement by rotation: In accordance with the provisions of the Companies Act, 2013, Mrs. Nina H. Advani, Director of the Company, retires by rotation and is eligible for re-appointment.

Further details about the Directors are given in the Corporate Governance Report as well as in the Notice of the ensuing Annual General Meeting being sent to the shareholders along with the Annual Report.

(c) Independent Directors Declaration : The Independent Directors have submitted the Declaration of Independence, as required pursuant to Section 149 of the Companies Act, 2013 and provisions of the SEBI Listing Regulations, stating that they meet the criteria of independence as provided therein.

(d) Evaluation of the Board’s performance: In compliance with the Companies Act, 2013, and Regulation 17 of the SEBI Listing Regulations, the performance evaluation of the Board and its Committees were carried out during the year under review. More details on the same are given in the Corporate Governance Report.

(e) Policy on Directors appointment and remuneration: The Nomination & Remuneration Committee of Directors has approved a Policy for Selection, Appointment and Remuneration of Directors which inter-alia requires that the Directors shall be of high integrity with relevant expertise and experience so as to have a diverse Board. The Policy also lays down the positive attributes/ criteria while recommending the candidature for the appointment as Director.

The Company follows a Policy on Remuneration of Directors, KMP and Senior Management Employees. The policy is approved by the Nomination & Remuneration Committee and the Board. The main objective of the said policy is to ensure that the level and composition of remuneration is reasonable and sufficient to attract, retain and motivate the Directors, KMP and senior management employees. The Remuneration Policy for the Directors and senior management employees is given in the Corporate Governance Report.

(f) Familiarization Programme for Independent Directors: In compliance with the Regulation 25(7) of the SEBI Listing Regulations, the familiarization programme aims to provide Independent Directors with the hospitality industry scenario, the socio-economic environment in which the Company operates, the business model, the operational and financial performance of the Company, significant developments etc, so as to enable them to take well informed decisions in a timely manner. The familiarization programme also seeks to update the Directors on the roles, responsibilities, rights and duties under the Act and other statutes.

The policy on company’s familiarization programme for Independent Directors and the details of familiarization programmes imparted to Independent Directors, including the number of hours spent by each Independent Director in such programmes, is posted on the company’s website at www.caravelabeachresortgoa.com/investorrelations

(g) Key Managerial Personnel: There is no change in the Key Managerial Personnel of the Company during the year.

13. CORPORATE GOVERNANCE:

The Company is committed to maintain the highest standards of Corporate Governance and adhere to the Corporate Governance requirements set out by the Securities and Exchange Board of India (SEBI). The report on Corporate Governance as stipulated under the Listing Regulations forms an integral part of this Report. The requisite certificate from the Auditors of the Company confirming compliance with the conditions of Corporate Governance is attached to the report on Corporate Governance.

14. MANAGEMENT DISCUSSION AND ANALYSIS:

Management’s Discussion and Analysis Report for the year under review, as stipulated under the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“Listing Regulations”), is presented in a separate section, forming part of the Annual Report.

15. SECRETARIAL STANDARDS:

The Directors state that applicable Secretarial Standards, i.e. SS-1 and SS-2, relating to ‘Meetings of the Board of Directors’ and ‘General Meetings’, respectively, have been duly followed by the Company.

16. INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY:

The Company has designed and implemented a process driven framework for Internal Financial Controls (IFC) within the meaning of the explanation in Section 134(5)(e) of the Companies Act, 2013.

The Company’s internal controls system has been established on values of integrity and operational excellence. The formal and independent evaluation of internal controls and initiatives for remedy of deficiencies by the Internal Auditors has resulted in a sound framework for Internal Controls, commensurate with the size and complexity of the business.

The internal control framework essentially has two elements: (1) structures, policies and guidelines designed to achieve efficiency and effectiveness in operations and compliance with laws and regulations; (2) an assurance function provided by Internal Auditors.

The Company also has well-documented Standard Operating Procedures (SOPs) for various processes which are periodically reviewed for changes warranted due to business needs. The Internal Auditors continuously monitor the efficiency of the internal controls/compliance with SOPs with the objective of providing to Audit Committee and the Board of Directors, an independent, objective and reasonable assurance of the adequacy and effectiveness of the organization’s risk management, control and governance processes. This formalized system of internal control facilitates effective compliance of Section 138 of Companies Act, 2013 and the SEBI Listing Regulations.

The Audit Committee meets regularly to review reports, including significant audit observations and follow up actions thereon. The Audit Committee also meets the company’s statutory auditors to ascertain their views on financial statements including the financial reporting system, compliance to accounting policies and procedures, the adequacy and effectiveness of internal control system.

The Internal Auditor also assesses opportunities for improvement in the business processes, designed to add value to the organization and follow ups on the implementation of corrective actions and improvements in the business process after review by the Audit Committee.

For the year ended March 31, 2018, the Board is of the opinion that the Company has sound IFC, commensurate with the nature and size of the business operations, wherein controls are in place and operating effectively and no material weaknesses exist. The Company has a process in place to continuously monitor the existing controls and identify gaps, if any. It can implement new and / or improved controls wherever the effect of such gaps would have a material effect on the Company’s operations.

During the year ended March 31, 2018 there were no reportable incidents of fraud as defined in Section 143(12) of the Companies Act, 2013.

17. DIRECTORS’ RESPONSIBILITY STATEMENT:

Pursuant to the provisions of Section 134(5) of the Companies Act, 2013, the Board of Directors, to the best of their knowledge and ability, confirm that:

(i) In the preparation of the accounts for the financial year ended March 31, 2018, the applicable Accounting Standards have been followed and there are no material departures;

(ii) They have selected such accounting policies and applied them consistently and made judgments and estimates made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2018 and of the profit and loss of the Company for the year ended March 31, 2018;

(iii) They have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act for safeguarding the assets of the Company and for preventing fraud and other irregularities;

(iv) They have prepared the annual accounts for the financial year ended March 31, 2018 on a “going concern” basis;

(v) They have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively;

(vi) They have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

Based on the framework of internal financial controls and compliance systems established and maintained by the Company and work performed by the internal, statutory and secretarial auditors and external consultants, and audit of internal financial controls over financial reporting by the statutory auditors, and the reviews performed by management and the relevant board committees, including the audit committee, the Board is of the opinion that the Company’s internal financial controls were adequate and effective during FY 2017-18.

18. STATUTORY AUDITOR’S REPORT:

The Statutory Auditors’ Report to the Shareholders for the year under review does not contain any qualification, reservations or adverse remarks or disclaimers.

The observations and comments given in the Auditors’ Report read together with the notes to the accounts are self explanatory and hence, do not call for any further information and explanation under Section 134(3) of the Companies Act, 2013.

19. SECRETARIAL AUDITOR’S REPORT:

Pursuant to the requirements of the Companies Act, 2013, the company has appointed Mr. Virendra G. Bhatt, Practicing Company Secretary, to undertake the Secretarial Audit of the Company, whose report dated May 17, 2018, is attached separately to this report as “Annexure B”.

The Secretarial Auditors’ Report to the Shareholders for the year under review does not contain any qualification, reservations or adverse remarks or disclaimers.

The observations and comments given in the Secretarial Auditors’ Report, read together with the notes to the accounts, are self explanatory and hence, do not call for any further information and explanation under Section 134(3) of the Companies Act, 2013.

20. FIXED DEPOSITS:

The Company has not accepted any deposits from the public/members under Section 73 of the Companies Act, 2013 read with Companies (Acceptance of Deposits) Rules, 2014 during the year.

21. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE COURTS OR REGULATOR:

There are no significant material orders passed by the Regulators / Courts which would impact the ‘going concern’ status of the Company and its future operations. However, member’s attention is drawn to the statement on contingent liabilities in the notes forming part of the financial statements.

22. CODE OF BUSINESS CONDUCT:

As per the Listing Agreement, the Board has a ‘Code of Conduct’ in place whereby all Board Members and Senior Management have declared and complied with the said Code. A declaration to this effect signed by the Chairman & Managing Director has been obtained.

23. CONSERVATION OF ENERGY, TECHNOLOGY, ABSORPTION, FOREX EARNINGS AND OUTGO:

As required under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 (3) of the Companies (Accounts) Rules, 2014, the particulars relating to conservation of energy, technology absorption and foreign exchange earnings and outgo are given in Annexure ‘C’ hereto and forms part of this Report.

24. TRANSFER OF UNCLAIMED DIVIDEND:

During the year, the company has transferred unpaid dividend related to financial year 2009-2010 to the Investor Education & Protection Fund (IEPF) as per the requirements of the Companies Act, 2013. The company has also transferred 447,397 Equity shares on which dividend has not been paid or claimed by shareholders for a period of seven consecutive years or more to the Investor Education and Protection Fund established by the Ministry of corporate Affairs.

25. DISCLOSURES UNDER THE COMPANIES ACT, 2013 AND LISTING REGULATIONS:

(i) EXTRACT OF ANNUAL RETURN:

The details forming part of the extract of the Annual Return in form MGT-9 is annexed herewith as “Annexure D”.

(ii) MEETINGS:

The Board of Directors met 7 (seven) times in the financial year 2017-18. The details of the Board Meetings and the attendance of the Directors are provided in the Corporate Governance Report. The gap between the Board Meetings was within the period prescribed under the Companies Act, 2013.

(iii) AUDIT COMMITTEE:

During the year the Board has reconstituted the Audit Committee by adding Dr. S. D. Israni, Independent Director as its member. Now it comprises of Mr. Prakash Mehta as the Chairman and Mr. Vinod Dhall, Dr. S. D. Israni, Mr Adhiraj Harish and Mrs. Menaka S. Advani as members. More details pertaining to the Committee are included in the Corporate Governance Report, which forms part of the Annual Report.

(iv) RELATED PARTY TRANSACTIONS:

All the related party transactions are entered on arm’s length basis, in the ordinary course of business, and are in compliance with the applicable provisions of the Companies Act, 2013 and the Listing Regulations and within the limits of the omnibus approval granted by the Audit Committee and Board of Directors. There are no materially significant related party transactions made by the Company with Promoters, Directors or Key Managerial Personnel etc. which may have potential conflict with the interests of the Company at large or which warrants the approval of the shareholders. Accordingly, no transactions are being reported in Form AOC-2 in terms of Section 134 of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014. However, the details of the transactions with Related Party are provided in the Company’s financial statements in accordance with the Accounting Standards.

All Related Party Transactions are presented to the Audit Committee and the Board. A statement of all related party transactions is presented before the Audit Committee on a quarterly basis, specifying the nature, value and terms and conditions of the transactions. The statement is supported by the certificate from the MD and the CFO. The Related Party Transactions Policy as approved by the Board is uploaded on the Company’s website at: www.caravelabeachresortgoa. com/investorrelations

(v) POLICY ON SEXUAL HARASSMENT OF WOMEN AT WORKPLACE:

The Company has zero tolerance towards sexual harassment at the workplace and towards this end, has adopted a policy in line with the provisions of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules there under. All employees (permanent, contractual, temporary, trainees) are covered under the said policy. An Internal Complaints Committee has also been set up to redress complaints received on sexual harassment.

During the year under review, the Company has received two complaints of sexual harassment from the women employees of the Company. Out of which one complaint was resolved during the year and one complaint was pending at the end of the year.

26. PARTICULARS OF EMPLOYEES:

In terms of the provisions of Section 197(12) of the Act read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended, a statement showing the names and other particulars of the top 10 employees in terms of remuneration drawn and also employees drawing remuneration in excess of the limits set out in the said rules are provided in the Annual Report, which forms part of this Report as “Annexure E”.

Disclosures relating to remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided in the Annual Report, which forms part of this Report..

27. MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY:

There have been no material changes and commitments affecting the financial position of the Company which have occurred between the end of the financial year of the Company, to which the financial statements relate, and the date of this report.

28. ACKNOWLEDGEMENTS:

Your Directors deeply appreciate the assistance provided by the bankers, the Ministry of Finance, Tourism of the Government of India and the Government of Goa. We thank the Shareholders, our valued clients and the tour operators for their continued support. Your Directors also appreciate the contributions made by all employees to improve the operations of the Company.

For and on behalf of the Board of Directors

SUNDER G. ADVANI

Place: Mumbai Chairman & Managing Director

Date: May 17, 2018 (DIN 00001365)

Director’s Report