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Directors Report of Velan Hotels Ltd.
Mar 31, 2024
Your Directors are presenting their 34th Annual Report together with the Audited Accounts of the Company
for the year ended 31st March 2024.
FINANCIAL HIGHLIGHTS (Rs. in lakhs'')
|
PARTICULARS |
2023 - 24 |
2022 - 23 |
|
Profit / (Loss) Before Interest, Depreciation and Tax |
(555.80) |
(450.72) |
|
Add : Finance Cost |
0.06 |
0.65 |
|
Profit / (Loss) Before Depreciation & Tax |
(556.38) |
(457.24) |
|
Add : Depreciation |
53.63 |
219.78 |
|
Less : Exceptional Item |
â |
(1579.94) |
|
Profit / (Loss) Before Tax [PBT] |
(1092.66) |
(1845.44) |
|
Less : Tax Expenses |
â |
3.73 |
|
- Current Tax |
â |
â |
|
- Tax relating to prior years |
â |
â |
|
- Deferred Tax |
â |
â |
|
Profit / (Loss) After Tax |
(1092.66) |
(1849.17) |
|
Add : Revaluation Reserve |
6.79 |
6.79 |
|
Balance b/f from previous years |
(6261.05) |
(4418.67) |
|
Balance to be carried over to the Balance sheet |
(7346.92) |
(6261.05) |
OPERATIONAL REVIEW:
The Company suspended all the revenue-generating operations w.e.f. 24 March 2020 due to COVID-19 and has
not carried out any business activities during the year as well, resulting in, the entire year being completely
washed out.
During the year under consideration, the gross receipts of your company stood Rs.0.30 Lacs from Rs.2.30 Lacs
logged in the previous year. Profit / (Loss) before Interest, Depreciation and Taxation was Rs.(555.80) lacs
against Rs.(450.72) Lacs recorded in the previous year. Similarly, the Profit / (Loss) after Tax for the year ended
March 31,2024 stood at(Rs.1092.66) lacs as against Profit/Loss of(Rs.1849.17) registered in the previous year.
STATE OF THE COMPANYâS AFFAIRS
During the year under review, the Company did not make any progress as the operations at the Company were
halted since March, 2020.
You may be aware that towards the settlement of debts to RARE ARC, the Company sold / disposed of the
properties of Mall and part of multiplex to M/s.Avenue Supermarts Limited on 30th March, 2021. Out of sale
consideration of about Rs.35.00 crores, Rs.30.00 crores was utilized as an initial / upfront amount to settle a part
of outstanding debts to RARE ARC and the balance consideration was retained by M/s. Avenue Supermarts
Limited as a security deposit till the completion of due performance committed by the Company. Out of total
Security deposit of Rs.5,00,25,000/- held by them, Rs.3,39,60,000/- was returned to the Company and the
balance deposit of Rs.1,60,65,000 was adjusted for the difference between the measurement as per
supplementary deed and the actual measurement as per the Government records. As per the Supplementary
deed entered into with M/s. Avenue Supermarts Limited on the Sale of Mall and part of multiplex Properties, the
Company had fully met its obligations and the transaction was completed smoothly.
During the year under review, Rs.75 lakh was remitted to RARE ARC to settle a part of outstanding debts of the
Company.
DIVIDEND:
Given the accumulated losses, your directors have not recommended any dividend on Equity Shares for the
Financial Year2023-24.
SHARE CAPITAL:
During the year under review, your Company''s Authorized Share Capital is Rs. 50,00,00,000 comprising
5,00,00,000 Equity Shares of Rs. 10/- each. The Company''s paid-up capital is Rs.31,96,41,190 comprising of
3,19,64,119 Equity Shares of Rs. 10/-each fully paid up.
Further, the Company has not issued:
a. Any shares with differential rights as per provisions of Section 43 (a) (ii) of the Act read with Rule 4 (4) of
the Companies (Share Capital and Debenture) Rules, 2014.
b. Any sweat equity shares as per provisions of Section 54 (1) (d) of the Act read with Rule 8 (13) of the
Companies (Share Capital and Debenture) Rules, 2014.
c. Any equity shares under the Employees Stock Option Scheme as per provisions of Section 62(1)(b) of
the Act read with Rule 12(9) of the Companies (Share Capital and Debenture) Rules, 2014.
TRANSFEROFAMOUNTTO RESERVE:
Given the Loss incurred during the year and due to accumulated losses of earlier years, the Company has not
transferred anyamounttothe Reserves.
FIXED DEPOSITS:
During the year under review, the Company has not accepted or renewed any amount falling within the purview of
provisions of Section 73 of the Companies Act 2013 (âthe Actâ) read with the Companies (Acceptance of Deposit)
Rules, 2014. Hence, the requirement forfurnishing details relating to deposits covered underChapterV of the Act
or the details of deposits that are not in compliance with Chapter V of the Act is not applicable.
During the financial year under review, the Company borrowed the loans from Director(s) and the respective
directors gave a declaration in writing to the Company to the effect that the amount was not being given out of
funds acquired by them by borrowing or accepting loans or deposits from others as per requirement of proviso of
Rule 2(1)(c)(viii) of Companies (Acceptance of Deposits) Rules, 2014.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS:
During the under review, the Company has not given any loans or guarantees covered under the provisions of
Section 186 of the Companies Act, 2013 and has not made any investments. Hence, the details of loans and
advances that are required to be disclosed in the Annual Report under Regulation 34(3) read with Schedule V of
theSEBI Listing Regulations are notfurnished.
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:
The Company has an Internal Control System, commensurate with the size, scale and complexity of its
operations. The scope and authority of the Internal Audit function are defined in the Internal Audit Manual. To
maintain its objectivity and independence, the Internal Audit function reports to the Chairman of the Audit
Committee /the Managing Director.
The Internal Auditor monitors and evaluates the efficacy and adequacy of the internal control system in the
Company, and its compliance with operating systems, accounting procedures and policies at all locations of the
Company.
CORPORATE SOCIAL RESPONSIBILITY INITIATIVES:
Under Section 135 of the Companies Act, 2013, every company having a net worth of at least Rs 500 crore,
turnover of Rs 1,000 crore or more, or a minimum net profit of Rs.5 crores during the immediately preceding
financial year has to make CSR expenditure. Since the Company does not fall under the criteria as are referred
above, not applicable.
DIVIDEND DISTRIBUTION POLICY:
According to Regulation 43Aofthe SEBI (Listing Obligations and Disclosures) Regulations 2015 as amended,
only the top 1000 listed companies (based on the market capitalization of every financial year) shall formulate a
Dividend Distribution Policy, which shall be disclosed in theirannual reports and on their website as well.
Since your company does not fall under the top 1000 listed companies, no such report is provided in the Annual
Report.
BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT:
Regulation 34(2) of SEBI Listing Regulations, as amended, inter alia, provides that the Annual Report of the top
1000 listed entities based on market capitalization (calculated as on March 31 of every financial year), shall
include a Business Responsibility and Sustainability Report (BRSR) on the environmental, social and
governance disclosures.
Your Company, not being one of such top 1000 listed entities, has not included BRSR, as part of the Annual
Report.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND
OUTGO:
The Company has no foreign exchange earnings and outgo. The disclosures relating to the details of (i)
Conservation of Energy, (ii) Research & Development and Technology Absorption are to be made under sub¬
section (m) of Section 134 of the Companies Act 2013 read with Rule (8)(3) of the Companies (Accounts) Rules,
2014 is not furnished due to the closure of the Hotel Operations during the previous and current period under
review.
DIRECTORS AND KEY MANAGERIAL PERSONNEL:
a. Cessation / Retirement by rotation:
Mr. P.Ganesan, Chairman (DIN: 00049804) and Mr.S.P.Sivanandam (DIN: 01864334) were re-appointed as an
Independent, Non-Executive Directors at the 29th Annual General Meeting (âAGMâ) of the Company held on
September 27,2019 for second term of five (5) consecutive years upto26th September 2024. Both Directors have
resigned on 29/08/2024.
The Board of Directors placed on record their deep appreciation for the enormous contributions made by
Mr.P.Ganesan and Mr.S.P.Sivanandam during the directorship. The Company and the Board benefitted
immensely from the directors'' vast experience, knowledge and insights.
Due to personal commitment, Mr.Subramanyam Muralidharan (DIN:03552399) Independent-Non-Executive
Director has resigned from the Board on 06th November 2023.
Under the provisions of Section 152 of the Companies Act, 2013 read with Section 149 of the said Act, at least
2/3rd of the total number of Directors, excluding Independent Directors, shall be liable to retire by rotation and out
of the Directors liable to retire by rotation, at least 1/3rd of the Directors shall retire by rotation at every Annual
General Meeting.
In view of the above, Mr.M.R.Gautham and Mrs.M.Sasikala retiring by rotation and being eligible, offer
themselves for re-appointment, a resolution seeking shareholders'' approval for their re-appointment forms part of
the Notice.
b. Appointment/Re-appointment
Mr.Katpadi Muthukrishnan Ananthasayanam (DIN: 10720222) was appointed by the Board of Directors of the
Company at their meeting held on 29th August, 2024 as an Additional Director in the capacity of a Non-Executive-
Independent Director under the Articles of Association and Sections 149(6), 161 and Schedule IV to the
Companies Act, 2013 and Regulation 16(1)(b) and other applicable provisions of SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015.
Mr. Pachaimuthu Kumar (DIN: 10725510) was appointed by the Board of Directors of the Company at their
meeting held on 29th August, 2024 as an Additional Director in the capacity of a Non-Executive-Independent
Director under the Articles of Association and Sections 149(6), 161 and Schedule IV to the Companies Act, 2013
and Regulation 16(1)(b) and other applicable provisions of SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015.
Resolutions seeking shareholders''approval for their appointment forms part of the Notice.
c. Status of KMP:
During the year under review, Mr.E.V.Muthukumara Ramalingam, Managing Director, Mr.M.R.Gautham,
Executive Director, Mr.R.Lalitha, Chief Financial Officer and Mr.M.Srinivasan, Company Secretary are other
KMPs as per the provisions of the Act and were already in the office. NoneoftheKMPs resigned during the year.
d. Declaration by Independent Director:
Under the provisions of Section 149 of the Act, the Independent Directors have submitted declarations that each
of them meets the criteria of independence as provided in Section 149(6) of the Act along with Rules framed there¬
under and Regulation 16(1)(b) of SEBI Listing Regulations. There has been no change in the circumstances
affecting their status as Independent Directors of the Company. In terms of Regulation 25(8) of SEBI Listing
Regulations, they have confirmed that they are not aware of any circumstance or situation, which exists or may be
reasonably anticipated, that could impair or impact their ability to discharge their duties with an objective
independent judgment and without any external influence. The Board of Directors of the Company has taken on
record the declaration and confirmation submitted by the Independent Directors.
e. Disqualification of Directors:
None of the directors of the Company are disqualified under the provisions of Section 164 of the Companies Act,
2013 or debarred or disqualified from being appointed or continuing as directors of companies by the Securities
and Exchange Board of India or Ministry of Corporate Affairs or any such statutory authority. A certificate from a
Practicing Company Secretary in this regard is attached to this report.
f. Woman Director:
In terms of the provisions of Section 149 of the Companies Act, 2013 and Regulation 17 of SEBI (Listing
Obligations and Disclosure Requirements) Regulations, 2015, your Company has complied with the requirement
of having at least one Woman Director on the Board of Company. Mrs.M.Sasikala is a Non-Independent and
Women Directorof the Company.
COMPLIANCE WITH SECRETARIAL STANDARDS ON BOARD MEETINGS AND GENERAL MEETINGS
The Company has complied with the Secretarial Standard issued by the Institute of Company Secretaries of India
on Board Meetings and General Meetings.
COMPLIANCE WITH MINIMUM PUBLIC SHAREHOLDING (MPS) NORMS
Your Company was a non-compliant of Minimum Public Shareholding norms under Rule 19(2)(b) of the Securities
Contracts (Regulation) Rules, 1957, as amended, and Regulation 38 of Securities and Exchange Board of India
(Listing Obligations and Disclosure Requirements) Regulations, 2015.
During the year under review, in order to comply with MPS norms, Mr.E.V.Muthukumara Ramalingam, one of the
Promoter of the Company sold 16,44,791 equity shares of the Company representing 5.15% of the total issued
and paid-up equity share capital of the Company, on March 22, 2024 and March 26, 2024, undertaken in
accordance with the circular bearing reference number SEBI/HO/MRD/MRD-PoD-3/P/CIR/2023/10 dated
January 10, 2023 regarding the âComprehensive Framework on Offer for Sale (OFS) of Shares through Stock
Exchange Mechanismâ issued by the Securities and Exchange Board of India, through the separate designated
window of BSE Limited.
Post the sale of the shares, the shareholding of the Promoter and Promoter Group has reduced from 80.15% to
75.00% of the paid-up equity share capital of the Company and thus, the Company achieved of Minimum Public
Shareholding norms as mandated.
FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTORS
To familiarize new Independent Directors with the strategy, operations and functions of our Company, the
Company''s presentation, inter alia, on strategy, operations, service offerings, markets, organization structure,
finance, human resources and technology is given at the time of their induction and thereafter during the Board
meetings and/or committees thereof. The details of the familiarization program can be viewed at
https://www.velanhotels.com/pdf/Famil%20program%202024.pdf
CHANGE IN THE NATURE OF BUSINESS
There is no change in the nature of the business of the Company.
SIGNIFICANT AND MATERIAL ORDERS PASSED BYTHE REGULATORS OR COURTS
There are no significant and material orders passed by the Regulators / Courts / Tribunal which would impact the
going concern status of the Company except pending Appeal / Petitions / Application filed by the Company with
DRT, Coimbatore and Chennai and DRAT, Chennai.
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 Act and SEBI Listing Regulations.
The performance of the Board was evaluated by the Board after seeking inputs from all the Directors based on
criteria such as the board composition and structure; degree of fulfilment of key responsibilities towards
stakeholders; effectiveness of board processes, information and functioning, etc.; extent of co-ordination and
cohesiveness between the Board and its Committees; and quality of the relationship between board Members
and the management.
The performance of the Committees was evaluated by the Board after seeking inputs from the Committee
Members based on criteria such as the composition of committees, effectiveness of committee meetings, etc.
The above criteria are broadly based on the Guidance Note on Board Evaluation issued by the Securities and
Exchange Board of India (SEBI) on January 5,2017.
In a separate meeting of Independent Directors, the performance of Non-Independent Directors, the Board as a
whole and the Chairman of the Company was evaluated, taking into account the views of Executive Director and
Non-Executive Directors.
The Board and the Nomination and Remuneration Committee (NRC) reviewed the performance of individual
Directors based on criteria such as the contribution of the individual Directorto the Board and committee meetings
like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in
meetings, etc.
In the Board Meeting that followed the meeting of the Independent Directors and meeting of NRC, the
performance of the Board, its Committees, and individual Directors was also discussed. Performance evaluation
of Independent Directors was done by the entire Board, excluding the Independent Director being evaluated.
MEETINGS
During the year, seven Board Meetings and four Audit Committee Meetings were convened and held. The details
of which are given in the Corporate Governance Report. The intervening gap between the Meetings was within
the period prescribed underthe Companies Act, 2013, as amended.
DIRECTOR''S RESPONSIBILITY STATEMENT:
In terms of Section 134 (5) of the Companies Act, 2013, the Directors would like to state that:
i) In the preparation of the annual accounts, all the applicable Accounting Standards have been followed along
with proper explanation relating to material departures;
ii) The Directors have selected such accounting policies and applied them consistently and made judgments
and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the
Company at the end ofthefinancial year and of the loss of the Company for the year under review.
iii) The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in
accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and
detecting fraud and other irregularities.
iv) The Directors have prepared the annual accounts on ''a going concern'' basis.
v) The Directors had laid down internal financial controls to be followed by the Company and that such internal
financial controls were adequate and were operating effectively.
vi) The Directors had devised a proper system to ensure compliance with and that such a system was adequate
and operating effectively.
RELATED PARTY TRANSACTIONS:
i) Not all transactions with related parties are construed as related party transactions. Provisions regarding
Related Party Transaction are encapsulated under 188 of the Companies Act, 2013 (âthe Actâ) read with rule
15 of the Companies (Meetings of Board and its Powers) Rules, 2014. All related party transactions that were
entered into during the financial year were on an arm''s length basis and were in the ordinary course of
business.
ii) Further, in the financial year 2023-24, in the scope of Section 188(1) of the Act, there were no material
transactions with any of its related parties. Therefore, the disclosure of Related Party Transactions as
required under Section 134(3(h) of the Act in Form AOC-2 does not apply to the Company for the financial
year 2023-24 and hence the same is not provided.
iii) Under the provisions of Regulation 2(1)(zc) and 23 of SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015, the Company has entered the transactions with related parties, i.e the
aggregate value of material transactions exceeded 10% of the annual consolidated turnover of the Company,
as perthe lastaudited financial statements of the Company, the details of which reported here-under:
fRs. in lakhs'')
|
Name of the |
Relationship |
Nature of |
Opening Balance 01-04-23 |
Received |
Repaid |
Closing Balance 31-03-24 |
|
Mr. E.V. Muthukumara |
Managing |
Transfer of Resources |
1026.67 |
_ |
_ |
1026.67 |
|
Ramalingam |
Director |
(Availed / Repayment of Loan) |
||||
|
Mr.M.R.Gautham |
Executive |
Transfer of Resources |
||||
|
Director |
(Availed / Repayment of Loan) |
389.62 |
46.23 |
(167.66) |
268.19 |
Except for the above transactions, there were no materially significant related party transactions made by the
Company with the Promoters, Directors, Key Managerial Personnel, orother designated persons which may
have a potential conflict with the interest of the Company at large.
iv) In line with the requirements of the Companies Act, 2013 and Regulation 23 of SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015, your Company has formulated a Policy on Related Party
Transactions which is also available on the following web-link at https://www.velanhotels.com/pdf/Related-
Party-Transactions-Policy%20-%20Velan%20Hotels%20Ltd.pdf
The Policy intends to ensure that proper reporting; approval and disclosure processes are in place for all
transactions, if any between the Company and Related Parties.
v) All proposal related party transactions were placed before the Audit Committee for their prior approval in line
with the requirements of the Companies Act, 2013 and Regulation 23 of SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015.
MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY
WHICH HAVE OCCURRED BETWEEN MARCH 31,2024 AND AUGUST 29,2024 (DATE OF THE REPORT)
No material changes and commitments were affecting the financial position of the Company between the end of
the financial year and the date of this Annual Report except the information stated in the State of the Company''s
affairs. There has been no change in the nature of business of the Company as of the date of this Annual Report.
REPORT ON PERFORMANCE OF SUBSIDIARIES, ASSOCIATIONS AND JOINT VENTURE COMPANIES:
During the year under review, the Company had no Subsidiary (ies), Associate(s) and Joint Venture(s). Hence the
said clause is not applicable.
REMUNERATION/COMMISSION DRAWN FROM HOLDING/SUBSIDIARYCOMPANY:
During the year under review, neither the Company is a subsidiary of any Company or body corporate nor the
Company have a subsidiary. Hence the said clause is not applicable.
DISCLOSURE OF LOANS AND ADVANCES IN NATURE OF LOANS TO SUBSIDIARIES AND ASSOCIATES
OF THE COMPANY:
During the year under review, the Company has noSubsidiary(ies)andAssociate(s). Hence, the said clause is not
applicable
CODE OF CONDUCT
The Board of Directors has approved a Code of Conduct which applies to the Members of the Board and senior
management in terms of Regulation 17 and Schedule V of Regulation 34(3) of the Listing Regulations. The full text
of the Code is displayed on Company''s website:
https://www.velanhotels.com/pdf/CODE/Code%20of%20Conduct%20for%20Board%20of%20Directors%20in
cluding%20KMP%20&%20SMP.pdf
The Code lays down the standard procedure of business conduct which is expected to be followed by the
Directors and the designated employees in their business dealings and in particular on matters relating to integrity
in the workplace, in business practices and in dealing with stakeholders.
All the Board Members and the Senior Management personnel have confirmed compliance with the Code. In
compliance with Schedule V of Regulation 34(3) of the Listing Regulations a declaration signed by the Managing
Director is attached and forms part of the Annual Report of the Company.
VIGIL MECHANISM / WHISTLE BLOWER POLICY
Under the applicable provisions of the Companies Act, 2013, SEBI-LODR Regulations and Regulation 9A(6)
SEBI (PIT) Regulations, 2015 as amended, the Company has a vigil mechanism named "Vigil Mechanism /
Whistle Blower Policy" to deal with instances of fraud and mismanagement, if any. The VM/WB Policy ensures
that strict confidentiality is maintained whilst dealing with concerns and that no discrimination will be met out to any
person fora genuinely raised concern.
The Company has revised the said Whistle-Blower policy to insert "reporting of incidents of a leak or suspected
leak of Unpublished Price Sensitive Information (UPSI)" in terms of SEBI (Prohibition of Insider Trading)
Regulations, 2015, as amended from time to time. The said policy is available on the Company''s website at
https://www.velan hotels.com/pdf/Velan%20%20Vigil_ Mechanism_Whistle-blowerPolicy.pdf
CODE OF CONDUCT FOR PREVENTION OF INSIDER TRADING
Code of Conduct to regulate, monitor and report trading by Insiders ("the Code") under the SEBI (Prohibition of
Insider Trading) Regulations, 2015 (The PIT Regulations) can be viewed at https ://www .velanhotels .com/pdf/
Velan%20Hotels%20-Code-of-Conduct-for-prevention-of-lnsider-Trading.pdf
The Code applies to Promoters, Members of Promoter''s Group, all Directors and such Designated Employees
who are expected to have access to unpublished price sensitive information relating to the Company. The
Company Secretary is the Compliance Officerfor monitoring adherence to the PIT Regulations.
The Company has also formulated ''The Code of Practices and Procedures for Fair Disclosure of Unpublished
Price Sensitive Information (UPSI)'' in compliance with the PIT Regulations. The Company has also formulated
policies for the procedure of inquiry in case of leak of Unpublished Price Sensitive Information in case of leak of
UPSI and Policy for Determination of Legitimate Purposes as well, as a part of the Code of Practices and
Procedures for Fair Disclosure. This Code is displayed on the Company''s website viz.
https://www.velanhotels.com/pdf/Velan%20-Code%20of%20Conduct%20&%20Procedure%20of%
20Fair%20Diclosure.pdf
All Board Directors and the designated employees have confirmed compliance with the Code.
UNPAID DIVIDEND & IEPF:
For the financial year 2023-2024, the Company was not liable to transfer any unpaid / unclaimed dividend and/or
the shares to the Investor Education & Protection Fund (IEPF)
The Shareholders are entitled to claim their shares including all the corporate benefits accruing on such shares, if
any, from the IEPF Authority by submitting an online application in Form IEPF-5and sending a physical copy of the
Form IEPF-5 duly signed by all the joint shareholders, if any, along with requisite documents enumerated in the
Form IEPF-5, to the Company''s RTA. The Rules and Form IEPF-5, as prescribed, for claiming back the shares,
are available on the website of the IEPF www.iepf.gov.in. It may please be noted that no claim shall lie against the
Company in respect of share(s) transferred to IEPF according to the said Rules.
EXPLANATION OR COMMENTS ON QUALIFICATION, RESERVATIONS OR ADVERSE REMARKS OR
DISCLOSURES MADE BYTHE AUDITORAND COMPANYSECRETARY IN PRACTICE :
A. Response to Qualifications / reservations / adverse remarks / observations on Audit Report:
|
SI. No. |
Qualification, Reservation |
Board''s explanation |
|
1. |
Ability of the Company |
The Company, per One-Time Settlement (OTS) offer with M/s.RARE The Promoters-Directors have willingness to infuse the required funds In view of all the actions that are currently underway, the financial |
|
SI. No. |
Qualification, Reservation |
Board''s explanation |
|
2. |
Confirmation of balance |
With final approval of OTS offer provided by the RARE ARC and |
|
3 |
Impairment of Assets: |
The company had suspended all the revenue generating operations |
|
4 |
Delays in remittance of |
The Company is mobilizing necessary resources to meet the pending |
|
5 |
Gratuity and Earned |
The Auditors have also made comment on not following the Accounting |
|
All the eligible / permanent employees of the Company except KMPs |
B. Response to comments on Secretarial Audit Report:
|
SI. No. |
Qualification, Reservation |
Board''s explanation |
|
1 |
Late filing of Shareholding |
CDSL/NSDL suspended in providing Benpos data to the Company due |
DETAILS OF REVISION OF FINANCIAL STATEMENT ORTHE REPORT
Your Company has not revised its financial statement or the Report in respect of any of the three preceding
financial years either voluntarily or according to the order of judicial authority.
AUDITORS & SECRETARIAL AUDITOR
> Statutory Auditors and Auditors'' Report
At the 32nd AGM held on September 24,2022, the Members approved the re-appointment of M/s.Krishaan &
Co, Chartered Accountants (Firm Registration No. FRN 001453S) as the Statutory Auditors of the Company
to hold office for a second term of five consecutive years from the conclusion of the 32nd AGM till the
conclusion of the 37th AGM of the Company to audit and examine the books of account of the Company.
The Statutory Auditors confirmed to the effect that they are eligible to continue with their appointment and that
they have not been disqualified in any mannerfrom continuing as Statutory Auditors.
During the period under review, there are audit qualifications or adverse remarks in the Auditors'' Report.
Management response against each of the qualification, reservation or adverse remark or observation made
in the Auditors'' Report has been furnished elsewhere in the Directors'' Report.
> Internal Auditors
The Internal Auditor has been conducting half-yearly 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 and Secretarial Auditor''s Report
The Board has re-appointed Mr.S.Ganesh Viswanathan, Company Secretary in Practice to conduct the
Secretarial Audit of the Company under the provisions of Section 204 of the Companies Act, 2013, the
Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and the SEBI (LODR)
Regulations, 2015, as amended. The Report of Secretarial Auditor is appended to this Report as "Annexure
A" which contains qualifications / reservations /adverse remarks / observations.
> Cost Auditor and Cost Records
According to the provisions of Section 148 of the Companies Act, 2013 read with the Companies (Cost
records and Audit) Rules, 2014 as amended from time to time, the Company is not required to maintain Cost
Records underthesaid rules.
> Reporting of Frauds by Auditors
During the year under review, the Statutory Auditors or Secretarial Auditor of the Company have not reported
any frauds to the Audit Committee or the Board of Directors under Section 143(12) of the Act, including rules
made thereunder.
CREDIT RATING
During the year under review, the Company has not issued any debt instruments or any fixed deposit program or
any scheme or proposal, obtaining credit ratings does not apply to the Company.
LISTING REQUIREMENTS:
Your Company''s Equity shares are listed on BSE Limited. The Listing fees have been paid to this Stock Exchange
forthe financial year2024-2025. Both depositories were paid Annual Custody Fees forthe financial year2024-25.
DETAILS OF PENDING PROCEEDINGS UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016
(31OF2016) DURING THE YEAR ALONG-WITH THEIRSTATUSAS THE END OF THE FINANCIAL YEAR:
During the year under review, there were no proceedings that were filed by the Company or against the Company,
which are pending under the Insolvency and Bankruptcy Code, 2016 as amended, before National Company Law
Tribunal or other Courts.
THE DETAILS OF THE DIFFERENCE BETWEEN THE AMOUNT OF VALUATION DONE AT THE TIME OF
ONE-TIME SETTLEMENT AND THE VALUATION DONE WHILE TAKING LOAN FROM THE BANK OR
FINANCIAL INSTITUTIONS ALONG WITH THE REASON THEREOF:
During the year under review, there were no instances of one-time settlement with any Banks or Financial
Institutions orARCs.
AUDIT COMMITTEE
During the year under review, the Audit Committee consisted of the Directors namely Mr.P. Ganesan, Mrs. M.
Sasikala, Mr.S.P. Sivanandam and Mr.Nagaraj Saveethkumar. Mr.Nagaraj Saveethkumar is the Chairman of the
Committee. The Company Secretary acts as the Secretary to the Committee.
There is no such incidence where the Board has not accepted the recommendation of the Audit Committee during
the year under review.
NOMINATION AND REMUNERATION COMMITTEE
The Board has, under the provisions of sub-section (3) of Section 178 of the Companies Act, 2013, formulated the
policy setting out the criteria for determining qualifications, positive attributes, independence of a Director and
policy relating to remuneration for Directors, Key Managerial Personnel and other employees. The composition of
members and a detailed function of the same are reported elsewhere in the Annual Report.
The Company''s policy on directors'' appointment and remuneration and other matters provided in Section 178(3)
of the Act is available at https://www.velanhotels.com/pdf/Velan%20Hotels-%20Remuneration%20Policy-on-
Selection-and-Appointment-of-Directors-and-their-Remuneration-2.pdf. The composition of members and a
detailed function of the same are reported elsewhere in the Annual Report.
STAKEHOLDERS'' RELATIONSHIP COMMITTEE
The Board has under the Section 178(5) of the Companies Act, 2013 constituted a Stakeholder Relationship
Committee to resolve the grievances of the Stakeholders of the Company. The composition of members and a
detailed function of the same are reported elsewhere in the Annual Report.
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION,
PROHIBITION AND REDRESSAL) ACT, 2013
The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal)Act, 2013 mandates all
the workplaces to constitute an Internal Complaints Committee (ICC) for receiving complaints of sexual
harassment of women in all Ministries/Departments of Union as well as State Governments and in the private
sector too.
The Company has shut all the operations since March 2020 and all the employees have resigned during March
2020. The Company has engaged a few causal staffs, below in 10 numbers, on a temporary basis to carry out the
statutory obligation and safeguard the assets of the Company. There were no female staffs employed in the
company, either on regular or contractual basis.
As the Company has no employees in the Companyâs payroll, the Company is not required to constitute Internal
Complaints Committee (ICC) as per the requirement of the prevention of sexual harassment Act. Further, the
Company management also has not received any complaints regarding sexual harassment during the year under
review.
SECRETARIAL STANDARD
The Company complies with all applicable Secretarial Standards issued by The Institute of Company Secretaries
of India and approved by the Central Government under Section 118(10) of the Companies Act, 2013 for the
financial year ended 31st March 2024.
EXTRACT OF ANNUAL RETURN
As provided under Section 92(3)and 134(3)(a)oftheActread with Rule 12ofChapterVII Rules of the Companies
(Management and Administration) Amendment Rules, 2020, the draft Annual Return in Form MGT-7 for the
financial year ended March 31,2024 is made available on the website of the Company and can be accessed at:
www.velanhotels.com underthe Head ''Annual Returns'' in the Investor page.
BUSINESS RISK MANAGEMENT
According to Section 134 (3) (n) of the Companies Act, 2013, the Board is responsible for ensuring that risks, and
also opportunities, are identified on a timely basis and that the Company''s objectives and activities are aligned
with the risks and opportunities identified by the Board. The full Board of the Company formally reviews such risks
at least annually. All proposals reviewed by the Board include a consideration of the issues and risks of the
proposal. The Board adopts practices designed to identify significant areas of business risk and to effectively
manage those risks per the Company''s risk profile. Risk Management is an integral part of the Company''s
business process. In your Company, risks are carefully mapped and a risk management framework is involved.
The salient features of the Risk Management Policy along with the major gist and changes therein are available on
Company''s website and can be accessed at the link provided herein below: https :// www. velanhotels. com/pdf/
POLICIES/Policy%20for%20Risk%20Managment.pdf
RISK MANAGEMENT COMMITTEE:
According to the Regulation 21 of SEBI Listing Regulations, the provisions of this regulation shall be applicable to
the top 1000 listed entities as per SEBI (Listing Obligations and Disclosure Requirements), determined based on
Market capitalization, as at the end of the immediate previous financial year.
As the Company does not fall under the top 1000 listed entities, the Risk Management Committee has not been
established.
PARTICULARS OF EMPLOYEES AND DETAILS ABOUT REMUNERATION AND OTHER DETAILS AS
REQUIRED UNDER SECTION 197(12) OF THE ACT READ WITH RULE 5 OF THE COMPANIES
(APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014
A. The information 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 in respect of employees
of theCompany as follows :
I) The ratio of the remuneration of each Director to the median remuneration of the employees of
the Company for the financial year 2023-24:
As the Company has not resumed commercial operations yet, none of the Directors was paid any
remuneration.
ii) The percentage increase in remuneration of each Director, Chief Financial Officer, Chief
Executive Officer, Company Secretary or Manager in the financial year:
None of the Directors was paid any remuneration. There was no increase in remuneration of the CFO
and Company Secretary during the financial year.
iii) The percentage increase in the median remuneration of employees in the financial year:
As there were no permanent employees during the period under review, not applicable.
iv) The number of permanent employees in the roles of the Company:
As of 31st March, 2024, there were no eligible / permanent employees in the Company''s payroll except
Managing Director, Executive Director, Company Secretary and Chief Financial Officer.
v) Average percentile increase already made in the salaries of employees other than the
managerial personnel in the past financial year and its comparison with the percentile increase
in the managerial remuneration and justification thereof and point out if there are any
exceptional circumstances for increase in the managerial remuneration:
Not applicable.
vi) It is affirmed that the Remuneration is as per the Remuneration policy for Directors, Key
Managerial Personnel and other employees adopted by theCompany.
B. During the year under review, there are no employees drawing remuneration of more than Rs.102 lacs per
annum or drawing remuneration of Rs.8.50 lacs per month if employed for part of the year. Hence, the
statement required under Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of
Managerial Personnel) Rules 2014 is not appended to the report.
CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION & ANALYSIS REPORTS
The Corporate Governance and Management Discussion & Analysis Report, which form an integral part of this
Report, are available elsewhere in this report together with the Certificate from the Company Secretary in Practice
regarding compliance with the requirements of Corporate Governance as stipulated under various regulations of
the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
CAUTIONARY STATEMENT
Risks, uncertainties or future actions could differ materially from those expressed in the Directors'' Report and the
Management Discussion and Analysis Report. These statements are relevant on the date of this Report. We have
no obligation to update or revise any statements, whether as a result of new information, future developments or
otherwise. Therefore, undue reliance should not be placed on these statements.
APPRECIATION
Your Company and its Directors wish to extend their sincere thanks to Bankers, M/s.RARE Asset Reconstruction
Ltd, Central /State Governments, Local Bodies, Customers and employees at all levels of their continuous co¬
operation and assistance.
For and on behalf of the Board
E. V. Muthukumara Ramalingam
Managing Director
(DIN : 00046166)
M. R. Gautham
Place : TIRUPUR Executive Director
Date :29.08.2024 (DIN:00046187)
Mar 31, 2015
DEAR MEMBERS,
The Directors have pleasure in presenting their 25th Annual Report
together with the Audited Accounts of the Company for the year ended
31st March, 2015.
FINANCIAL HIGHLIGHTS (Rs. in lakhs)
PARTICULARS 2014-15 2013-14
Profit before Interest and Depreciation and Tax 238.09 403.72
Less: Interest 1438.70 224.70
Profit/Loss Before Depreciation & Tax (1200.61) 179.02
Less : Depreciation 220.75 118.47
Add : Exceptional Item 6.74 6.99
Profit/Loss Before Tax [PBT] (1414.62) 67.55
Less : Tax Expenses
a. Current Tax -- 12.75
b. Mat Entitlement -- (12.75)
c. Deferred Tax 23.33 3.69
Profit / Loss After Tax (1391.30) 63.86
Balance b/f from previous years 374.98 311.12
Balance to be carried over to Balance sheet (1016.32) 374.98
OPERATIONAL REVIEW:
During the year under review, your Company's hotels operations and
finances were severely affected. The primary drivers of loss are
borrowing cost for various components of the stalled projects and no
income generated from them. Gross revenues decreased to Rs.1493.31 Lacs
against Rs. 1575.43 Lacs in the previous year. Profit Before Interest,
Depreciation and Taxation was Rs. 238.09 lacs against Rs. 403.72 Lacs
in the previous year. After providing for Interest, Depreciation and
Taxation of Rs.1438.70 Lacs & Rs. 220.75 Lacs respectively, the Net
Loss of the Company for the year under review was placed at Rs.1391.30
Lacs as against Net Profit of Rs.63.86 Lacs in the previous year.
According to Accounting Standard 16, a Company should suspend
capitalization of borrowing costs during extended periods in which it
suspends active development of a qualifying asset i.e. project assets
and such costs are costs of holding partially completed assets and do
not qualify for capitalization. In view of the above, the entire
borrowing cost incurred for all the components of the projects, which
are stalled owing to paucity of funds, has been treated as expense and
debited in the profit and loss account.
During the year under review, the pending receivables such as lease
rentals, electricity charges, air conditioning charges and other
operation charges from the tenants of the Shopping Mall have now been
written-off.
STATE OF THE COMPANY'S AFFAIRS
The members are aware that the Company is implementing diversification
cum expansions projects in a phased manner namely Shopping Mall,
Multiplex Theater, 2.7 MW Bio-mass based co-gen power generation plant,
Biomass Plantation, Convention Center and additions & renovation of
existing hotels properties for which the Company was initially
sanctioned credit facilities by both Allahabad Bank, Tirupur and Andhra
Bank, Coimbatore. The Company subsequently was not extended timely
support by the Banks, both in terms of additional debt funding required
as well as alteration in the terms of the existing loans.
The original project cost for the entire development was Rs.124.42
crore for the above components. During the course of construction and
subsequent discussions with the technical consulting agencies, it was
realized that the project required substantial up-gradation thereby
increasing the scope of overall project accordingly. This has
necessitated significant and substantial addition of buildings and
equipments for the project. All these have resulted in a thorough
revision of the components of the project (including component of Bio
Mass cultivation) resulting in a total project cost of Rs. 204.15 Crore
(Rs.162.06 Crore in July 2012) in place of Rs.124.42 Crore as
originally envisaged. Hence, the company was in need of further funding
in respect of revision in the components of the project and slowed in
the construction of the Projects due to change in scope of work
primarily for the Renewable Energy Power Plant and the Hyper-mart and
Multiplex.
* The shopping mall was formally launched in December, 2013. The most
of occupants at the Mall either downed their shutters temporarily or
withdrawn from their agreements entirely due to delays in the
completion of the Multiplex and the Food Court. As a result, the
occupants of the Mall declined to make payments their rentals,
electricity charges and other operational charges.
* The construction of the Renewable Energy Power Plant has been
completed. All the major equipments including the Gasifiers and Gensets
have been installed. The balance works include the plant integration
and automation. Due to the use of superior technology, this Renewable
Energy Power Plant will have an effective output of 4.1 MW in Co-Gen.
* The Hyper-mart / Multiplex has been partially constructed. There have
been significant changes in scope of work for this building. These
changes are required to achieve a better construction quality and
durability.
Owing to some changes in scope of work for the Renewable Energy Power
Plant and the Hyper-mart and Multiplex primarily due to technical
up-gradation, the Company approached the existing bankers for an
additional financial assistance. Even though, the company was
sanctioned the additional loan facility, there has been unexplained
delay in the disbursement of loan and hence the cost of project
escalated further. Moreover, apart from the delay, the major portion of
amount of additional term loan was said to have been adjusted towards
the dues of the Company. This has resulted in the deferring of
completion and commissioning of these projects further.
The Company has provided a letter to the existing bankers during March,
2014 summarizing the situation and requesting to restructure its
accounts as per certain guidelines issued by Reserve Bank of India for
formation of Joint Lender Forum (JLF) for considering Corporate Debt
Restructuring (CDR). The Company has made representation to the
existing bankers on this aspect to invoke the said provision and
undertake the restructuring of the debts to enable the interests of the
banks and of the company for the project to be safeguarded. Despite,
the restructure plan being very reasonable, there was no proper
response but, however, there was an attempt to recall the entire loan
in lump sum by treating the Company's account as one which became NPA
(Non Performing Asset) and to recall the entire account from the
existing banks invoking the Securitization Act under Section 13(2).
Your Company had received Notice under Section 13(2) of the
Securitization and Reconstruction of Financial Assets and Enforcement of
Security Interest Act, 2002 ("SARFAESI ACT") issued jointly by Allahabad
Bank and Andhra Bank calling upon your Company to discharge the alleged
outstanding liability together with interest and all other incidental
expenses, to the Lender Banks within 60 (Sixty) days from the date of
the Notice, failing which the Banks would exercise its rights under
Section 13(4) of the SARFAESI Act with respect to the secured assets of
the Company. The Guarantors for the above terms loans were also served
the same notice. The Company's immovable properties are subject to
matter of Notice of Possession issued by Banks then. Your Company has
challenged the legality and validity of these notices and filed the stay
petition before the Debt Recovery Tribunal ("DRT") at Coimbatore. The
Company is in consultation with its legal advisers to take other steps
as may be advised by the legal advisors to protect your Company's
interests in these proceedings.
DIVIDEND:
In view of operating losses incurred during the year, your Directors do
not recommend payment of any dividend. SHARE CAPITAL:
The paid up equity capital as on March 31, 2015 was Rs.3196.41 Lakhs.
During the year under review, the company has not issued shares with
differential voting rights nor granted stock options nor sweat equity.
TRANSFER OF AMOUNT TO RESERVE
As the company reported Loss after tax, the company does not propose to
transfer any amount to reserves.
FIXED DEPOSITS
Your Company has not accepted any deposits within the meaning of
Section 73 of the Companies Act, 2013 and the Companies (Acceptance of
Deposits) Rules, 2014.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS
The Company has not given any loans or guarantees covered under the
provisions of Section 186 of the Companies Act, 2013. During the year
under review, the Company has not made any investments as well.
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Company has an Internal Control System, commensurate with the size,
scale and complexity of its operations. The scope and authority of the
Internal Audit function is defined in the Internal Audit Manual. To
maintain its objectivity and independence, the Internal Audit function
reports to the Chairman of the Audit Committee of the Board & to the
Managing Director.
The Internal Auditor monitors and evaluates the efficacy and adequacy
of internal control system in the Company, its compliance with
operating systems, accounting procedures and policies at all locations
of the Company. Based on the report of internal audit function,
corrective action is taken in their respective areas and thereby
strengthen the controls. Significant audit observations and
recommendations along with corrective actions thereon are presented to
the Audit Committee of the Board.
CORPORATE SOCIAL RESPONSIBILITY INITIATIVES
Since the Company does not come under "Corporate Social Responsibility"
(CSR), applicability of the Annual Report on CSR activities is not
annexed.
CONSERVATION OF ENERGY
a) The operations of the Company are not energy intensive. However, the
Company ensures that all the operations are conducted in the manner
whereby optimum utilisation and maximum possible savings of energy is
achieved.
b) No specific investment has been made in reduction in energy
consumption.
c) As the impact of measures taken for conservation and optimum
utilisation of energy are not quantitative, its impact on cost cannot
be stated accurately.
d) Since the Company does not fall under the list of industries, which
should furnish this information in Form A annexed to the aforesaid
Rules, the question of furnishing the same does not arise.
TECHNOLOGY ABSORPTION
The Company has no technical collaboration arrangement with any
organization. The Company continues to absorb and upgrade modern
technologies and advanced hotel management techniques in various guest
contact areas, which includes wireless internet connectivity in the
hotel.
FOREIGN EXCHANGE EARNINGS AND OUT-GO (Rs jn |akhs)
Foreign Exchange Earnings And Outgo Current Year Year
2014-15 2013-14
1. Earnings 373.01 328.53
2. Expenditure in Foreign Currency Nil Nil
INDUSTRIAL RELATIONS
During the year under review, your Company enjoys cordial relationship
with workers and employees at all levels. DIRECTORS AND KEY MANAGERIAL
PERSONNEL
Whole-Time Directors Sri. M. R. Gautham and Sri. B. A. Madhusudhan
retire by rotation and, being eligible, offer themselves for re
appointment. The Directors recommend Sri. M. R. Gautham and Sri. B. A.
Madhusudhan for re-appointment. If they are re-appointed as a director,
immediately on retirement by rotation, they shall continue to hold
office of Whole-time Directors and such re-appointment as director
shall not be deemed to constitute break in their appointment as a
Whole-time Director.
During the year under review, Smt. R. Lalitha, AGM - Finance & Accounts
was promoted / appointed as Chief Financial Officer of the Company. In
addition, Sri. E. V. Muthukumara Ramalingam, Managing Director, Sri. M.
R. Gautham, Executive Director, Sri. B. A. Madhusudhan, Whole-time
Director and Sri. M. Srinivasan, Company Secretary, are other KMPs as
per the provisions of the Act and were already in office before the
commencement of the Act. None of the KMPs resigned during the year.
All independent directors have given declarations that they meet the
criteria of independence as laid down under section 149(6) of the
Companies Act, 2013 and clause 49 of the Listing Agreement.
CHANGE IN THE NATURE OF BUSINESS
There is no change in the nature of business of the Company.
BOARD EVALUATION
Pursuant to the provisions of the Act and Clause 49 of the Listing
Agreement, evaluation of every Director's performance was done by
Nomination and Remuneration Committee. The performance evaluation of
Non-Independent Directors and the Board as a whole, Committees thereof
and Managing Director of the Company was carried out by the Independent
Directors. Evaluation of Independent Directors was carried out by
the entire Board of Directors excluding the Director being evaluated. A
structured questionnaire was prepared after circulating the draft
forms, covering various aspects of the evaluation such as adequacy of
the size and composition of the Board and Committee thereof with regard
to skill, experience, independence, diversity; attendance and adequacy
of time given by the Directors to discharge their duties; Corporate
Governance practices etc. The Directors expressed their satisfaction
with the evaluation process.
The Policy on appointment of Directors and Senior Management, Policy on
Remuneration of Directors and Policy on Remuneration of Key Managerial
Personnel and Employees is stated in the Corporate Governance Report.
MEETINGS
A calendar of Meetings is prepared and circulated in advance to the
Directors.
During the year 6 Board Meetings and 4 Audit Committee Meetings were
convened and held. The details of which are given in the Corporate
Governance Report. The intervening gap between the Meetings was within
the period prescribed under the Companies Act, 2013.
DIRECTOR'S RESPONSIBILITY STATEMENT:
In terms of Section 134 (3) ( c ) read with 134 (5) of the Companies
Act, 2013, the Directors would like to state that:
i) In the preparation of the annual accounts, all the applicable
Accounting Standards have been followed.
ii) The Directors have selected such accounting policies and applied
them consistently and made judgments and estimates that were 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 loss of the
Company for the year under review.
iii) The Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of this Act for safeguarding the assets of the Company and
for preventing and detecting fraud and other irregularities.
iv) The Directors have prepared the Annual accounts on a going concern
basis.
v) The Directors had laid down internal financial controls to be
followed by the Company and that such internal financial controls are
adequate and were operating effectively.
vi) The Directors had devised proper system to ensure compliance with
the provisions of all applicable laws and that such system is adequate
and operating effectively.
RELATED PARTY TRANSACTIONS:
During the year, the Company did not enter into any material
transaction with related parties, under Section 188 of the Companies
Act, 2013. All related party transactions that were entered into during
the financial year were on arm's length basis and were in the ordinary
course of the business. There are no materially significant related
party transactions made by the Company with Promoters, Key Managerial
Personnel or other designated persons which may have potential conflict
with interest of the Company at large.
All the related party transactions entered into by the Company in the
ordinary course of business and were on an arm's length basis. The
requirement of disclosure in the prescribed Form AOC-2 is reported in
the Annexure-C1. Further, the Company's policy on Related Party
Transactions is attached as part of this report vide Annexure C2, as
required under the clause of the listing agreement as revised.
A resolution for a proposal for related party transaction with related
party is placed before this Annual General Meeting for approval of
members of the Company. The details of same are reported in the
explanatory statement annexed to the notice of AGM.
MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF
THE COMPANY WHICH HAVE OCCURRED BETWEEN MARCH 31,2015 AND MAY 28, 2015
(DATE OF THE REPORT)
There were no significant material changes and commitments affecting
the financial position of the Company between the end of financial year
and the date of the Report (May 28, 2015)
SUBSIDIARY COMPANIES
The Company does not have any subsidiary.
CODE OF CONDUCT
The Board of Directors has approved a Code of Conduct which is
applicable to the Members of the Board and all employees in the course
of day to day business operations of the Company. The Company believes
in "Zero Tolerance" against bribery, corruption and unethical dealings
/ behaviours of any form and the Board has laid down the directives to
counter such acts.
The Code lays down the standard procedure of business conduct which is
expected to be followed by all the Directors and the designated
employees in their business dealings and in particular on matters
relating to integrity in the work place, in business practices and in
dealing with stakeholders.
All the Board Members and the Senior Management personnel have
confirmed compliance with the Code. All Management Staff have been
given appropriate training in this regard.
VIGIL MECHANISM / WHISTLE BLOWER POLICY
The Company has a vigil mechanism named Fraud and Risk Management
Policy to deal with instance of fraud and mismanagement, if any.
The Company has a Fraud Risk and Management Policy to deal with
instances of fraud and mismanagement, if any. The FRM Policy ensures
that strict confidentiality is maintained whilst dealing with concerns
and also that no discrimination will be meted out to any person for a
genuinely raised concern.
A high level Committee has been constituted which looks into the
complaints raised. The Committee reports to the Audit Committee and the
Board.
PREVENTION OF INSIDER TRADING:
The Company has adopted a Code of Conduct for Prevention of Insider
Trading with a view to regulate trading in securities by the Directors
and designated employees of the Company. The Code requires
pre-clearance for dealing in the Company's shares and prohibits the
purchase or sale of Company shares by the Directors and the designated
employees while in possession of unpublished price sensitive
information in relation to the Company and during the period when the
Trading Window is closed. The Board is responsible for implementation
of the Code.
All Board Directors and the designated employees have confirmed
compliance with the Code.
AUDITOR'S REPORT/ SECRETARIAL AUDIT REPORT
The observation made in the Auditors' Report read together with
relevant notes thereon are self explanatory and hence, do not call for
any further comments under Section 134 of the Companies Act, 2013.
As required under section 204 (1) of the Companies Act, 2013 the
Company has obtained a Secretarial Audit Report. Certain observation
made in the report with regard to non- compliance with the requirement
of Minimum Public Shareholding (MPS) under 40A of Listing agreement and
SEBI Act, 1992 read with Section 12A of the Securities Contracts
(Regulation) Act, 1956. The SEBI had passed an interim order during
June 2013 with respect to the listed companies including our company
who did not comply with requirement of the MPS. The Company made
various correspondence and proper representation with SEBI to seek
extension of time to comply with Clause 40A of the listing agreement
and MPS norms on grounds that no revenue to be generated from the
stalled projects owing to paucity of funds. The Company, in view of the
said circumstances, requested SEBI to remove the sanctions imposed vide
the said interim order. However, SEBI issued an ORDER dated 27th
February, 2015 confirming the directions issued vide the Interim Order
against the Company, its directors and promoters / promoters group. The
Company / Promoters would ensure in future that all the provisions with
regard to 40A of the Listing agreement and MPS norms are complied to
the fullest extent.
AUDITORS
P. S. Krishnan & Co, Chartered Accountants, retire at the conclusion of
the ensuing Annual General Meeting and being eligible offer themselves
for re-appointment.
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE
(PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013
The Company has in place an Anti-Sexual Harassment Policy in line with
the requirements of The Sexual Harassment of Women at the Workplace
(Prevention, Prohibition & Redressal) Act, 2013. Internal Complaints
Committee (ICC) has been set up to redress complaints received
regarding sexual harassment. All employees (permanent, contractual,
temporary, trainees) are covered under this policy. No complaints were
received during the year 2014-15.
SECRETARIAL AUDIT
Pursuant to provisions of section 204 of the Companies Act, 2013 and
the Companies (Appointment and Remuneration of Managerial Personnel)
Rules, 2014 the company has appointed Sri. S. R. Baalaji, Company
Secretaries in Practice to undertake the Secretarial Audit of the
Company. The Secretarial Audit report is annexed herewith as "Annexure
A"
EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return in form
MGT-9 is annexed herewith as" Annexure B".
BUSINESS RISK MANAGEMENT
Pursuant to section 134 (3) (n) of the Companies Act, 2013 & Clause 49
of the listing agreement, the company has constituted a business risk
management committee. The details of the committee and its terms of
reference are set out in the corporate governance report forming part
of the Boards report.
At present the company has not identified any element of risk which may
threaten the existence of the Company, except high interest cost of
borrowing.
STATEMENT UNDER COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL
PERSONNEL) RULES, 2014
The information required pursuant to Section 197 (12) of the Companies
Act, 2013 read with Rule 5(1) of the Companies (Appointment and
Remuneration of Managerial Personnel) Rules, 2014 in respect of
employees of the Company is provided in Annexure-D.
As there are no employees drawing remuneration of more than Rs.60 Lacs
per annum or drawing remuneration of Rs.5 lacs per month if employed
part of the year as required under Rule 5(2) of the Companies
(Appointment and Remuneration of Managerial Personnel) rules 2014, no
such information is reported.
CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION & ANALYSIS REPORTS
The Corporate Governance and Management Discussion & Analysis Report,
which form an integral part of this Report, are set out as separate
Annexures, together with the Certificate from the Auditors of the
Company regarding compliance with the requirements of Corporate
Governance as stipulated in Clause 49 of the Listing Agreement.
ACKNOWLEDGEMENTS
Your Company and its Directors wish to extend their sincerest thanks to
the Members of the Company, Bankers, Professionals, State Government,
Local Bodies, Customers, Suppliers, Executives, Staff and workers at
all levels for their continuous co-operation and assistance.
For and on behalf of the Board
E. V. Muthukumara Ramalingam
Managing Director &
Place : TIRUPUR M. R. Gautham
Date : 28.05.2015 Executive Director
Mar 31, 2014
Dear Members,
The Directors have great pleasure in presenting the 24th Annual Report
of the Company together with its Audited Profit and Loss Account for
the year ended 31st March, 2014 and the Balance Sheet as on that date.
FINANCIAL RESULTS ( Rs. In lakhs )
PARTICULARS 2013-14 2012-13
Profit Before Interest, Depreciation and Tax 403.72 271.23
Less : Interest 224.70 81.28
Profit Before Depreciation & Tax 179.02 189.94
Less : Depreciation 118.47 91.56
Add : Exceptional Item 6.99 6.99
Profit Before Tax [PBT] 67.55 105.37
Less : Tax Expenses
a. Current Tax 12.75 21.10
b. Tax relating to prior years - 4.23
c. Mat Entitlement (12.75) 4.93
d. Deferred Tax 3.69 14.02
Profit After Tax 63.86 61.09
Balance b/f from previous years 311.12 250.03
Balance to be carried over to Balance sheet 374.98 311.12
ECONOMY OVERVIEW AND OPERATING RESULTS
The year 2013 was a mixed bag for the hospitality industry in the
country considering the devaluation of the rupee against the US dollar,
taxation issues and announcements at the policy level. Growth in gross
domestic product softened to less than 5% in fiscal 2013 and 2014,
after expanding at near-double digit pace for several years which is
visible in the pressure witnessed on hotel occupancy and average room
rates. The year started with despondency and ended with frustration.
During the year 2013-14 your Company''s turnover increased by 11.40%
from Rs.1446 Lakh to Rs.1611 lakh. The gross operating profit (PBDIT)
was higher by 48.85% at Rs.403 lakh from the previous year''s Rs.271
lakh and the net profit was higher by 4.52 % in the current year at
Rs.63.86 lakh compared to Rs.61.09 lakh of the previous year.
DIVIDEND:
The board of directors is intending to utilize the available surplus in
project completion activities. So they propose not to recommend any
dividend this year.
VELAN ESPLANADE - SHOPPING MALL :
The Board of Directors is glad to inform that the Velan Esplanade -
Shopping Mall, the first environment friendly Green Mall in the country
deriving its 100% energy out of renewable, commenced its commercial
operation on 06th December, 2013. However, the entire revenue from this
segment is expected to be generated from the current financial year
onwards as major tenants started their fit-outs gradually and expected
to be completed in the current financial year.
STATUS OF OTHER PROJECTS
Construction of the Multiplex building is commenced but slowed down due
to paucity of funds. The Renewable Energy Co-generation plant operating
on world class GE technology based on bio mass fuel was soft launched
on 12th December 2012 and Air conditioning supply from the plant was
started on the same day and entire power generation is expected from
the current financial year and remaining work in both segments will be
completed as soon as the funding is sorted out.
CORPORATE GOVERNANCE
Pursuant to the requirements of Listing Agreement with the Stock
Exchange, your Directors are pleased to annex the following:
1. Management Discussion and Analysis Report
2. A Report on Corporate Governance
3. Auditor''s certificate regarding compliance of conditions of
Corporate Governance.
INFORMATION REQUIRED UNDER SECTION 217 (1) (e) OF THE COMPANIES ACT,
1956.
The information required under Section 217(1) (e) of the Companies Act,
1956 read with Rule 2 of the Companies (Disclosure of Particulars in
the Report of Board of Directors) Rules, 1988 is furnished hereunder:
I. CONSERVATION OF ENERGY:
a. The operations of the Company are not energy intensive. However the
Company has taken all possible measures to control and reduce
consumption of energy. The Company is making continuous efforts to
conserve and optimize energy wherever practicable by economizing on
fuel and power.
b. Since the activity of the Company is not covered under the list of
specified Industries under the Schedule to the said Rules, the
information to be reported in Form-A, the form for Disclosure of
Particulars with respect to Conservation of Energy is not furnished.
II. TECHNOLOGY ABSORPTION:
The Company has no technical collaboration arrangement with any
organization.
III. FOREIGN EXCHANGE EARNINGS AND OUTGO
Foreign Exchange Current Year 2013-14 Previous Year 2012-13
Earnings And Outgo [Rs.in lakhs] [Rs.in lakhs]
1. Earnings 328.53 301.80
2. Expenditure in Nil Nil
Foreign Currency
INFORMATION REQUIRED UNDER SECTION 217 (2A) OF THE COMPANIES ACT, 1956.
None of employee of the Company was in receipt of remuneration, which
in the aggregate exceeded the limits prescribed under sub-section (2A)
of Section 217 of the Companies Act, 1956, during the year.
DIRECTORS'' RESPONSIBILITY STATEMENT UNDER SECTION 217 (2AA) OF THE
COMPANIES (AMENDMENT ACT) 2000
The Board of Directors Report that:
i) Your Directors have followed the applicable accounting standards, in
the preparation of annual accounts.
ii) your 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 31st March, 2014 and of
the Profit of the Company for that period.
iii) your Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 1956 for safeguarding the assets of
the Company and for preventing and detecting fraud and other
irregularities and
iv) Your Directors have prepared the annual accounts on a ''going
concern'' basis.
v) The financial statements have been audited by M/s.P.S.Krishnan &
Co., Chartered Accountants, the Statutory Auditors.
vi) The Audit Committee meets periodically with internal auditor and
the statutory auditors to review the manner in which the auditors are
discharging their responsibilities, and to discuss auditing, internal
control and financial reporting issues. To ensure complete
independence, the statutory auditors and the internal auditors have
full and free access to the members of the Audit Committee to discuss
any matter of substance.
DEPOSITS
Your Company has neither invited nor accepted any fixed deposits from
the public as per the provisions of Section 58A of the Companies Act,
1956 during the year.
DIRECTORS
The Companies Act, 2013 provides for appointment of independent
directors. The provision of retirement by rotation as defined in the
Act shall not apply to such Independent Directors. Sub- Section (10) of
Section 149 of the Companies Act, 2013 provides that independent
directors shall hold office a term of upto five consecutive years on
the Board of Directors of the Company and shall be eligible for
re-appointment on passing a special resolution by the shareholders of
the company. In the transition to the Companies Act, 2013, those
Independent Directors who have already served for ten or more years
will serve for a maximum period of one term of five years. This is
consistent with the provisions of Companies Act, 2013. In effect, the
transition will be managed by re-appointing such Independent Directors
for a period of one more term that does not exceed five years.
Impending notification of Section 149 and other applicable provisions
of the Companies Act, 2013, your Directors are seeking re-appointment
of Sri.P.Ganesan, and Sri.Giri Balasubramanian as Independent Directors
for five consecutive years for a term upto 28th September, 2019.
Details of the proposal for re-appointment of the above Directors are
mentioned in the Explanatory Statement under Section 102 of the
Companies Act, 2013 of the Notice of the 24th Annual General Meeting.
Dr.Namasivayam Karthikeyan retires by rotation at the forthcoming
Annual General Meeting and expressed his intention not to seek
re-appointment. The Board conveys its deep sense of appreciation for
the service rendered by him during his tenure as Member of the Board
and other Committees.
The Company has in terms of provisions of Section 160 of the Companies
Act, 2013 received a Notice in writing from a member, proposing
Sri.S.P.Sivanandam''s candidature for the office of a Director of the
Company. We seek your support in confirming his appointment as a
Director not liable to retire by rotation.
Sri.K.Balasubramanian and Smt.M.Sasikala Non-Executive-Non-Independent
retire at the forthcoming Annual General Meeting and being eligible
offers himself for re-appointment.
POSTAL BALLOT
During the year under review, an ordinary resolution has been passed
under the provisions of Section 293(1)(a) of the erstwhile Companies
Act, 1956 authorizing to sell / transfer or otherwise dispose off by
way of slump sale or otherwise one of the Undertaking of the Company,
viz. Velan Hotel, Bedford, Coonoor through Postal Ballot.
AUDITORS
M/s. P.S.Krishnan & Co., Company''s present Auditors retire at the
ensuing Annual General Meeting and being eligible for reappointment,
they have consented to continue to be the Auditors of the Company.
BANKERS
M/s.Allahabad Bank, M/s.Andhra Bank, M/s.AXIS Bank and M/s.Union Bank
of India are bankers to the Company and your Directors place on record
their appreciation for their co-operation and services.
SAFETY AND SECURITY
Hotels have become vulnerable to terror attacks on account of their
high profile guests that include foreign tourists. Keeping in mind the
security threats to the hospitality industry in India, the company has
stepped up its efforts to ensure an environment of well being, safety
and security for all its guests and co-workers. The company''s guest
floors as well as all public areas are well equipped with closed
circuit cameras. Movement of all vehicles, employees, vendors and
guests is monitored and scanned.
ACKNOWLEDGEMENT
Your Directors would like to express their sincere appreciation and
gratitude for the cooperation and assistance from its shareholders,
bankers, regulatory bodies, Statutory Auditors / Professionals and
other business constituents during the year under review.
Your Directors also wish to place on record their deep sense of
appreciation for the contribution and commitments displayed by
Executives, Staff and Employees of the Company.
For and on behalf of the Board
E.V.Muthukumara Ramalingam
Chairman of the Meeting and Managing Director
Place : Tirupur
Date : 30/05/2014
Mar 31, 2013
To The Shareholders, Velan Hotels Limited
Ladies and Gentlemen,
The Directors have great pleasure in presenting the 23rd Annual Report
of the Company together with its Audited Profit and Loss Account for
the year ended 31st March, 2013 and the Balance Sheet as on that date.
FINANCIAL RESULTS
(Rs. in lakhs)
PARTICULARS 2012-13 2011-12
Profit Before Interest,
Depreciation and Tax 271.23 330.26
Less : Interest 81.28 90.99
Profit Before Depreciation & Tax 189.94 239.28
Less : Depreciation 91.56 89.86
Add : Exceptional Item 6.99 6.99
Profit Before Tax [PBT] 105.37 156.40.
Less : Tax Expenses
a) Current Tax 21.10 31.30
b) Tax relating to prior years 4.23 9.28
c) Mat Entitlement 4.93 22.49
d) Deferred Tax 14.02 (0.50)
Profit After Tax [PAT] 61.09 93.83
Balance b/f from previous years 250.03 156.20
Profit Available for appropriation 311.12 250.03
Less : Proposed Dividend --- ---
Less : Tax on proposed Dividend --- ---
Balance to be carried over to
Balance sheet 311.12 250.03
ECONOMY OVERVIEW AND OPERATING RESULTS
The year 2012-13 was another challenging and tough year owing to
moderate growth in global economy due to the shock of the Eurozone
crisis which has affected trade across industries and geographies.
Global risk aversion led to a decrease in exports by India, which in
turn exerted downward pressure on the economy by widening the current
account deficit in the fiscal year 2012/13. The slow down in tourist
arrivals as well as rise in room inventory affected the hotel industry
too. In 2012-13, the growth in foreign tourist arrivals to India slowed
down to 2.33 per cent versus 5.09 per cent in 2011-12.
The most serious challenge faced the Indian economy was inflation.
Supply-side constraints, logistical issues and poor agricultural
performance due to erratic monsoon have led to a sharp increase in food
prices, a crucial determinant of inflation. Rising fuel prices and the
move to more expensive sources of fuel have raised the level of public
expenditure. Coupled with falling export demand, this has stoked
inflationary pressures through currency depreciation.
During the year 2012-13 your Company''s turnover decreased by 2.37% from
Rs.1481 lakh to Rs.1446 Lakh. The gross operating profit (PBDIT) was
lower by 17.87% at Rs.271 lakh from the previous year''s Rs.330 lakh and
the net profit was lower by 34.89 % in the current year at Rs.61 lakh
compared to Rs.94 lakh in the previous year. The increase in operating
costs are mainly due to increase in power, fuel expenses and repairs
and maintenance costs. As being in the hotel industry, it is necessary
to maintain items should be made available irrespective of guest actual
occupancy level.
Repairs and maintenance increases is due to renovation of all items of
small value that increase the guest conveniences.
As the Biomass plant project activities are almost completed and will
be ready for commissioning during the year 2013-14, the Company will
save the power cost which constitutes almost 25% of total operating
cost and thereby will increase the profitability in the ensuing years.
As the total income decreased by 2.37% from last year, as the Garments
and Knitting Industries in Tirupur are reeling under recessionary trend
due to various economic factors.
DIVIDEND:
The Board of Directors are happy to declare that the various expansion
activities are at various stages nearing completion. The Board of
Directors are intending to utilize the available surplus in project
completion activities. So they propose not to recommend any dividend
this year.
FUTURE PROSPECTS AND EXPANSION:
The Board is highly optimistic that all the project expansion activies
are nearing completion and the asset base of the Company is increasing
due to addition of expansion components with the Company. Once these
activities are completed, the Board is expecting the increase in income
as well in profits.
As the expansion projects activities are finalized and subsequently
upgraded in technological and increased in scope to make it world
class, state-of-art facility, the total project cost increased from
Rs.124 crores to Rs.162 crores and this cost includes the land
acquisition for biomass growing land and working capital requirement
for the power generation plant.
VELAN ESPLANADE - SHOPPING MALL
The Velan Esplanade (Mall & Multiplex) is the first environment
friendly Green Mall in the country deriving its 100% energy out of
renewable. The project is in a very high strategic location and is the
first and only mall of Tirupur. The Velan Esplanade is fully completed
and handed over to the tenants for fit-outs. The mall would house
around 32-34 retail outlets apart from the food court, Cash''n carry and
the 6-screen Multiplex. The mall was inaugurated (Soft launch) on 12th
December, 2012. The commencement of commercial operation of Shopping
Mall is expected to start earning in Q2.
VELAN ESPLANADE - MULTIPLEX
The Multiplex would be operated by Satyam Cinemas and the 45,000 sq ft
Cash''n Carry is leased to Reliance Fresh. The Multiplex is under
construction and is expected to be given for fit-outs and expected to
be operational by during the year 2013-14.
BIO-MASS BASED RENEWABLE ENERGY PLANT
The Renewable Energy Co-generation plant operating on world class GE
Technology based on Bio-mass fuel (a technology presently employed in
the hotel already) will bring down the cost of power now and in future.
The surplus power will be sold at market rates. The by-product of
chilled water will meet the entire air-conditioning requirement of the
hotel and The Velan Esplanade thereby reducing the operating costs.
The charcoal recovered can also be sold which will shore up the
top-line. The plant is also eligible for Renewable Energy Certificate
and Carbon Credits, which will also yield significant revenues. This
plant that used a technology approved by UNFCCC for meeting CDM
benefits was launched (soft launch) on 12th December 2012 and Air
conditioning supply from the plant was started on 12th December, 2012
and Power generation will be available from the year 2013-14.
BIO-MASS PLANTATIONS
The Company is convinced that there is a need to go in for bio-mass
cultivation as a backward integration for the power plant, to ensure
regular supply of bio-mass, which will also reduce the raw material
cost.
The Renewable Energy Plant will operate on Wood (Prosopsis Julie
Flora/Melia Dubia). The Company has identified 800 acres of land in
South Tamil Nadu. The Company would develop the land with the required
plant & machinery, farm equipments and bare Irrigation/Fertilisation
systems required for captive cultivation of Prosopsis Julie Flora/Melia
Dubia. The Bio-Mass Plantation will give us the existing crop for
immediate use. Hence, the bio-mass requirement for our plant would be
met by our own plantation.
CONVENTION CENTRE
The Velan Hotel- Greenfields at Tirupur is well known to house its
conventions in the existing two large halls and the open landed area in
the Velan property by erecting further temporary structures.
The company after understanding the demand for good convention halls in
Tirupur, intends to add a third large hall. The proportional land
costing has already been brought in to the Company. The civil works
will start soon and will be ready in the year of 2013-14.This income
will add profitbility to the Company considerably.
ADDITIONS / RENOVATION
It becomes necessary to update and modernise the existing hotel
property and its facilities to keep the hotel competitive worth. The
planned additions and renovations at the existing hotels at Tirupur and
Coonoor have been completed, which resulted in up-gradation of rooms,
the spa at Tirupur hotel, the food and beverage outlets at Tirupur
(signature restaurant and bar).
The Management is taking effective steps for completion of the projects
at stipulated date. Your Company continues to pursue the completion of
on-going projects to achieve sustainable and profitable growth.
CORPORATE GOVERNANCE
Pursuant to the requirements of Listing Agreement with the Stock
Exchange, your Directors are pleased to annex the following:
1. Management Discussion and Analysis Report
2. A Report on Corporate Governance
3. Auditor''s certificate regarding compliance of conditions of
Corporate Governance.
INFORMATION REQUIRED UNDER SECTION 217 (1) (e) OF THE COMPANIES ACT,
1956.
The information required under Section 217(1) (e) of the Companies Act,
1956 read with Rule 2 of the Companies (Disclosure of Particulars in
the Report of Board of Directors) Rules, 1988 is furnished hereunder:
I. CONSERVATION OF ENERGY:
a. The operations of the Company are not energy intensive. However the
Company has taken all possible measures to control and reduce
consumption of energy. The Company is making continuous efforts to
conserve and optimize energy wherever practicable by economizing on
fuel and power.
b. Since the activity of the Company is not covered under the list of
specified Industries under the Schedule to the said Rules, the
information to be reported in Form-A, the form for Disclosure of
Particulars with respect to Conservation of Energy is not furnished.
II. TECHNOLOGY ABSORPTION:
The Company has no technical collaboration arrangement with any
organization.
INFORMATION REQUIRED UNDER SECTION 217 (2A) OF THE COMPANIES ACT, 1956.
None of employee of the Company was in receipt of remuneration, which
in the aggregate exceeded the limits prescribed under sub-section (2A)
of Section 217 of the Companies Act, 1956 during the year.
DIRECTORS'' RESPONSIBILITY STATEMENT UNDER SECTION 217 (2AA) OF THE
COMPANIES (AMENDMENT ACT) 2000
The Board of Directors Report that:
i) Your Directors have followed the applicable Accounting Standards, in
the preparation of annual accounts.
ii) your 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 31st March, 2013 and of
the Profit of the Company for that period.
iii) your Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 1956 for safeguarding the assets of
the Company and for preventing and detecting fraud and other
irregularities and
iv) Your Directors have prepared the annual accounts on a ''going
concern'' basis.
v) The financial statements have been audited by M/s.P.S.Krishnan &
Co., Chartered Accountants, the Statutory Auditors.
vi) The Audit Committee meets periodically with Internal Auditor and
the Statutory Auditors to review the manner in which the auditors are
discharging their responsibilities, and to discuss auditing, internal
control and financial reporting issues. To ensure complete
independence, the Statutory Auditors and the Internal Auditors have
full and free access to the members of the Audit Committee to discuss
any matter of substance.
DEPOSITS
Your Company has neither invited nor accepted any fixed deposits from
the public as per the provisions of Section 58A of the Companies Act,
1956 during the year.
DIRECTORS
Sri.T.Gopalakrishnan retires by rotation at the forthcoming Annual
General Meeting. Sri.T.Gopalakrishnan has expressed his intention not
to seek re-appointment. The Members of the Board place on record their
deep sense of appreciation for the services rendered by
Sri.T.Gopalakrishnan during his tenure as Member of the Board and other
Committees.
Directors Sri.K.Subramaniam and Smt.M.Sasikala retire by rotation at
the forthcoming Annual General Meeting and being eligible for
re-election, offer themselves for re-appointment.
The Company has in terms of provisions of Section 257 of the Companies
Act, 1956 received a Notice in writing from a member, proposing
Sri.Giri Balasubramanian''s candidature for the office of a Director of
the Company. We seek your support in confirming his appointment as a
Director liable to retire by rotation.
AUDITORS
M/s. P.S.Krishnan & Co., Company''s present Auditors retire at the
ensuing Annual General Meeting and being eligible for reappointment,
they have consented to continue to be the Auditors of the Company.
BANKERS
M/s.Allahabad Bank, M/s.Andhra Bank, M/s.AXIS Bank and M/s.Union Bank
of India are bankers to the Company and your Directors place on record
their appreciation for their co-operation and services.
SAFETY AND SECURITY
Hotels have become vulnerable to terror attacks on account of their
high profile guests that include foreign tourists. Keeping in mind the
security threats to the hospitality industry in India, the company has
stepped up its efforts to ensure an environment of well being, safety
and security for all its guests and co-workers. The company''s guest
floors as well as all public areas are well equipped with closed
circuit cameras. Movement of all vehicles, employees, vendors and
guests is monitored and scanned.
ACKNOWLEDGEMENT
Your Directors would like to express their sincere appreciation and
gratitude for the cooperation and assistance from its shareholders,
bankers, regulatory bodies, Statutory Auditors / Professionals and
other business constituents during the year under review.
Your Directors also wish to place on record their deep sense of
appreciation for the contribution and commitments displayed by
Executives, Staff and Employees of the Company.
For and on behalf of the Board
Place : Tirupur E.V. Muthukumara Ramalingam
Date : 30.05.2013 Managing Director and
Chairman of the Meeting
Mar 31, 2012
The Directors have great pleasure in presenting the 22nd Annual Report
of the Company together with its Audited Profit and Loss Account for
the year ended 31st March, 2012 and the Balance Sheet as on that date.
FINANCIAL RESULTS (Rs. in lakhs)
PARTICULARS 2011-12 2010-11
Profit Before Interest, Depreciation
and Tax 342.20 382.83
Less : Interest 102.92 92.07
Profit Before Depreciation & Tax 239.28 290.76
Less : Depreciation 89.86 88.92
Add : Exceptional Item 6.99 (15.07)
Profit Before Tax (PBT) 156.40 186.76
Less : Tax Expenses
a) Current Tax 31.30 37.00
b) Tax relating to prior years 9.28 3.23
c) Mat Entitlement 22.49 1.90
d) Deferred Tax (0.50) 27.99
Profit After Tax 93.83 116.64
Balance b/f from previous years 156.20 107.11
Profit Available for appropriation 250.03 223.75
Less : Proposed Dividend - 58.13
Less : Tax on proposed Dividend - 9.43
Balance to be carried over to Balance sheet 250.03 156.20
OPERATING RESULTS AND OVERVIEW
2011-12 has been a bit of a flat year for all sectors in general and
hospitality in particular as the global economy has severely been
buffeted by various natural, social and economic headwinds; the
earthquake in Japan, the floods in Thailand, high interest rates,
spiraling inflation, the civil unrest in the Arab countries and ongoing
sovereign debt crisis in Europe Region. The Indian economy has also
been severely affected by, but has withstood the turbulence caused by
global economics in the past years. Vital to the performance of the
hospitality sector is the economic scenario of world and domestic
economy.
Due to overall slowdown, your Company's financial performance was
affected significantly compared to last year. However, with patronage
of loyal customers of the hotel, your Company could manage the profit
margin this year as well. The Company registered a revenue of Rs. 1481
lakhs compared to Rs. 1480 Lakhs in 2010-11. Profit Before
Depreciation, Interest and Tax was Rs. 342.20 Lakhs compared to Rs.
382.83 Lakhs in 2010-11 and Profit Before Tax was Rs. 156.40 Lakhs
compared to Rs. 186.76 lakhs in 2010-11.
DIVIDEND:
As the surplus generated is being deployed towards executing the
various projects, your Directors prefer not to recommend any dividend
on share capital of the Company for the year under report.
FUTURE PROSPECTS AND EXPANSION:
Your Company is progressing in the diversification cum expansion on
projects on adjoining land of existing hotel building. Due to the vast
opportunities and prospects of growth in Tirupur which is hub of
textile exports, the Company has already started to set up shopping and
entertainment malls - India's first 100 percent Green Shopping Mall -
in the City. To meet the energy requirement of the Company, a bio-mass
based energy plant that used a technology approved by UNFCCC for
meeting CDM benefits is being setup. The Management is taking
effective steps for completion of the projects at stipulated date. Your
Company continues to pursue the completion of on-going projects to
achieve sustainable and profitable growth.
RIGHTS ISSUE
In order to meet the cost of funding of the various projects undertaken
by the Company, the Company has raised equity share capital on Rights
basis in the ratio of sixty nine equity shares at a price of Rs. 23/-
per share for every twenty equity shares held. The Rights issue opened
on August 24, 2011 and closed on September 22, 2011. 2,42,14,119 equity
shares were allotted to eligible shareholders, in consultation with the
BSE Limited (Designated Stock Exchange) on November 4, 2011. Such
equity shares became eligible for trading on BSE effective from
November 11, 2011.
Consequent to allotment of the aforesaid shares, the Paid-Up Equity
Share Capital of the Company stands increased from Rs. 775 lakhs to Rs.
3196.41 lakhs with effect from November 4, 2011.
FINANCE
Your Company is executing various projects through its equity, internal
accruals and borrowings from Andhra Bank and Allahabad Bank. The total
borrowings from the financial institutions as on 31st March, 2012 are
Rs. 58.21 crores.
CORPORATE GOVERNANCE
Pursuant to the requirements of Listing Agreement with the Stock
Exchange, your Directors are pleased to annex the following:
1. Management Discussion and Analysis Report
2. A Report on Corporate Governance
3. Auditor's certificate regarding compliance of conditions of
Corporate Governance.
INFORMATION REQUIRED UNDER SECTION 217 (1) (e) OF THE COMPANIES ACT,
1956.
The information required under Section 217(1) (e) of the Companies Act,
1956 read with Rule 2 of the Companies (Disclosure of Particulars in
the Report of Board of Directors) Rules, 1988 is furnished hereunder:
I. CONSERVATION OF ENERGY:
a. The operations of the Company are not energy intensive. However,
the Company has taken all possible measures to control and reduce
consumption of energy. The Company is making continuous efforts to
conserve and optimize energy wherever practicable by economizing on
fuel and power.
b. As the activity of the Company is not covered under the list of
specified Industries under the Schedule to the said Rules, the
information to be reported in Form-A, the form for Disclosure of
Particulars with respect to Conservation of Energy is not furnished.
II. TECHNOLOGY ABSORPTION:
The Company has no technical collaboration arrangement with any
organization.
INFORMATION REQUIRED UNDER SECTION 217 (2A) OF THE COMPANIES ACT, 1956.
None of employee of the Company was in receipt of remuneration, which
in the aggregate exceeded the limits prescribed under sub-section (2A)
of Section 217 of the Companies Act, 1956 during the year.
DIRECTORS' RESPONSIBILITY STATEMENT UNDER SECTION 217 (2AA) OF THE
COMPANIES (AMENDMENT ACT) 2000
The Board of Directors Report that:
i) Your Directors have followed the applicable accounting standards, in
the preparation of Annual Accounts.
ii) Your 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 31st March, 2012 and of
the Profit of the Company for that year.
iii) Your Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 1956 for safeguarding the assets of
the Company and for preventing and detecting fraud and other
irregularities and
iv) Your Directors have prepared the annual accounts on a 'going
concern' basis.
v) The financial statements have been audited by M/s. P. S. Krishnan &
Co., Chartered Accountants, the Statutory Auditors.
vi) The Audit Committee meets periodically with internal auditor and
the statutory auditors to review the manner in which the auditors are
discharging their responsibilities and to discuss auditing, internal
control and financial reporting issues. To ensure complete
independence, the statutory auditors and the internal auditor have full
and free access to the Members of the Audit Committee to discuss any
matter of substance.
DEPOSITS
Your Company has neither invited nor accepted any fixed deposits from
the public as per the provisions of Section 58A of the Companies Act,
1956 during the year.
DIRECTORS
With profound grief and sorrow we inform you that Mr. R. V. E.
Venkatachalam, who was the Chairman of the Company, passed away on July
26, 2011. We sincerely place on record his contribution to the growth
of the Company during his tenure as Chairman.
The Board had appointed Smt. M. Sasikala and Sri K. Subramaniam as
members of the Board in the capacity of Non-Executive Directors and Sri
B. A. Madhusudhan as Member of the Board in the capacity of Whole-Time
Director. The said Directors have been inducted as Additional Directors
pursuant to the provisions of Section 260 of the Companies Act, 1956 to
hold office till the conclusion of this Annual General Meeting. Mr. B.
A. Madhusudhan, Smt. M. Sasikala and Mr. K. Subramaniam are proposed to
be appointed as Directors in this Annual General Meeting scheduled to
take place on 12/09/2012 and notice under Section 257 of the Companies
Act 1956 have been received from a Member proposing their appointments.
The brief profiles of said Director's are reported elsewhere in the
Annual Report for the reference of Members.
Sri P.Ganesan and Dr. Namasivayam Karthikeyan retire by rotation at the
forthcoming Annual General Meeting and being eligible for re-election,
offer themselves for re-appointment.
AUDITORS
M/s. P. S. Krishnan & Co., Company's present Auditors are to retire at
the ensuing Annual General Meeting and being eligible for
reappointment, they have consented to continue to be the Auditors of
the Company.
BANKERS
M/s. Allahabad Bank, M/s. Andhra Bank, M/s. AXIS Bank, M/s. State Bank
of India and M/s. Union Bank of India are bankers to the Company and
your Directors place on record their appreciation for their co-
operation and services.
SAFETY AND SECURITY
Hotels have become vulnerable to terror attacks on account of their
high profile guests that include foreign tourists. Keeping in mind the
security threats to the hospitality industry in India, the company has
stepped up its efforts to ensure an environment of well being, safety
and security for all its guests and co-workers. The company's guest
floors as well as all public areas are well equipped with closed
circuit cameras. Movement of all vehicles, employees, vendors and
guests is monitored and scanned.
ACKNOWLEDGEMENT
Your Directors would like to express their sincere appreciation and
gratitude for the cooperation and assistance from its shareholders,
bankers, regulatory bodies, Statutory Auditors/Professionals and other
business constituents during the year under review.
Your Directors also wish to place on record their deep sense of
appreciation for the contribution and commitments displayed by
Executives, Staff and Employees of the Company.
For and on behalf of the Board
E. V. Muthukumara Ramalingam
Managing Director
Place : Tirupur
Date : 30.05.2012
Mar 31, 2011
The Shareholders,
Velan Hotels Limited
Ladies and Gentlemen,
The Directors have great pleasure in presenting the 21s1 Annual Report
of the Company together with its Audited Profit and Loss Account for
the year ended 31st March, 2011 and the Balance Sheet as on that date.
FINANCIAL RESULTS (Rs.in lakhs)
PARTICULARS 2010-11 2009-10
Profit Before Interest, Depreciation
and Tax 349.34 329.49
Less : Interest 80.64 83.51
Profit Before Depreciation & Tax 268.70 245.98
Less: Depreciation 81.94 70.54
Profit Before Tax [PBT] 186.76 175.44
Less :Tax Liability 66.89 61.81
Prior Year Adjustment 3.23 1.27
Profit After Tax 116.64 112.36
Balance b/f from previous years 107.11 62.52
Profit Available for appropriation 223.75 174.88
Less: Proposed Dividend 58.13 58.13
Less: Tax on proposed Dividend 9.43 9.65
Balance to be carried over to
Balance sheet 156.20 107.11
OPERATING RESULTS AND OVERVIEW
2010 for the Hotel and Tourism Industry would be remembered as a year
in which the market had a positive turning point ending two consecutive
years of declining performance levels and profitability. Indian economy
recovered quickly and rapidly, leading to a return of international
business travel to back sustained domestic travel. India's hotel
industry posted performance improvements in 2010 compared to the year
prior. Increases in occupancy have generally outweighed the falls in
average daily rate (ADR), resulting in improved revenue per available
room. RevPAR for India as a whole was up 6.2 percent during the year
2010 compared with the year 2009.
During the year under review, the Company's Average Room Rentals (ARR)
was marginally higher at 6.97% compared to the previous year. Your
company's total income grew by 11.00% from Rs. 1333.63 lakhs to
Rs.1479.57 lakhs in 2010-11. Profit Before Taxes (PBT) increased by
6.45% from Rs.175.44 lakhs to Rs. 186.76 lakhs in 2010-11 and Profit
After Tax (PAT) increased by 4.61% from Rs. 112.36 to Rs. 116.64 lakhs
in 2010-11.
DIVIDEND:
Your Directors are pleased to recommend a dividend of Rs.0.75 per
equity share for the year ended 31st March, 2011
FUTURE PROSPECTS AND EXPANSION:
The company has started diversifying its activities into Mall,
Multiplex and Convention Centre construction, marketing and maintenance
as well as the setting up of a renewable energy plant to contribute to
the high energy consuming retail and screening space.
The company's 20-year existence and goodwill has helped in attracting
the experienced personnel required to implement the projects. The
company is also geared up to successfully operate and manage the new
business units which would be commissioned in the next 12-15 months.
The company's hotel facilities have been updated continuously over the
past 8-10 years but a full-scale revamping is currently under process.
This exercise will ensure that your company's flagship hotel property
at Tirupur will remain the best hotel in Tirupur attracting the creme
of the overseas and high net worth visitors coming into Tirupur for
business purposes primarily. The company's hotel property at Coonoor is
also being revamped to ensure that the day-to-day operations are able
to handle the stiff competition in the tourism sector and also to cope
with the ever-changing dynamics of the Nilgiris tourism market.
The company has so far relied on the hosiery-oriented Tirupur market
for its business. The flagship hotel's design with its high standards
of operations has helped attract and retain a good clientele base. Your
company is now keenly looking at other upcoming destinations in the
Tamilnadu / Kerala / Pondicherry region to expand its hotel operations
in the 3-star category.
SHARE CAPITAL
Your company has undertaken various projects and proposed to issue
equity shares on Rights basis. Considering the future prospects of the
Company, there may be a need for more funds in the growth of the
business. Hence, the Company has enhanced its Authorised Share Capital
from Rs. 15.50 crores to Rs.35.00 crores at the 20th Annual General
Meeting of the Company held on 06th September, 2010. Further, your
company proposes now to enhance its Authorised Share Capital from Rs.35
Crores to Rs.50 Crores for its future needs.
EXTRA-ORDINARY GENERAL MEETING
Members of the Company at Extra-Ordinary General Meeting held on 12th
June, 2010 approved the enhancement in Authorised Share Capital of the
Company upto Rs. 15.50 crores and borrowing power of the Company upto
Rs.75 Crores. Members also approved commencement of new business,
altering the capital clause of Memorandum and Articles of the
Association of the Company and charging and mortgaging of the Company's
assets under Section 293(1)(a) of the Companies Act, 1956 for securing
term loans sanctioned by the Banks / Financial Institutions.
RIGHTS ISSUE
Your company proposes to increase the paid up share capital by issue of
equity shares on rights basis for an amount not exceeding Rs.65 crores
including premium which will be utilized to part finance the cost of
funding of the various projects undertaken by the Company. After
completing the due diligence conducted by various intermediaries, your
company has obtained in-principle approval from the Bombay Stock
Exchange Ltd and permission from Securities and Exchange Board of
India. Your company has started the process to complete the Rights
Issue before the quarter ending 30th September, 2011.
FINANCE
During the year, your company has been sanctioned term loans and bank
guarantee including take over of foreign currency term loan of Bank of
Bahrain & Kuwait BSC by Allahabad Bank and Andhra Bank on multiple
banking amounting to Rs.75.92 crores for part financing the integrated
project of constructing Shopping Mall, Multiplex with service
apartments, Convention Hall, Bio-Mass based Co-Generation plant and
renovation work at Tirupur and Coonoor Hotels.
The company has started to avail term loans from both banks and
deployed into its on-going projects.
CORPORATE GOVERNANCE
Pursuant to the requirements of Listing Agreement with the Stock
Exchange, your Directors are pleased to annex the following:
1. Management Discussion and Analysis Report
2. A Report on Corporate Governance
3. Auditor's certificate regarding compliance of conditions of
Corporate Governance.
INFORMATION REQUIRED UNDER SECTION 217(1) (e) OF THE COMPANIES ACT,
1956.
The information required under Section 217(1) (e) of the Companies Act,
1956 read with Rule 2 of the Companies (Disclosure of Particulars in
the Report of Board of Directors) Rules, 1988 is furnished hereunder:
I. CONSERVATION OF ENERGY:
a. The existing hotel operations of the Company are not energy
intensive. But, the upcoming mall and multiplex projects are highly
energy intensive. Hence, the decision to go in for the renewable energy
co-gen plant. Further, the Company has taken all possible measures to
control and reduce consumption of energy. The Company is making
continuous efforts to conserve and optimize energy wherever practicable
by economizing on fuel and power.
b. Since the activity of the Company is not covered under the list of
specified Industries under the Schedule to the said Rules, the
information to be reported in Form-A, the form for Disclosure of
Particulars with respect to Conservation of Energy is not furnished.
II. TECHNOLOGYABSORPTION:
The Company has no technical collaboration arrangement with any
organization.
III. FOREIGN EXCHANGE EARNINGS AND OUTGO
Foreign Exchange Earnings Current Year Previous Year
And Outgo 2010-11 2009-10
[Rs.in lakhs] [Rs.in lakhs]
1. Earnings 490.12 538.91
2. Expenditure in Foreign
Currency
a) Interest on Foreign 48.52 28.86
Currency Term Loan
b) Repayment of the above 783.55 51.88
Term Loan fully
INFORMATION REQUIRED UNDER SECTION 217 (2A) OF THE COMPANIES ACT, 1956.
None of employee of the Company was in receipt of remuneration, which
in the aggregate exceeded the limits prescribed under sub-section (2A)
of Section 217 of the Companies Act, 1956, during the year.
DIRECTORS' RESPONSIBILITY STATEMENT UNDER SECTION 217 (2AA) OF THE
COMPANIES (AMENDMENT ACT) 2000
The Board of Directors Report that:
i) Your Directors have followed the applicable accounting standards, in
the preparation of annual accounts.
ii) your 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 31st March, 2011 and of
the Profit of the Companyforthat year.
iii) your Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 1956 for safeguarding the assets of
the Company and for preventing and detecting fraud and other
irregularities and
iv) Your Directors have prepared the annual accounts on a 'going
concern' basis.
v) The financial statements have been audited by M/s.P.S.Krishnan &
Co., Chartered Accountants, the Statutory Auditors.
vi) The Audit Committee meets periodically with internal auditor and
the statutory auditors to review the manner in which the auditors are
discharging their responsibilities, and to discuss auditing, internal
control and financial reporting issues. To ensure complete
independence, the statutory auditors and the internal auditors have
full and free access to the members of the Audit Committee to discuss
any matter of substance.
DEPOSITS
Your Company has neither invited nor accepted any fixed deposits from
the public as per the provisions of Section 58Aof the Companies Act,
1956 during the year.
DIRECTORS
Sri.R.V.E.Venkatachalam and Sri.TGopalakrishnan retire by rotation at
the forthcoming Annual General Meeting and being eligible for
re-election, offer themselves for re-appointment.
AUDITORS
M/s. P.S.Krishnan & Co., Company's existing Auditors are to retire at
the ensuing Annual General Meeting and being eligible for
reappointment, they have consented to continue to be the Auditors of
the Company.
BANKERS
M/s.Allahabad Bank, M/s.Andhra Bank, M/s.AXIS Bank, M/s.State Bank of
India and M/s.Union Bank of India are bankers to the Company and your
Directors place on record their appreciation for their co- operation
and services.
ACKNOWLEDGEMENT
Your Directors would like to express their sincere appreciation and
gratitude for the cooperation and assistance from its shareholders,
bankers, regulatory bodies, Statutory Auditors and other business
constituents during the year under review.
Your Directors also wish to place on record their deep sense of
appreciation for the contribution and commitments displayed by
Executives, Staff and Employees of the Company.
For and on behalf of the Board
R.V.E. Venkatachalam
Chairman
Place : Tirupur
Date : 28.06.2011
Mar 31, 2010
The Directors have great pleasure in presenting the 20th Annual Report
of the Company together with its Audited Profit and Loss Account for
the year ended 31st March, 2010 and the Balance Sheet as on that date.
FINANCIAL RESULTS
PARTICULARS 2009-10 2008-09
Profit Before Interest,
Depreciation and Tax 329.49 295.34
Less : Interest 83.51 70.95
Profit Before Depreciation & Tax 245.97 224.39
Less : Depreciation 70.54 61.64
Profit Before Tax [PBT] 175.44 162.75
Less :Tax Liability 63.07 56.61
Profit After Tax 112.36 106.14
Balance b/f from previous years 62.52 1.12
Profit Available for appropriation 174.88 107.26
Less : Proposed Dividend 58.13 38.75
Less : Tax on proposed Dividend 9.65 5.99
Balance to be carried over to
Balance sheet 107.11 62.52
OPERATING RESULTS AND OVERVIEW
2009 has gone into the history books as one of the worst for all
sectors in general, the hotel industry in particular. Revenue per
average room (RevPAR) practically collapsed as travelers stayed away.
Companies reined in travel expenditure and potential tourists stayed at
home. With the global economic machinery almost shuttering to a halt,
the corporate world has engaged in cost cutting via drastic cutbacks on
non-essential expenses. The resultant drop in corporate travel, coupled
with travel advisories issued following the November, 2008 terror
attacks, led to an adverse effect on the industry performance.
Headline wholesale price index inflation accelerated from 1.5 % in
October, 2009 to 9.9% by March, 2010 whereas food articles inflation
accelerated to 16.65 % on y-o-y basis mainly on account of deficient
monsoon, cost of imports went up due to weakening rupee, mismatch in
demand / supply situation of agricultural products in India and
unstable international crude oil prices. The profit margin of Food &
Beverage of your hotel business was affected due to higher inflation in
food articles. The F & B revenue accounts over 35% of the total revenue
of the Hotel.
Despite these unfavourable happenings, your Company did reasonably well
during the year under review. Your companys total income grew by
12.49% from Rs.1184.64 lakhs to Rs.1333.63 lakhs in 2009-10. Profit
Before Taxes (PBT) increased by 7.79% from Rs.162.75 lakhs to Rs.175.44
lakhs in 2009-10 and Profit After Tax (PAT) increased by 5.86% from
Rs.106.14 to Rs.112.36 lakhs in 2009-10. The increase in expenses of
consumption of provision and supplies due to higher inflation, Employee
cost, Interest Cost and general administrative expenses led to a severe
squeeze in operating margins.
Therefore, the Companys overall performance has to be viewed from the
above perspective.
DIVIDEND:
Your Directors are pleased to recommend a dividend of Rs.0.75 per
equity share for the year ended 31st March, 2010 higher than Rs.0.50
per share distributed as dividend in the previous year.
FUTURE OUTLOOK
In the year 2008, the company started work on a multi-tier food outlet
at the centrally located area of Ram Nagar in Coimbatore. This four
format restaurants outlet was commenced in 2009.
In 2009, the company has relocated Velan Uthara to a larger space to
cope with the increase in footfalls.
In the year 2009, 6 new deluxe rooms were added to Velan Hotel, Coonoor
to meet the increased seasonal demand at this tourist destination which
has also been adopted by national level athletes for high-altitude
training.
The company has identified an opportunity in the entertainment business
at Tirupur. Hence, The Velan Esplanade has been planned as a mall and
multiplex complex. The 300,000 sq ft development is planned to be
leased out with large corporates in the retail industry signing up for
spaces. The superstructure work at the velan esplanade site is near
completion. Within this development, your company plans to add 20
serviced apartments to add to the 60 luxury rooms and 10 suites that
are already available at your Tirupur Hotel Property.
The Velan Hotel Greenfields at Tirupur attracts a large number of
overseas guests and hence contributes to the foreign exchange earnings
of the country. To add variety to the existing facilities offered at
your Tirupur hotel, a new barbecue restaurant and a new sports bar is
being added and should be operational in the current year. The luxury
rooms at the Tirupur hotel has been maintained very well and, in the
current year also, 18 more rooms will be modernised to meet the
ever-growing demands of the business travellers at Tirupur.
The Velan Hotel, Coonoor has attracted the Sports Authority of India
(SAI) to set up their high altitude training facilities there. The
athletes with their coaching staff and their support team have been
staying on and off at your Coonoor hotel property. To meet the growing
demands of the SAI and the tourists at Coonoor, few more rooms /
cottages are planned to be added this year. Further, 10 existing deluxe
rooms will be modernised in the current year to maintain the quality
standards expected of the Velan brand.
Also, the Velan Hotels, having a strong food & beverage base and
convention facilities in the US$6 Billion export district headquarters
of Tirupur is facing strong demand for space in the fair and convention
market. Hence, a larger air-conditioned hall to house even larger
sized machinery is required to meet the demands of the exhibitors.
The planned development of the mall / multiplex / convention centre
added to the existing hotel implies a large requirement of energy in
the form of electricity and chilling. To meet the energy requirement of
the company, a BioMass plant is underway to ensure the electricity
needs and the chilling requirement, with the excess produce of
electricity being planned to be supplied to the TNEB grid.
SHARE CAPITAL
Your company is in need of money primarily for its projects and working
capital requirement. In this regard, the Company has enhanced its
Authorised Share Capital from Rs.8.50 crores to Rs.15.50 crores for
which the Extra-ordinary General Meeting has been conducted on 12th
June, 2010 for enhancing its authorized share capital. In addition to
the above, your Company proposes to enhance its Authorised Share
Capital from Rs.15.50 Crores to Rs.35 Crores. Your company is in
process of raising share capital through various options subject to all
applicable laws, rules, regulations and guidelines.
POSTAL BALLOT
Your company conducted Postal Ballot in connection with the alteration
of Object Clause of Memorandum of Association of the Company by
inserting new activities relating to power generation and realty
development in accordance with the provisions of Section 17 of the
Companies Act, 1956 which has been approved by the Shareholders of the
Company by way of Special Resolution through Postal Ballot in terms of
Section 192A of the Companies Act, 1956 read with the Companies (
Passing of Resolution by Postal Ballot) Rules, 2001 on 12-06-2010 with
requisite majority.
FINANCE
The revenue from foreign currency contributed over 45% of total
revenues of the Company. To mitigate loss in exchange fluctuations,
your company has availed Foreign Currency Term Loan of US $ 1,600,000
and a Bank Guarantee Limit of US$ 125,000 for the purpose of retiring
existing high cost loans in INR from State Bank of India. The pricing
of term loan is at LIBOR +550 bps with a floor price of 8.40% per annum
and Bank Guarantee is in the range of 2% to 3% per annum. Besides, the
loans are repayable in foreign currency with an advantage of difference
in dollar and rupee fluctuations.
CORPORATE GOVERNANCE
Pursuant to the requirements of Listing Agreement with the Stock
Exchange, your Directors are pleased to annex the following:
1. Management Discussion and Analysis Report
2. A Report on Corporate Governance
3. Auditors certificate regarding compliance of conditions of
Corporate Governance.
INFORMATION REQUIRED UNDER SECTION 217 (1) (e) OF THE COMPANIES ACT,
1956.
The information required under Section 217(1) (e) of the Companies Act,
1956 read with Rule 2 of the Companies (Disclosure of Particulars in
the Report of Board of Directors) Rules, 1988 is furnished hereunder:
I. CONSERVATION OF ENERGY:
a. The operations of the Company are not energy intensive. However the
Company has taken all possible measures to control and reduce
consumption of energy. The Company is making continuous efforts to
conserve and optimize energy wherever practicable by economizing on
fuel and power. As a step towards energy conservation, the Company had
installed solar water heating systems at Hotel Premises to reduce power
consumption and also initiated several other measures such as
wood-fired boilers has been installed in stead of diesel-fired boilers,
the former is environment friendly and cost effective. These measures
are to derive maximum benefit in terms of reduction in the consumption
of energy and reduce the power cost in the long run.
b. Since the activity of the Company is not covered under the list of
specified industries under the Schedule to the said Rules, the
information to be reported in Form-A, the form for Disclosure of
Particulars with respect to Conservation of Energy, is not furnished.
II. TECHNOLOGY ABSORPTION:
The Company has no technical collaboration / arrangement with any
organization.
III. FOREIGN EXCHANGE EARNINGS AND OUTGO
Foreign Exchange
Earnings And Outgo Current Year 2009-10 Previous Year
2008-09
[Rs.in lakhs] [Rs.in lakhs]
1. Earnings 538.91 501.38
2. Expenditure in
Foreign Currency
a) Term loan interest 29.51 NIL
b) Repayment of Term Loan 80.74
INFORMATION REQUIRED UNDER SECTION 217 (2A) OF THE COMPANIES ACT, 1956.
None of the employees of the Company is in receipt of remuneration,
which in the aggregate exceeded the limits prescribed under sub-section
(2A) of Section 217 of the Companies Act, 1956, during the year.
DIRECTORS RESPONSIBILITY STATEMENT UNDER SECTION 217 (2AA) OF THE
COMPANIES (AMENDMENT ACT) 2000
The Board of Directors Report that:
i) Your Directors have followed the applicable accounting standards, in
the preparation of annual
accounts.
(ii) Your Directors have adopted 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 31st March,
2010 and of the Profit of the Company for that year.
(iii) Your Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 1956 for safeguarding the assets of
the Company and for preventing and detecting fraud and other
irregularities and
(iv) Your Directors have prepared the annual accounts on a going
concern basis.
DEPOSITS
Your Company has neither invited nor accepted any fixed deposits from
the public as per the provisions of Section 58A of the Companies Act,
1956 during the year.
DIRECTORS
Sri.P.Ganesan and Dr.Namasivayam Karthikeyan are retiring by rotation
at the forthcoming Annual General Meeting and being eligible for
re-election, offer themselves for re-appointment.
AUDITORS
M/s. P.S.Krishnan & Co., Companys Auditors are to retire at the
ensuing Annual General Meeting and are eligible for reappointment.
BANKERS
Bank of Bahrain & Kuwait BSC Hyderabad & Mumbai and AXIS Bank,
Coimbatore & Tirupur Branches State Bank of India, Tirupur, Union Bank
of India, Coonoor and ING Vysya Bank, Tirupur to continue to be the
bankers to the Company and your Directors place on record their
appreciation for their services.
ACKNOWLEDGEMENT
Your Directors would like to express their sincere appreciation and
gratitude for the cooperation and assistance from its shareholders,
bankers, regulatory bodies and other business constituents during the
year under review.
Your Directors also wish to place on record their deep sense of
appreciation for the contribution and commitments displayed by
Executives, Staff and Employees of the Company.
For and on behalf of the Board
Place : Tirupur R.V.E. Venkatachalam
Date : 23.07.2010 Chairman
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