DIRECTORS' REPORT FOR THE FINANCIAL YEAR ENDED 3IST MARCH 2016 DEAR MEMBERS, Your Directors have pleasure in presenting the Twenty Seventh Annual Report together with the Audited Accounts of your Company for the financial year ended 31st March 2016. State of Company's Affairs Cumulative income from Main Park and Water Park taken together was Rs. 2714.56 lakhs, Income from Projects was Rs. 313.70 lakhs which registered a growth of 19.21% compared to 2014-15. Income from Other Recreation Facilities was Rs. 553.37 Lakhs and Rental & Merchandising income stood at Rs. 103.69 Lakhs. Income from Branding/Sponsorship & Other Income also registered a growth of 19.53% & 28.43% respectively, when compared to 2014-2015. The overall annual footfall of the Park including Bowler's Den, Nicco Super Bowl and Other Recreation Facilities was 12.38 lakhs compared to 15.10 lakhs in 2014-2015. The footfall at the water park was also marginally down by 2.23% to 2.63 Lakhs visitors. In order to maintain novelty of the 'Wet-O-Wild' water park and to increase repeat visits, 'Pirate Bay', the latest addition to the 'Wet-O-Wild' water park was opened to our visitors on March 7, 2016. The newly commissioned family ride, situated on a pool of 10,000 sq-ft, instantly caught the attention of visitors of all ages. Despite the decrease in footfall the Profit Before Tax was Rs. 741.07 lakhs an increase of over 6.59% compared to 2014-2015, attributed to optimum utilization of available resources and better realization of per capita income. In conjunction to offering novelty to our visitors in the 'Silver Jubilee Year' of the operations of the Park and to counter the continuous drop of footfall and the increasing competition from our peers in the upcoming winter season the company intends to introduce novelties in form of a new thrill ride and upgradation/ theming of the food court area. Your company is expecting that all these novelty rides and attractions will help in stabilizing & increasing the overall footfall in your park in the ensuing years, in addition to better per capita income. Transfer to Reserve Your Directors have proposed to transfer an amount of Rs. 20 Lakhs (Rupees Twenty lakhs only) to the General Reserve of the company as against an amount of Rs. 20 lakhs transferred to the General Reserve of the company last year. The fund so transferred to the General Reserve is to be used by the company for its growth and expansion in the future. Dividends As the members are aware, the Board of Directors of the Company at its meeting held on February 6, 2016, had declared an 'Interim Dividend' @i5% (Rs. 0.15 on an Equity Share of par value of Rs. 1/- each) on the paid-up share capital of 4,68,00,000 equity shares amounting to Rs. 70.20 lakhs. Your Directors, in addition to the aforesaid 'Interim Dividend', recommended a 'Final Dividend' @ 15% per Equity share (Rs. 0.15 on an Equity share of par value of Rs. 1 each) on 4,68,00,000 equity shares amounting to Rs. 70.20 lakhs for the financial year ending 3i.03.20i6. The payment of aforesaid 'Final Dividend' is subject to the approval of the shareholders at the ensuing Annual General Meeting of the company. Consolidation of Financial Statements Pursuant to section i29(3) of the Companies Act, 20i3 the Consolidated Financial Statements have been prepared by the Company in accordance with the requirements of Accounting Standard 21 "Consolidated Financial Statements" issued by the Institute of Chartered Accountants of India. The audited Consolidated Statements together with Auditors' Report thereon form part of the Annual Report. A separate statement in the Form AOC-i, containing the salient features of the financial statements of Associate Companies prepared pursuant to Rule 5 of the Companies (Accounts) Rules, 2014, is appended as (Annexure - I) to this Directors' Report Board of Directors i. Composition of the Board As on 3ist March, 2016, the Board of Directors comprised ten members, of whom nine were Non-Executive and one Executive. Presently, there are four Independent Directors, who account for one-third of the total Board strength as required under section 149 of the Companies Act, 2013. The Non-Executive Directors are eminent professionals, drawn from amongst persons with experience in business and industry, finance, law and public enterprises. The composition of the Board is as under: The Nomination & Remuneration Committee held one meeting on i6th May, 2015 during the financial year ended 31st March, 2016. Mr. Rahul Mitra, AVP & Company Secretary acts as the Secretary to the Committee. The Committee also evaluated the performance of the Directors of the Company in compliance with section 178(2) of the Companies Act, 2013 at its meeting held on 18th May, 2016. COMPANY'S POLICY ON APPOINTMENT & REMUNERATION The remuneration policy is aimed at rewarding performance based on review of achievements on a regular basis. The remuneration policy is in consonance with the requirements of section 178 of the Companies Act, 2013 & Rules thereto and the existing industry practice. The remuneration of employees largely consists of basic remuneration and perquisites. The Non-executive Directors draw sitting fees at the rate of Rs. 9,000/- (Sitting fees was revised from Rs. 7,000/- to Rs. 9,000/- w.e.f 7th February, 2016) for attending each Meeting of the Board or Committee thereof and do not draw any other remuneration from the Company. The components of the total remuneration vary for different levels and are governed by Industry pattern, practice, qualification and experience of the employees and responsibilities handled by them. The objectives of the remuneration policy are to motivate and encourage the employees to deliver higher performance and to recognize their contribution. The company's policy on the appointment of the Directors & Senior Management and the remuneration for the Directors, Key Managerial Personnel and other employees can be referred to at the Website of the Company www.niccoparks.com Stakeholders Relationship Committee Composition of the Stakeholders Relationship Committee is in accordance with the requirements of section 178(5) of the Companies Act, 2013. The composition is as under:- • Mr. Rahul Mitra, AVP & Company Secretary, the designated Compliance officer of the Company in terms of Clause 6(1) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 acts as the Secretary to the Committee. • During the Financial Year 2015-2016, the Company had received 3 investor's Complaints, all of which were disposed off to the satisfaction of the complainants. As on 3ist March, 2016 there were no shares pending transfer and nil complaints pending to be resolved. • The committee held 15 meetings during the Financial Year 2015-2016. • The total sitting fees paid to the committee members for attending the committee meetings during the financial year ended 3ist March, 20i6 was Rs. 2,48,000. Mr. Abhijit Dutta being an Executive Director is not entitled to receive sitting fees for attending meetings of the Committee. d. corporate social responsibility committee: Pursuant to the requirements of Section i35 of the Companies Act, 20i3 read with Companies (Corporate Social Responsibility Policy) Rules, 2014, the Board ofDirectors ofthe Company constituted a Corporate Social Responsibility Committee at its meeting held on i6th May, 2015. * Sitting fees paid to the Nominee Director are drawn in the name of nominating institution. • The Corporate Social Responsibility Committee held one meeting on 6th February, 2016 during the financial year ended 31st March, 2016. • Mr. Rahul Mitra, AVP & Company Secretary acts as the Secretary to the Committee. • Your Company has adopted its Corporate Social Responsibility activities for the financial year ended 3ist March, 2016 pursuant to the provisions of section 135 of the Companies Act, 2013 read with Companies (Corporate Social Responsibility Policy) Rules, 2014. During the year under review your Company was obligated to make CSR expenditures amounting to T 10.02 lakhs, however, during this year the Company spent an amount of T 10.05 Lakhs towards its CSR obligations. The details of the CSR activities adopted by the Company are provided in the Annual Report on the CSR Activities which forms a part of this Board Report in annexure ii. • CSR Policy - Pursuant to section 135 of the Companies Act, 2013 read with the Companies (Corporate Social Responsibility Policy) Rules, 2014, the Company has formulated a Corporate Social Responsibility Policy for monitoring the CSR activities to be adopted by the Company towards its CSR obligations. The policy was approved by the Board of Directors of the Company at its meeting held on 6th February, 2016 and the CSR Committee was empowered to monitor and review the same. The policy may be referred to on the website of the Company (www. niccoparks.com). Director's Responsibility Statement Pursuant to clause (c) of sub-section (3) and sub-section (5) of section 134 of the Companies Act, 2013, your Directors state that (a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures; (b) they 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 and of the profit of the company for that period; (c) they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act 2013 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities; (d) they have prepared the annual accounts on a going concern basis; and (e) they have laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively. (f) they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively. Statutory Auditors, their Report and Notes to the Financial Statements Your Company's Statutory Auditors, Messrs Singhi & Co., Chartered Accountants, Kolkata, were re-appointed at the 26th Annual General Meeting held on ist August, 2015 and shall hold office until the conclusion of the 27th Annual General Meeting. Pursuant to section 139 of the Companies Act, 2013 read with Rule 6 of the Companies (Audit and Auditors) Rules, 2014, Messrs Singhi & Co., Chartered Accountants, being eligible are recommended for re-appointment at the 27th Annual General Meeting for a further period of three consecutive years till the conclusion of the 30th Annual General Meeting of the Company, subject to the ratification by the members at every Annual General Meeting and the authority be given to the Board to fix or revise their remuneration from time to time. The Company has received the consent/confirmation of Messrs Singhi & Co for their re-appointment as statutory auditors and a certificate from them to the effect that their re-appointment, if made, would be in accordance with all the relevant conditions prescribed under the Companies Act, 2013 and Companies (Audit & Auditors) Rules, 2014 and that they are not disqualified for re-appointment. The Standalone and Consolidated Auditor's Report does not contain any qualifications, reservation or adverse remark or disclaimer. Secretarial Audit Pursuant to Section 204 of the Companies Act, 2013, and the rules made there under, Mr. P.V. Subramanian (C.P. No.- 2077; ACS- 4585), Company Secretary in Whole-time Practice, was appointed as the Secretarial Auditor of the Company. The report of the Secretarial Auditor is enclosed as Annexure III. The report does not contain any qualifications, reservation or adverse remark or disclaimer. Related Party Transaction Your Company has no material individual transactions with its related parties which are covered under section i88 of the Companies Act, 2013, which were not in the ordinary course of business and not undertaken on an arm's length basis during the financial year 2015-16. Accordingly, no transactions are being reported in Form No. AOC-2 in terms of section 134 of the Companies Act, 20i3 read with rule 8 of the Companies (Accounts) Rules, 20i4. Transfer of Unpaid /Unclaimed amount to IEPF Pursuant to the provisions of Section i24(5) of the Companies Act, 20i3 (Section 205A of the erstwhile Companies Act, i956) the amount of dividend which remains unpaid or unclaimed for a period of seven years from the date of its transfer to unpaid/ unclaimed dividend account is required to be transferred by the Company to Investor Education and Protection Fund (IEPF), established by the Central Government under the provisions of the section 205C of the erstwhile Companies Act, i956 (Section i25 of the Companies Act, 20i3, is yet to be notified). During the year under review, an amount of T 2,04,889.20/- (Rupees Two lakhs four thousand eight hundred eighty nine and twenty paisa only) lying in the credit of the i4th Equity Dividend Account of the Company for the financial year 2007-2008 was transferred to IEPF within the due date. Risk Management & Mitigation In view of the nature of services provided by the Company, the Company had all along been conscious of the risks associated with the nature of its business. The Company has identified various risks faced by the Company from different areas. The Company already has a Risk Management Framework for laying down procedures to inform the Board members about the risk assessment and minimization procedures. The Board has adopted a risk management policy in consultation with various functional heads to identify, assess and mitigate the major areas of risk associated with the business of the Company. Appropriate structures are present so that risks are inherently monitored and controlled. Risk identification, risk assessment and risk treatment procedures for all functions of the Company are reviewed on an ongoing basis. The Audit Committee and the Board reviews the Risk Management Framework on regular basis. Declaration By Independent Directors Mr. Sunil Mitra, Mr. Anand Chatrath, Mr. Sujit Poddar and Mr. Tapan Chaki, Independent Directors of the Company have confirmed that they fulfill all the conditions of Independent Directorship as laid down in section 149 of the Companies Act, 20i3 and the rules made there under and the same have been noted by the Board. Internal Financial Controls Related to Financial Statements Your company has in place an established internal control system designed to ensure proper recording of financial and operational information and compliance of various internal control and other regulatory and statutory compliances. Internal Financial Control systems and procedures are commensurate with the company's size and nature of business. The objective of these procedures is to ensure efficient use and protection of the company's resources, accuracy in financial reporting and compliance of statutes and company procedures. The existing system ensures orderly and efficient conduct of its business including adherence to company's policies, safeguarding of its assets, prevention and detection of frauds and errors, accuracy and completeness of the accounting records, and timely preparation of reliable financial information. Your Company has in place adequate internal financial controls with reference to the Financial Statements. Such controls have been tested during the year and no reportable material weaknesses in design or operation was observed. The Internal Financial Control systems and procedures and their effectiveness are audited and reviewed on regular basis and monitored by the Audit Committee of the Board of Directors of the Company on a periodic basis. Investments Nandan Park Limited, Dhaka - Bangladesh During the calendar & financial year 2014 Nandan Park Limited, registered a net profit after tax of BDT 23.87 lakhs. In order to conserve funds their Directors did not recommend any Dividend for the calendar & financial year 20i4. Nicco Jubilee Park Limited - Jamshedpur The Net Profit after Tax for the year 2015-2016 was T 9.79 lakhs. Although the company continues to earn cash profit, yet the net worth of the Company remains negative due to huge accumulated losses, on account of arrear entertainment tax and penalty thereof, which remain an impediment to the growth of this company. Mr. Abhijit Dutta is also designated as the Managing Director of Nicco Jubilee Park Limited. Nicco Engineering Services Limited Nicco Engineering Services Limited (NESL) is engaged in the business of providing engineering services. The Company registered a profit after tax of T 288.34 Lakhs as on 3ist March, 20i6. Nicco Parks Leisure Projects Private Limited To support your company's future growth and expansion through acquisitions, participation in future joint venture projects for amusement parks and water parks, your company has floated this Special Purpose Vehicle (SPV). Your Company does not have any Subsidiary. Directors Re-Appointment Ms. Pallavi P. Kaul, Director (DIN: 00065449) & Mr. Rajive Kaul, Director (DIN: 00065554), retire by rotation at the forthcoming Annual General Meeting and are eligible for re-appointment. The particulars of Ms. Pallavi P. Kaul, Director & Mr. Rajive Kaul, Director, are mentioned in the Annexure - A to the Notice convening the 27th Annual General Meeting of the Company. Fixed Deposits Your Company has not accepted any deposits from the public. Extract of Annual Return Pursuant to section 92(3) of the Companies Act, 20i3 and Rule i2(i) of the Companies (Management and Administration) Rules, 2014, extract of the Annual Return in the Form MGT - 9 forms part of this report in Annexure - IV. Particulars of Loans, Guarantees or Investments Your Company has not given any loan or any guarantee or has not made any investments under section i86 of the Companies Issue of Shares / Buy Back / Employees Stock Option Scheme / Sweat Equity The Company has not bought back any of its shares, has not issued shares with differential voting rights, has not issued any Sweat Equity Share and has not provided any Stock Option Scheme to its employees, during the year under review. Statutory & Legal Matters There has been no significant and/or material order(s) passed by any regulators /Courts/Tribunals impacting the going concern status and the Company's operations in future. Material Changes & Commitments occurring after the end of Financial Year No material changes and/or commitments affecting the financial position of the Company occurred between the end of the financial year to which the attached financial statements relate to and up to the date of this report. Conservation of Energy & Technology Absorption Although the operations of the company are not energy intensive, the management is highly conscious of the criticality of the conservation of energy at all operational levels and also for utilizing alternate sources of energy. Your Company is adopting various steps for the conservation of energy by adhering to strict norms it has prepared in ISO 9001 and ISO 14001 manuals. Your company is committed to maintain an eco-friendly environment within the park. In order to conserve energy and reduce electricity consumption your Company implemented LED lighting systems in the entire park and same is expected to considerably reduce electricity consumption. Your Company is producing organic manure from the waste generated in the park and these are being used for its own horticulture and beautification of the park. Your Company does not have any Technology Agreement. Foreign Exchange Earnings and Outgo While there have been foreign visitors to the Park, no separate record is kept of earnings from them as they pay for the entry fees and other expenses in Indian Rupees. During the period under review the Company has received foreign exchange amounting to T 42.55 lakhs against supply of components. The total Foreign Exchange used during the financial year ended 3ist March, 2016 was T 23.94 Lakhs on account of overseas travelling, exhibition, business promotion, purchase of components & spares. Complaints Received by the Sexual Harassment Committee The Company has in place a policy in line with the requirements of The Sexual Harassment of Women at 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. There were nil complaints received during the year under review. Evaluation of Board's Performance In compliance with the Schedule IV of the Companies Act, 2013, a meeting of the Independent Directors of the Company was held to review and evaluate the performance of the Non-Independent Directors and the Chairperson of the Company taking into account the views of the Executive Directors and Non-Executive Directors; assessing the quality, quantity and timeliness of flow information between the Company management and the Board and also to review the overall performance of the Board. The meeting of the Independent Directors of the Company was held on 6th February, 2016, wherein the performance of the Non-Independent Directors including the Chairperson and of the Board as a whole was evaluated. The Nomination and Remuneration Committee also co-ordinates and oversees the annual self evaluation of the performance of the Board, Committees and individual Directors. Particulars of Employees & Related Disclosures Your Company has no employee of the category as specified in Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 20i4. Disclosure pertaining to remuneration and other details as required under section i97(i2) of the Companies Act, 20i3 read with Rules 5(i) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 20i4 are provided in Annexure - V. Management Discussion & Analysis Reports Pursuant to Regulation 34(3) read with Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Management Discussion and Analysis Report forms part of the Boards' Report in Annexure - VI. Corporate Governance Pursuant to Regulation 15(2) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 the company is exempted from complying with the requirements of Regulation 27(2) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 20i5. Hence, this report does not contain any disclosure under the relevant heads for the year under review. Key Management Team Your company has the following members as part of their key management team: Mr. Abhijit Dutta, Managing Director & CEO; Mr. Rajesh Raisinghani, VP - Operations, Marketing and F&B; Mr. Pankaj Kumar Roy, VP & CFO and Mr. Rahul Mitra, AVP & Company Secretary. Acknowledgement The Directors are thankful to the members and investors for their confidence and continued support. Your Board would like to thank the Management of the company and also thank the nominated Directors on the Board and the major Shareholders for their complete support in smooth operations of your Company. Your Board is very grateful to the Independent Directors for their valuable contributions. All of them despite other business exigencies have shared their rich experience and knowledge with the management to take your Company forward. The Directors would like to express their gratitude for the support from all its customers, suppliers, bankers and vendors. Your Directors acknowledge with gratitude the co-operation and assistance received from State Government departments and other agencies during the period under review, viz., West Bengal Industrial Development Corporation Limited, West Bengal Tourism Development Corporation Limited, HDFC Bank, AXIS Bank, Allahabad Bank, State Bank of India, Bandhan Bank, Small Industries Development Bank of India (SIDBI), Tourism Finance Corporation of India Limited (TFCI) and Bidhan Nagar Municipality. The Directors would also like to express their sincere thanks and appreciation to the invaluable contribution of the Senior Management Team for their leadership and to all the employees and staff for their commendable teamwork, contribution and professionalism and wish them all the best for achieving many new milestones in the future. Registered Office: 'Jheel Meel', Sector IV, Salt Lake City, Kolkata - 700 106 On behalf of the Board of Directors NICCO PARKS & RESORTS LIMITED A. R. Bardhan Abhijit Dutta Chairman Managing Director & CEO Date: May i8, 20i6 |