DIRECTORS' REPORT The Board presents the Thirty-third Annual Report together with the Audited Statement of Accounts and the Auditor's Report in respect of the Financial Year ended 31st March, 2016. Directors' Responsibility Statement in accordance with the provisions of Section 134(5) of the Companies Act, 2013 ("the Act") and based upon representations from the Management, the Board states that: a) in preparing the annual accounts, applicable accounting standards have been followed and there are no material departures; b) the Directors have selected accounting policies, applied them consistently and made judgments and estimates that are reasonable and prudent 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 year; c) the Directors have taken proper and sufficient care in maintaining 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 of the Company on a "going concern" basis; e) the Directors have laid down internal financial controls to be followed by the Company and 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. Performance The annexed Management Discussion and Analysis forms part of this report and covers inter alia the performance of the Company during the Financial Year 2015-2016 as well as the future outlook. Corporate Governance Report In accordance with Regulation 34(3) read with Schedule V(C) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("the Listing Regulations"), the Report on Corporate Governance along with the auditor's certificate is attached to this report. Dividend The Board at its Meeting held on 11th March, 2016, declared an Interim Dividend of Rs. 3.00 per equity share of Rs. 10.00 each in respect of the Financial Year 2015-2016. The Dividend was paid on 23rd March, 2016 to those equity shareholders whose names appeared on the Register of Members as on 19th March, 2016 ("the Record Date"). As per the Income Tax Act, 1961, the tax on dividend was borne by the Company. The Board recommends a further Dividend of Rs. 1.00 per equity share of Rs. 10 each, in respect of the Financial Year 2015-2016. The dividend, if approved at the forthcoming Annual General Meeting will be treated as the Final Dividend for the Financial Year 2015-2016 and will be paid on 6th August, 2016 to shareholders whose names appear in the Register of Members as at the close of business on 26th July, 2016. Directors Mr. P.R.S. Oberoi retires by rotation at the forthcoming Thirty-third Annual General Meeting. He is eligible for reappointment. In accordance with Regulation 36(3) of the Listing Regulations, the particulars of the Director are given in the annexure to the Notice convening the Annual General Meeting. The Directors recommend re-appoinment of Mr. P.R.S. Oberoi as a Director on the Board. Mr. Akshay Raheja was appointed as a Director on the Company's Board with effect from 28th May, 2015 to fill the causal vacancy caused due to resignation of Mr. Rajan Raheja. Mr. Rajan Raheja would have retired by rotation at the forthcoming Annual General Meeting, if he had not vacated his office. The Directors recommend the appointment of Mr. Akshay Raheja as a regular Director at the Thirty-third Annual General Meeting. As required under Section 149(7) of the Act, Mr. Anil Nehru, Mr. L. Ganesh, Mr. Sudipto Sarkar, Mr. Rajesh Kapadia and Ms. Radhika Haribhakti, the Independent Directors, have given their "declaration of independence" for the year 2016-2017. Corporate Social Responsibility ("CSR") In accordance with Section 135 read with the Companies (Corporate Social Responsibility Policy) Rules, 2014, the Company had formulated a Corporate Social Responsibility Policy in 2014-2015. During the year, the Company has amended the Policy to include "caring for the elderly and addressing their health issues" in accordance with clause (iii) of Schedule VII to the Act. The revised CSR Policy can be accessed on the Company's website www.eihassociatedhotels.in The Annual Report on Corporate Social Responsibility activities for the Financial Year 2015-2016 is given in Annexure 1, which forms a part of this Report. The Annexure also gives the composition of the CSR Committee. In addition to the mandatory CSR spend in accordance with the Act, the Company's Hotels have also taken the following CSR initiatives: a. The Oberoi Rajvilas, Jaipur extends assistance to "With care" programmes for the under privileged sections of the society. The hotel also supports SOS Children's Village at Jaipur and Mother Teresa Foundation. Staff from the hotel visited schools in nearby villages to spread awareness of environmental conservation, hygiene and wellness. b. The Oberoi Cecil, Shimla extends its support to Sarvodaya Bal Ashram for orphaned children in Shimla. On 15th August, 2015, the hotel organized an annual blood donation camp for the local blood bank. The World Environment Day was commemorated by observing an Environment Week to create awareness on global warming, pollution and ecological balance. c. Trident Hotels at Agra and Udaipur extend assistance to local chapters of Mother Teresa's Missionaries of Charity. d. Trident Jaipur supports Bhavani Child Development Centre, a school for dyslexic children. The school is involved in providing intensive early intervention for children showing signs of developmental delay and exposed to the risk of learning disability. Audit Committee The composition of the Audit Committee is as under: ¦ Mr. Anil Nehru - Independent Director & Chairperson ¦ Mr. L. Ganesh - Independent Director & Member ¦ Mr. Sudipto Sarkar - Independent Director & Member ¦ Mr. Akshay Raheja - Non-executive Non-Independent Director & Member [inducted as member w.e.f. 7th August, 2015] ¦ Mr. Rajesh Kapadia - Independent Director & Member [resigned from membership w.e.f. 7th January, 2016] For other details relating to Audit Committee, please refer page nos. 39 & 40. Company's Policy on Directors' Appointment and Remuneration and Senior Management Personnel Appointment and Remuneration In accordance with Section 178 of the Act read with Regulation 19 of the Listing Regulations, the Company's Nomination and Remuneration Committee had formulated policies on Directors' Appointment & Remuneration and on Senior Management Personnel Appointment & Remuneration. The updated policies are enclosed as Annexures 2 and 3 and form part of this report. The policies can also be accessed on the Company's website www.eihassociatedhotels.in Energy Conservation Measures Energy conservation measures continue to be a focus area for the Company. Measures taken during the year include: • installation of solar power generation system • renovation of solar water heating system and replacement of fluorescent lamps with energy efficient LED lamps • installation of occupancy sensors at the backside of the house areas • replacement of steam boilers and pumps with energy efficient machinery • replacement of reciprocating chillers with energy efficient screw chillers Besides, various operational measures were taken to reduce energy consumption such as operation control on timing of lighting & other equipments especially in off-season and timely preventive maintenance of equipments to enhance their efficiency. Actions planned for next year include: • installation of heat recovery system for exhaust & fresh air and replacement of treated fresh air units • installation of occupancy sensors at back of the house areas • continued replacement of fluorescent lamps with LED lamps • use of recycled water for flushing Operational measures at hotels driven by focused energy conservation committees continue to closely monitor and control energy consumption. Foreign Exchange Earnings and Outgo During the Financial Year 2015-2016, the foreign exchange earnings of the Company amounted to Rs. 1236.49 Million as against Rs. 1233.40 Million in the previous year. The expenditure in foreign exchange during the Financial Year was Rs. 26.49 Million compared to Rs. 24.36 Million in the previous year. Auditors The Auditors of the Company, M/s. Ray & Ray (FRN 301072E), Chartered Accountants, retire at the forthcoming Annual General Meeting and are eligible for re-appointment. Confirmation has been received from the Auditors that, if reappointed, the appointment will be within the prescribed limits. The Directors recommend the re-appointment of M/s. Ray & Ray as Auditors of the Company for the Financial Year 2016-2017. Secretarial Auditor In accordance with provisions of Section 204 of the Companies Act, 2013, the Company had appointed M/s. JUS & Associates as Secretarial Auditors for the Financial Year ended 31st March, 2016. The Secretarial Audit Report does not contain any qualification, reservation or adverse remarks. The Secretarial Auditor's Report forms part of the Annual Report. Related Party Transactions The Contracts or arrangements or transactions entered into by the Company during the Financial Year with related parties were in the ordinary course of business and are on an arm's length basis. During the year, the Company has not entered into any contract or arrangement or transaction with Related Parties that could be considered material in accordance with the Related Party Transaction policy of the Company. The policy on Related Party Transactions, as approved by the Board, can be accessed on the Company's website www.eihassociatedhotels.in The details of Related Party Transactions are set out in Note no. 40 to the Financial Statement. Extract of Annual Return The Extract of Annual Return for the Financial Year ended 31st March, 2016 in Form MGT-9 is annexed as Annexure 4. Loan, Guarantees or Investments During the year 2015-2016, the Company made an investment of Rs. 47,000 by purchasing 100 equity shares in TCP Limited, a public limited company having its registered office at TCP Sapthagiri Bhavan, No. 4 (old No. 10) Karpagambal Nagar, Mylapore, Chennai-600 004. The investment was made for supply of thermal power to Trident Chennai in order to compensate for the drop in wind energy based power utilised at the hotel. The Company has not given any loan or provided any guarantee in terms of Section 185 of the Companies Act. 2013. Deposits During the year, the Company has not accepted any deposit from the public. Vigil Mechanism/ Whistle blower Policy In accordance with the Section 177(9) of the Act and rules framed thereunder read with Regulation 4(2)(d) and 22 of the Listing Regulations, the Company has a Whistleblower Policy in place for its Directors and Employees to report concerns about unethical behaviour, actual or suspected fraud or violation of the Company's Code of Conduct, "The Oberoi Dharma". The policy provides for protected disclosures that can be made by a whistle blower through e-mail or letter to the Whistle Officer or to the Chairperson of the Audit Committee. The Whistleblower Policy is accessible on the Company's website www.eihassociatedhotels.in During the year ended on 31st March, 2016, the Company did not receive any complaint under the scheme. Board Meetings The Board met six times during the Financial Year, ie. on 28th May, 2015, 7th August, 2015, 6th November, 2015, 29th January, 2016, 11th March, 2016 and 30th March, 2016. Subsidiaries, Associates and Joint Ventures The Company has no subsidiaries, associates or Joint Ventures. Directors/Key Managerial Personnel ("KMP") Remuneration All the Directors of the Company are Non-executive Directors, except Mr. Vikram Oberoi, who is the Managing Director. Mr. Vikram Oberoi does not draw any remuneration from the Company. b) the number of permanent employees on the rolls of the Company as at the end of the Financial Year 2015-2016 is 759; c) the average increase in remuneration of the employees in the Financial Year 2015-2016 over 2014-2015 is 11.2%; d) The remuneration of KMPs are considered as per the common remuneration policy followed for other senior executives. Increase in remuneration is sanctioned by the Management based on the Company performance and the individual's performance. Performance of the Company is given on the first page of the Directors' Report as well as in Management Discussion and Analysis. e) The percentage increase in the median remuneration of the employees in the Financial Year 2015-2016 is 23.63%. f) The market capitalisation of the Company as at the end of the Financial Year 2015-2016 increased by Rs. 2,071.83 Million. The PE ratio as at the close of the Financial Year 2015-2016 was 23.03 as against 27.34 in the previous Financial Year 2014-2015. The Company's current market capitalisation stands at Rs. 9,140.44 Million, based on the opening share price at the BSE as on date. It is hereby affirmed that all remuneration of Directors and KMPs are as per the Remuneration Policy of the Company. Internal Financial Control Systems and Risk Management Systems Compliance of the above is given in the Management Discussion & Analysis on page nos. 34 & 35. Board Evaluation Pursuant to the provisions of the Act and Regulation 17(10) of the Listing Regulations, a Board Evaluation Policy has been put in place. A structured questionnaire covering various aspects of the Board's functioning, Board culture, performance of specific duties by Directors and contribution to the Board proceedings was circulated to the members of the Board. Based on the responses received, the Board as a whole, the Committees, the Chairperson and individual Directors were separately evaluated in the separate meeting of the Independent Directors and at the Meeting of the Board of Directors. The process of review of Non-Independent Directors and the Board as a whole and also its Committees were undertaken in a separate meeting of Independent Directors without the attendance of Non-Independent Directors and members of the Management. At the meeting, the performance of the Chairman of the Company was reviewed taking into account the views of the Executive Director and Non-Executive Directors and Independent Directors. The meeting also assessed the quality, quantity and timeliness of the flow of information required for the Board to perform its duties properly. The entire Board of Directors, excluding the Director being evaluated, evaluated the performance of each Independent Director. The Directors have expressed their satisfaction with the evaluation process. Based on the findings from the evaluation process, the Board will continue to review its procedures and effectiveness in the Financial Year ahead with a view to practising the highest standards of Corporate Governance. Significant and Material orders, if any During the Financial Year 2015-2016, there were no significant or material orders passed by the regulators or courts or tribunals impacting the going concern status and the Company's operation in future. Sexual Harassment No complaints were received during the Financial Year 2015-2016. Particulars of Employees There are no employees in the Company requiring reporting under Section 197 of the Act read with rule 5 of the Companies (Appointment and Remuneration) Rules, 2014. Cautionary Statement Risks, uncertainties or future actions could differ materially from those expressed in the Directors' Report and the Management Discussion and Analysis. These statements are relevant on the date of this report. We have no obligation to update or revise these statements, whether as a result of new information, future developments or otherwise. Therefore undue reliance should not be placed on these statements. Acknowledgement The Board takes this opportunity to thank all employees for their commitment, dedication and co-operation. For and on behalf of the Board VIKRAM OBEROI Managing Director S.S. MUKHERJI Vice Chairman Place : Gurgaon Date : 24th May, 2016 |