BOARD'S REPORT To, The Members, Vidli Restaurants Limited Your Directors are pleased to present the 9th Annual Report together with the Audited Financial Statement of the Company for the year ended 31st March, 2016. STATE OF THE COMPANY’S AFFAIRS During the year under review, your Company registered turnover of Rs. 3,86,03,844/- as compared to Rs. 2,44,56,416/- in the previous year i.e. increase of around 57.85% over the previous year. Further, the Company has earned profit before tax of Rs. 64,30,089/-as compared to Rs. 16,48,891/- in the previous year i.e. increase of around 289.96% over the previous year. The Company is operating in restaurant sector. The emphasis of restaurant is mainly on hygienically prepared fresh vegetarian food, quick service and value for money to the customers.Various training programs and tools to impart the knowledge necessary to operate restaurants with highest standards are developed and provided. One of our key program is Sadhak Chalak Malak, where we develop owners out of our own staff, by first training them to become managers. The restaurants operate in formats like dining and highway, Khao-Jao, Mall and food court. During the year under review, the Company has opened, under lease arrangement one outlet located at Kalyan. The Company has also granted the Franchise of the Trade Mark “VITHAL KAMATS” to 23 new outlets located in the states of Maharashtra, Gujarat and Madhya Pradesh. With these outlets, the total number of restaurants operated by the Company under franchisee has increased to 40 outlets. The total number of outlets as on 31st March, 2016 are 42. (There were 27 outlets as on 31st March, 2015) i.e. a growth of 55.56% in number of restaurant outlets as compared to last year. Further, Company has received several applications and is considering applications from 25 parties for granting franchise right, which are at different stages. The working of the Company’s restaurant business is encouraging. In view of insignificant contributions, 6 units of the Company were closed during the year 2015-16. During the year under review, there has been no change in the nature of the business of the Company. Further, there were no significant and material order passed by the regulators or courts or tribunals impacting the going concern status and Company’s operations in future. RISK MANAGEMENT AND INTERNAL CONTROL Your Company recognizes that risk is an integral part of business and is committed to managing the risks in a proactive and efficient manner. The Company at regular intervals monitors the financial, operational, legal risk to the Company through procedures like audit, inspections etc. There is no risk, which in the opinion of the Board may threaten the existence of the Company. The internal financial controls are adequate and are monitored at regular intervals. DIVIDEND The Company had paid Interim Dividend of Rs. 0.75/- per share (7.5%) to the members as on 28th December, 2015. Your Directors are pleased to recommended final dividend of Rs. 0.25 per share (2.5%) for the financial year ended on 31st March, 2016. The total dividend for the financial year 2015-16 will be Re. 1.00/- per share. CONVERSION OF THE COMPANY FROM PRIVATE LIMITED TO PUBLIC LIMITED The members of the Company at the extra-ordinary general meeting held on 7th October, 2015 passed a special resolution for conversion of the Company from private limited company to public limited company. Subsequently, the Registrar of Companies, Maharashtra, Mumbai issued a fresh certificate of incorporation dated 23rd November, 2015 certifying the conversion of Company into public limited company and that the name of the Company was changed from ‘Vidli Restaurants Private Limited’ to ‘Vidli Restaurants Limited’. SHIFTING OF REGISTERED OFFICE ADDRESS In order to meet the space requirement and keeping in view the expanded business operations, the registered office address of the Company was shifted from C-1502, RNA Azzure, Prajakta CHS, Kher Nagar, Bandra (East) Mumbai 400051 to Office No. 26, Building-1, Ajay Mittal Industrial Premises Limited, Marol, Andheri (East), Mumbai 400059 w.e.f 7th December, 2015. INITIAL PUBLIC OFFER The authorised share capital of the Company was increased on 7th October, 2015 from Rs. 4,00,00,000/- (Rupees Four Crores Only) to Rs. 5,00,00,000/- (Rupees Five Crores Only) to issue equity shares in the capital of the Company under Initial Public Offer (Issue) to meet the business needs of the Company. The Issue of the Company was closed on 5th February, 2016 which received an overwhelming response from retail as well as non-retail investors. The Issue was subscribed 6.82 times which was first in history. The Issue was over subscribed and the basis of allotment was finalized in consultation with the Bombay Stock Exchange Limited on February 10, 2016. The Company allotted fully paid up 13,10,000 equity shares of Rs. 10/- each at par on 11th February, 2016 to the eligible applicants. The Equity Shares of the Company were listed and admitted to dealings on the Small and Medium Enterprise Platform of Bombay Stock Exchange Limited with effect from 15th February, 2016. CHANGE IN CAPITAL STRUCTURE OF THE COMPANY Subsequent to the aforesaid corporate actions, the authorized share capital of the Company as on date is Rs. 5,00,00,000/- (Rupees Five Crores Only) divided into 50,00,000 Equity shares of Rs.10/- each and issued, subscribed and paid-up capital of the Company is Rs. 4,33,00,000/- (Rupees Four Crores and Thirty Three Lakhs Only) divided in to 43,30,000 Equity shares of Rs.10/- each. USE OF PROCEEDS The proceeds from the Issue of the Company vide prospectus dated 28th January, 2016 have been utilized / are in process of utilization for the purpose for which they were raised and there is no deviation in the utilization of proceeds. DEPOSITS There was no deposit accepted by the Company within the meaning of Section 73 and 76 of the Companies Act, 2013 and Rules made there under at the beginning of the year. The Company has not invited or accepted deposit during the year and there was no deposit which remained unpaid or unclaimed at the end of the year. SUBSIDIARY / JOINT VENTURES / ASSOCIATE COMPANIES As on 31st March, 2016, the Company did not have any subsidiaries / joint ventures companies. The Company has one associate company viz: Idlinow Eventure (India) Limited. As per Rule 8(1) of the Companies (Accounts) Rules, 2014 the report on the performance and financial position of the associate included in the consolidated financial statement is provided in Form AOC-1 annexed to the Financial Statement of the Company and not repeated here. DIRECTORS AND KEY MANAGERIAL PERSONNEL Mr. Arun Jain was appointed as an Additional Director by the Board of Directors pursuant to Section 161 of the Companies Act, 2013 to hold the office of Non-Executive Independent Director of the Company w.e.f 24th October, 2015 until the date of 9th Annual General Meeting. Mr. Arun Jain is proposed to be appointed as Non-Executive Independent Director at 9th annual general meeting. A brief profile of Mr. Arun Jain, Director of the Company is given in Annexure II to the Notice of 9th Annual General Meeting. Ms. Vidhi V. Kamat was re-designated as the Managing Director of the Company by the Board of Directors and the members of the Company for a period of five years w.e.f 7th October, 2015. As per Section 152(6) of the Companies Act, 2013, Ms. Vidhi V. Kamat retires by rotation and being eligible offers herself for re-appointment as the Managing Director of the Company. Further, Mr. Ramnath Pradeep was designated as the Chairman of the Company w.e.f 28th December, 2015. During the year, Ms. Payal Barai and Mr. Ravindra Shinde were appointed as the Company Secretary and Chief Financial Officer of the Company respectively w.e.f 28th December, 2015. Mr. Babu A. Devadiga and Mr. Gopalkrishna N. Shenoy ceased to be Directors of the Company with effect from 20th November, 2015 and 25th December, 2015 respectively. The Board of Directors placed on record its thanks for their association with the Company. COMPOSITION OF BOARD AND STATUTORY COMMITTEES FORMED THEREOF Board of Directors: Sr. No. Name Nature of Directorship 1 Mr. Ramnath Pradeep Chairman and Independent Director 2 Ms. Vidhi V. Kamat Managing Director 3 Mr. Vaibhav Rathi Independent Director 4 Mr. Arun Jain Independent Director VIDLI RESTAURANTS LIMITED Annual Report 2015-16 10 Audit Committee: Sr. No. Name Status in Committee 1 Mr. Ramnath Pradeep Chairman 2 Ms. Vidhi V. Kamat Member 3 Mr. Vaibhav Rathi Member 4 Mr. Arun Jain Member Nomination And Remuneration Committee: Sr. No. Name Status in Committee 1 Mr. Arun Jain Chairman 2 Mr. Vaibhav Rathi Member 3 Mr. Ramnath Pradeep Member Stake Holders Relationship Committee: Sr. No. Name Status in Committee 1 Mr. Arun Jain Chairman 2 Mr. Vaibhav Rathi Member 3 Ms. Vidhi V. Kamat Member NUMBER OF MEETINGS OF THE BOARD During the financial year 2015-16, 8 meetings of the Board of Directors were held. DECLARATION BY INDEPENDENT DIRECTOR Mr. Vaibhav Rathi, Mr. Arun Jain and Mr. Ramnath Pradeep, Independent Directors of the Company have given their respective declaration as required under Section 149(7) of the Companies Act, 2013 to the effect that they meet the criteria of independence as provided in Section 149(6) of the Companies Act, 2013 and that they abide by the provisions specified in Schedule IV to the Companies Act, 2013. The Board has, taken on record the declarations received from Mr. Vaibhav Rathi, Mr. Arun Jain and Mr. Ramnath Pradeep. EVALUATION The formal evaluation of Board as whole and Non-Independent Director of the Company and of the Independent Directors of the Company was done at the respective meetings of Independent Director and Board of Directors each held on 26th March, 2016. The criteria on which Independent Directors were evaluated was, inter alia, attendance and participation in Board Meetings / Committee Meetings / General Meetings, opinion, judgment, estimate provided on key agenda items, exercise of objective independent judgment on strategy, performance, risk management etc. in the best interest of Company, confirmation of adequacy of internal control on financial reporting, maintenance of confidentiality of information of the Company obtained in capacity of Independent Director, initiative to maintain integrity, ethics and professional conduct, initiative to check conflict of interest and maintenance of independence, adherence to the applicable code of conduct for independent directors, managing relationships with fellow Board members and senior management. The criteria on which Non-Independent Director of the Company were evaluated were inter alia, attendance and participation in Board Meetings / Committee Meetings / General Meetings, knowledge of sector where company operates, various directions provided in key decision making of the Company, understanding key risk for the Company and avoidance of risk while executing functional duties, successful negotiations / deals, smooth functioning of business / internal operation, initiative to maintain corporate culture and moral values, commitment, dedication of time, leadership quality, attitude, initiatives and responsibility undertaken, decision making, achievements. FAMILIARISATION PROGRAMMES FOR INDEPENDENT DIRECTORS The Company has conducted Familiarization Programme to acquaint the Independent Directors of the Company inter alia, about the nature of the industry in which the Company operates, business model of the Company, roles, rights, responsibilities of independent directors. NOMINATION AND REMUNERATION POLICY In terms of Section 178(3) of the Companies Act, 2013 and provisions of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, a policy on Director’s, Key Managerial Personnel and Senior Management Employee’s appointment and remuneration including criteria for determining their qualifications, positive attributes, independence and other prescribed matters was formulated and recommended by the Nomination and Remuneration Committee and adopted by the Board of Directors at their respective meetings held on 28th December, 2015. The said policy is annexed as Annexure ‘A’ to the Board’s Report. The said policy is also posted on the website of the Company www.kamatsrestaurants.com. Currently, no compensation is paid to the Non- Executive Directors of the Company except for the sitting fees as per provisions of Companies Act, 2013. COMMITTEE AND POLICY UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013 The Company has constituted Internal Complaints Committee under and as per the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. During the year under review, no instance of compliant or report under the said Act was registered in any of the units of the Company. VIGIL MECHANISM The Company has established a Vigil Mechanism for directors and employees to report genuine concerns. The vigil mechanism provide for adequate safeguards against victimization of person who use Vigil Mechanism and also provide for direct access to the Chairman of the Audit Committee. The details of Vigil Mechanism is displayed on the website of the Company www.kamatsrestaurants.com. PARTICIULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTY REFERRED TO IN SUB SECTION (1) OF SECTION 188 OF THE COMPANIES ACT, 2013 The particulars of Contract or Arrangement in Form AOC-2 as required under Section 134(3)(h) of the Companies Act, 2013 and Rule 8(2) of the Companies (Accounts) Rules, 2014) is annexed to this Board Report as Annexure ‘B’. The Company do not have any holding or subsidiary company hence disclosure under A of Schedule V of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 is not applicable. PARTICULARS OF EMPLOYEES There was no employee who was employed throughout the year or part thereof and in receipt of remuneration aggregating to Rs. 60,00,000/- p.a. or more or who was employed for part of the year and in receipt of remuneration aggregating to Rs.5,00,000/- p.m. or more. PARTICULARS AS PER RULE 5 OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014 The details related to employees and their remuneration as required under Section 197(12) and Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are mentioned in Annexure ‘C’ to this Board’s Report. Disclosure under Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is not applicable as no employee falls under the threshold provided therein. DIRECTORS’ RESPONSIBILITY STATEMENT As required by Section 134 (5) of the Companies Act, 2013, the Directors hereby confirm: 1. That in the preparation of the annual accounts, the applicable accounting standards have been followed and that there are no material departures. 2. That the selected accounting policies were applied consistently and the Directors 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 on 31st March, 2016 and of the profit of the Company for the financial year ended on that date. 3. That proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities to the best of the Directors' knowledge and ability. 4. That the annual accounts have been prepared on a going concern basis. 5. That Internal Financial Controls have been laid down and are followed by the Company and the said Internal Financial Controls are adequate and are operating effectively and; 6. That proper systems have been devised to ensure compliance with the provisions of all applicable laws and that such systems are adequate and are operating effectively. EXTRACT OF THE ANNUAL RETURN Extract of the Annual Return in Form MGT-9 as required under Section 134(3)(a) of the Companies Act, 2013 and Rule 12 of the Companies (Management and Administration) Rules, 2014 is annexed to this Board's Report as Annexure ‘D’. MANAGEMENT DISCUSSION AND ANALYSIS REPORT The Management Discussion and Analysis Report as required under Regulation 34(2)(e) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 is annexed as Annexure ‘E’of Board’s Report. STATUTORY AUDITOR M/s. VBG & Co, Chartered Accountants who were appointed as the Statutory Auditors of the Company, resigned from the office of statutory auditors as they do not fulfill the condition of peer review as per Regulation 33(1)(d) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. To fill the casual vacancy caused by resignation of the statutory auditor, the Board of Directors of the Company appointed M/s. P.D. Saraf & Co. Chartered Accountants, Mumbai as the Statutory Auditors of the Company for the Financial Year 2015-16 pursuant to Section 139(8) of the Companies Act, 2013. The approval of members for the said appointment is proposed in this meeting. M/s. P.D. Saraf & Co., Chartered Accountants, Mumbai holds the office until the conclusion of the 9th Annual General Meeting and being eligible offers themselves for appointment. The Company has received a certificate from the Auditors to the effect that their appointment, if made, would be in accordance with the provisions of Section 139 and 141 of the Companies Act, 2013. The Directors recommend their appointment as the Statutory Auditors for a period of five years from the conclusion of this Annual General Meeting on remuneration to be decided by the Board of Directors of the Company. Their appointment, if required, shall be ratified at every annual general meeting. SECRETARIAL AUDITOR M/s. Pooja Sawarkar and Associates, Practicing Company Secretaries, Mumbai was appointed as the Secretarial Auditor of the Company for Financial Year 2015-16. In terms of Section 204 (1) of the Companies Act, 2013, a Secretarial Audit Report is annexed as Annexure ‘F’ of Board’s Report. CORPORATE GOVERNANCE The Company being listed on the Small and Medium Enterprise platform is exempted from provisions of corporate governance as per Regulation 15 of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. Hence no corporate governance report is disclosed in this Annual Report. It is pertinent to mention that the Company follows majority of the provisions of the corporate governance voluntarily. CORPORATE SOCIAL RESPONSIBILITY The provisions of Section 135(1) and 135(5) of the Companies Act, 2013 regarding constitution of Corporate Social Responsibility (CSR) Committee and spending of atleast 2% of average net profit are not applicable to the Company. EMPLOYEE RELATIONS The relations of the management with staff and workers remained cordial during the entire year. ACKNOWLEDGEMENTS The Directors place on record their appreciation for the sincere and whole hearted co-operation extended by all concerned, particularly Company’s bankers, Bombay Stock Exchange Limited, the Government of Maharashtra, the Central Government, suppliers, clientele and the staff of the Company and look forward to their continued support. The Directors also thank the members for continuing their support and confidence in the Company and its management. On Behalf Of The Board Of Directors Vidli Restaurants Limited Ramnath Pradeep Chairman and Independent Director DIN: 02608230 Vidhi V. Kamat Managing Director DIN: 07038524 Place: Mumbai Date: 15th May, 2016 |