Directors' Report To The Members of M/s. Country Club Hospitality & Holidays Limited The Directors are pleased in presenting the 24th Annual Report of the Company together with Audited Annual Accounts for the year ended 31st March, 2015. Financial Results Results of Operations : During the year under review, the turnover of the Company was Rs. 500.46 Crores as compared to Rs. 496.95 Crores for the previous year. The Company is constantly striving to improve its membership, and hopes to achieve better results in the forthcoming year. Outlook : India's travel and tourism industry is one of the most profitable industries in the country, and also credited with contributing a substantial amount of foreign exchange. Indian tourism offers a potpourri of different cultures, traditions, festivals and places of interest. The country is one of the favorite tourist destinations from the year 2009 and will continue to be one of the favorite till 2018, in accordance to world travel and tourism Council (WTTC). Further, the Travel and Tourism Competitiveness Report by World Economic Forum, has ranked India at the sixth place in tourism and hospitality. Key segments of the Indian tourism and hospitality industry are: • Accommodation and catering • Transportation • Attractions • Travel agents • Tour operators The Indian tourism industry has been on an upswing for last few years partially due to an excellent 'Incredible India' campaign and is expected to Rise up to US$ 431.7 billion by the end of 2020. The presence of world-class hospitals and skilled medical professionals make India a preferred destination for medical tourism. Tour operators are teaming up with hospitals to tap this market. Cruise shipping is one of the most dynamic and fastest growing components of the global leisure industry. India, with its vast and beautiful coastline, virgin forests, and undisturbed idyllic islands can be a fabulous tourist destination for cruise tourists. India has potential to develop the rural tourism industry as most of its population resides in rural areas. This can benefit the local community economically and socially, and enable interaction between tourists and locals for a mutually enriching experience. Number of meetings of the board : 9 Board Meetings held during the Financial Year 2014-15. Un-Paid / Un-claimed Dividend Amount : Dividend Account of the Company for the FY 2006 - 2007 of Rs. 7,13,028 (Rupees Seven Lakhs Thirteen Thousand and Twenty Eight Only) has been transferred to Investor Education & Protection Fund Account (IEPF). Share Capital : The Paid-up Share Capital of the Company stands at Rs. 32,69,29,470 (Rupees Thirty Two Crores Sixty Nine Lakhs Twenty Nine Thousand Four Hundred and Seventy Only) as on 31st March, 2015. The entire Paid-up Share Capital of the Company is listed with both the Stock Exchange(s) namely, M/s. Bombay Stock Exchange Limited (BSE) and M/s. National Stock Exchange Of India Limited (NSE). Management Discussion and Analysis : Pursuant to Clause 49 of the Listing Agreement, a report on the management discussion and analysis is enclosed herewith. Investor Education & Protection Fund : The amount which was lying in the Un-claimed Directors : In accordance with the provisions of the Companies Act, 201 3 and the Articles of Association of the Company, Sri. Y Varun Reddy, Vice-Chairman, JMD & COO of the Company who retire by rotation at the 24th Annual General Meeting and being eligible, offer himself for re-appointment. The board has proposed for re-appointment of Sri Y. Siddharth Reddy , who has completed his tenure as Vice-Chairman, JMD & CEO on 01.09.2015 and Sri Y. Rajeev Reddy, who shall complete his tenure as Chairman & Managing Director on 31.03.2016, z for a further period of 5 (five) years with effect from the respective dates. Brief profile of the Directors proposed to be re-appointed stating the nature of their expertise in specific functional areas, their shareholding along with other relevant details are given at the end of the Notice of the Annual General Meeting. The Board recommends their reappointment by the Members at the ensuing 24th Annual General Meeting. None of the directors of the Company are disqualified from being appointed as directors as specified in section 164 of the Companies Act, 2013, as amended. Statement on Declaration given by Independent Directors under Sub-Section (6) of Section 149 of the Companies Act, 2013: The Independent Directors have submitted the Declaration of Independence, as required pursuant to Section 149 (7) of the Companies Act, 2013 stating that they meet the criteria of independence as provided in Sub-Section (6) of section 149 of Companies Act, 2013. Details of Directors or key Managerial Personnel who were appointed or have resigned during the year : Mr. K. Phaneendra Rao, was appointed as Chief Financial Officer of the Company on 14.08.2014 Directors' Responsibility Statement: Pursuant to the requirements under Section 134 of the Companies Act, 2013 with respect to the Directors' Responsibility Statement, the Board of Directors of the Company hereby confirms: (a) that in the preparation of the annual accounts for the Financial year ended 31st March, 2015, the applicable accounting standards have been followed; (b) that the directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2015, and Profit and Loss Statement of the Company for that period; (c) that the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; (d) that the directors have prepared the annual accounts for the financial year ended 31st March, 2015, on a going concern basis; (e) that the directors have laid down internal controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; (f) that the directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such s ys tems were adequate and operating effectively; Related Party Transactions: All the related party transactions are entered on arms length basis and are in compliance with the applicable provisions of the Act and the listing agreement. There are no materially significant related party transactions made by the Company during the Financial Year 2014-15 which may have the potential conflict with the interest of the company at large. Thus disclosure in Form AOC-2 is not required. Further in accordance with the requirements of the listing agreement, the company has formulated policies on related party transactions and material subsidiaries. The policy is available on the website: www.countryclubindia.net Auditors: M/s. P. Murali & Co., Chartered Accountants, Statutory Auditors of the Company, the statutory Auditors of the Company, who holds office until the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment as per section 139 of Companies Act, 2013. M/s. P. Murali & Co., have expressed their willingness to get re-appointed as the statutory auditors of the Company and furnished their certificate of eligibility and consent for their re-appointment under section 141 of the Companies Act, 2013 and the rules framed there under. The Board based upon the recommendations of the Audit committee recommends the appointment of M/s. P. Murali & Co., as the statutory auditors of the Company. The Report given by the Auditors on the financial statements of the Company is part of the Annual Report. There has been no qualification, reservation, adverse remark or disclaimer given by the Auditors in their Report. Types of Committees: The Company has 4 different Committees, they are: a) Audit Committee Composition of the Audit Committee: The Audit Committee for the year was constituted of the following members: Name of the Member Category 1. Sri Y. Subba Rao, Chairman Independent Director 2. Sri D. V. Ratna Kishore, Member Independent Director 3. Sri D. Krishna Kumar Raju, Member Non-Executive Director Mrs. V. Sreelatha, Company Secretary has acted as the Secretary to the Committee. b) Nomination & Remuneration Committee The Nomination and Remuneration Committee for the year was constituted of the following members: Name of the Member Category 1. Sri K. Satyanarayana Raju , Chairman 2. Sri Y. Subba Rao, Member > Independent Director 3. Sri D. V. Ratna Kishore, Member The Company follows a policy on remuneration of directors and other senior managerial personnel's. The Policy is recommended by the Nomination and Remuneration Committee and approved by the Board. More details of the same is given in the Corporate Governance Report. c) Stakeholders Relationship Committee The Stakeholders Relationship Committee was constituted of the following Directors: Name of the Member Category 1. Shri Y. Subba Rao, Chairman 2. Shri Indukuri Venkata Subba Raju, Member > Independent Directors 3. Shri D. V. Ratna Kishore, Member Mrs. V. Sreelatha, Company Secretary has acted as the Secretary to the Committee. d) Corporate Social Responsibility Committee The Corporate Social Responsibility Committee was constituted of the following Directors: Name of the Member Category Statement pursuant to the Listing Agreement : The Company's equity shares are listed on the Bombay Stock Exchange Limited (BSE) and National Stock Exchange of India Limited (NSE) and the Company has paid the annual listing fees up to Financial Year 2015-16. The Company got listed on M/s. National Stock Exchange Of India Limited (NSE) on 3rd February, 2015. The Company has delisted its shares from M/s. Madras Stock Exchange(MSE) due to exit of MSE from Trading Business. Corporate Governance: As required by Clause 49 of the Listing Agreement, a separate section containing the Report on Corporate Governance together with the Certificate on the compliance with the conditions of Corporate Governance issued by the Auditors of the Company is appended hereto and they form part of this Annual Report. Secretarial Audit The Board of Directors have appointed M/s R. & A Associates, a firm of practicing Company Secretaries, Hyderabad as the Secretarial Auditor to conduct Secretarial Audit of the Company for the Financial year ended 31st March, 2015 in compliance with the provisions of Section 204 of the Companies Act , 2013. The report of the Secretarial Audit Report by M/s. R & A Associates, in Form MR-3 is enclosed as Annexure - II to this Report. Replies to the observations made by the Secretarial Audit report : Mr. K. Phaneendra Rao, was acting as Deputy General Manager (DGM) of the Company and keeping in view of his expertise and services rendered to the Company. , the board has designated Mr. K. Phaneendra Rao, as the Chief Financial Officer of the Company at their Meeting held on 14th August, 2014. Due to inadvertence, the company has not made the necessary filings, submissions with the Registrar Independent Directors 1. Sri Venkateswara Dontireddy Reddy, Chairman 2. Sri Indukuri Venkata Subba Raju, Member 3. Sri Y. Siddharth Reddy, Member The Report on Corporate Social Responsibility as per Rule 8 of (Corporate Social Responsibility Policy) Rules, 2014 is prepared and the same is given in the Corporate Governance Report. of Companies and the stock Exchanges and the company ensures to comply with the same in future The board is reforming the existing internal control systems of the Company in order to ensure foremost compliances of the applicable rules, laws and regulations Vigil Mechanism/Whistle Blower Policy : The Board of Directors of the Company has adopted Whistle Blower Policy. This policy is formulated to provide an opportunity to employees and an avenue to raise concerns and to access in good faith the Audit Committee, to the highest possible standards of ethical, moral and legal business conduct and its commitment to open communication, in case they observe unethical and improper practices or any other wrongful conduct in the Company, to provide necessary safeguards for protection of employees from reprisals or victimization and to prohibit managerial personnel from taking any adverse personnel action against those employees. Details of adequacy of internal financial controls The company has in place adequate internal financial controls with reference to financial statements. In addition, the Company has also appointed M/s. B.N & Company, Chartered Accountants as the Internal Auditors of the Company to conduct the regular Internal Audit and place its Report before the Audit Committee. During the year, such controls were tested and no reportable material weakness in the design or operation was observed. Change in the Nature of Business: There has been no change in the nature of business of the Company during the financial year under review, however the company has inserted Real Estate Business in the Main Objects with the members approval through Postal Ballot. The details of significant material orders passed by the regulators or courts or tribunals impacting the going concern status and Company's operations in future: No significant or material orders were passed by the regulators or courts or tribunals impacting the going concern status and company's operations in future during the year under review Change of Name of the Company: The Company has changed its Name from Country Club (India) Limited to Country Club Hospitality & Holidays Limited. The said change was approved in the 23rd Annual General Meeting of the Company held on 30th September, 2014 and the Registrar of Companies, Telangana & Andhra Pradesh has issued a fresh certificate of incorporation on 27th November, 2014 consequent to the change. Material changes and Commitments: There were no material changes and commitments in the business operations of the Company from the Financial Year ended 31st March, 2015 to the date of signing of the Director's Report. Risk Management Policy The Company has policy for identifying risk and established controls to effectively manage the risk. Further the company has laid down various steps to mitigate the identified risk. Mechanism for Board Evaluation: Clause 49 of the Listing Agreement states that the board shall monitor and review the board evaluation framework. The Companies Act, 2013 states that a formal annual evaluation needs to be made by the Board of its own performance and that of its committees and individual directors. Schedule IV of the Companies act, 2013 states that the performance evaluation of the independent directors shall be done by the entire Board of Directors, excluding the director being evaluated. The Directors evaluation was broadly based on the parameters such as understanding of the Company's vision and objective, skills, knowledge and experience, participation and attendance in Board/ Committee meetings; governance and contribution to strategy; interpersonal skills etc. The Board has carried out the annual performance evaluation of its own performance, the Directors individually as well as evaluation of the working of its Board Committees. A structures questionnaire was prepared covering various aspects of the Board's functioning such as adequacy of the composition of the Board and its Committees, Board Culture, execution and performance of specific duties, obligations and governance. A meeting of the Independent Directors was also held which reviewed the performance of Non-Independent Directors, Chairman and the quality, quantity and timelines of flow of information between the Company management and Board. Disclosure pertaining to sexual harassment of women at workplace: During the Financial year ended 31st March, 2015 the Company has neither received any complaints nor there are any pending complaints pertaining to sexual harassment. Subsidiary Companies: Pursuant to Section 129(3) of the Companies Act, 2013, a statement consisting salient features of financial statements of subsidiaries, associates and joint venture companies in Form AOC-1 is enclosed as Annexure - III. The Company has twenty two (22) subsidiary outfits as on 31st March, 2015: Domestic Subsidiaries: 1. Aquarian Realtors Private Limited 2. Bush Betta Holiday Ownership Wildlife Adventure Resort Private Limited 3. Bright Resorts Private Limited 4. Chanakyapuri Resorts Private Limited 5. Club Arzee Limited 6. International Country Holidays Private Limited 7. Jade Resorts Private Limited* 8. J J Arts & Entertainments Private Limited 9. Kolet Resort Club Private Limited 10. Maruti Waterpark and Entertainments Private Limited 11. Country Vacations International Limited, India 12. Swami Vivekanand Training and Education Centre Private Limited 13. Swimwel Investment and Trading Private Limited International Subsidiaries: 1. Country Club Babylon Resort Private Limited, Sri Lanka 2. Country Vacations International Limited, Dubai 3. Country Vacations International LLC, Dubai* 4. Country Vacations International LLC, Oman* 5. Country Vacations International LLC, Abu Dhabi* 6. Country Vacations International W.L.L, Bahrain* 7. Country Club and Vacations WLL, Qatar* 8. Country Vacations International SDN BHD, Malaysia* 9. Country Vacations International Limited, London* * Has become subsidiary of the Company under Section 2(87) of the Companies Act, 2013. The Ministry of Corporate Affairs (MCA) has through its General Circular No. th 2/2011 dated 08 February 2011, has granted general exemption to all the Companies from the requirement to attach various documents in respect of Subsidiary Companies, as set out in sub-section (1) of Section 212 of the Companies Act 1956. Accordingly Balance sheet, Statement of Profit and Loss and other documents of the Subsidiary Companies are not being attached with the balance sheet of the Company. Further your Company hereby undertakes that Annual Accounts of the Subsidiary Companies and the related detailed information shall be made available to the Shareholders of the Company and Subsidiary Companies seeking such information at any point of time. The Annual Accounts of the Subsidiary Companies shall also be kept open for inspection by the Shareholders at the Registered Office of the Company and of the Subsidiary Companies concerned. The Company shall furnish a hard copy of details of Accounts of Subsidiaries to any shareholder on demand. Personnel: The relationship between the management and the staff was very cordial throughout the year under review. Your Directors take this opportunity to record their appreciation for the cooperation and loyal services rendered by the employees. Deposits: The Company has not accepted any deposits, during the year under review. Particulars of Loans, Guarantees and Investments: There were no fresh loans, guarantees or investments made by the Company under Section 186 of the Companies Act, 2013 during the year under review. The details of the existing Guarantees given below: The Company has given the Corporate Guaranty to National Bank of Fujairah, Dubai, in respect of loan taken by M/s. Country Vacations International Ltd- Dubai. The Outstanding Balance as on 31.03.2015 is Rs.86,29,05,958/- Acknowledgments: Your Directors wish to place on record their appreciation for the support extended by government authorities, bankers, customers and shareholders of the Company. Your Directors also wish to place on record their appreciation for the sincere services rendered by the employees of your Company during the year. Their dedication, teamwork and efficiency have been commendable. For and on behalf of the Board of Directors For Country Club Hospitality & Holidays Limited Y. Varun Reddy Vice Chairman, JMD & COO DIN: 01905757 Y. Siddharth Reddy Vice-Chairman, JMD & CEO DIN: 00815456 Place : Hyderabad Date : 13 August, 2015 |