Report of the Board of Directors to Members Your Directors are pleased to present their Thirty-Second Annual Report and Audited Statement of Accounts for the year ended March 31, 2015. II. PERFORMANCE Standalone Operating Performance During the financial year 2014-15, the Company despite the prevailing uncertainties could restrict its loss after tax to Rs. 13.02 lakhs (last year profit of Rs.21.16 lakhs). The Company is an operating-cum-investment company engaged primarily in the business of promotion and operation of Quick Service Restaurants (QSRs) through its subsidiary, which is a Development Licensee/ Master Franchisee of McDonald's and operates QSRs under the brand name McDonald's. Consolidated financial statements of the Company and its subsidiary prepared in accordance with applicable accounting standards and duly audited by the Company's statutory auditors are annexed. Subsidiary's Operating Performance Hardcastle Restaurants Pvt. Ltd, a wholly owned subsidiary of the Company, has during the financial year 2014-15, recorded a loss of Rs.289.80 million as against a profit of Rs. 7.42 million last year. Dividend Considering the present financial position as on 31st March, 2015, no dividend is being recommended. State of the Company's affairs Your Company had carried out trading activities during the year. It has promoted the operations of QSRs through its subsidiary as aforesaid. The Company endeavours to continuously improve its performance. Transfer to Reserves No funds are being transferred to reserves. Material changes and commitments No material changes and commitments affecting the financial position of your Company have occurred between 31st March, 2015 and the date of this Report. Particulars of loans, guarantees or investments Particulars of loans given, investments made or guarantees given or security provided and the purpose for which the loans or guarantees or security was to be utilised by the recipients of the loans or guarantees or security are provided in Note No. 29 to the Standalone Financial Statements. III DIRECTORS AND MANAGEMENT Reappointment of Director Pursuant to provisions of Section 152 of the Companies Act, 2013, Mr Banwari Lal Jatia is liable to retire by rotation at the ensuing Annual General Meeting, but being eligible, offers himself for re-appointment. The Board recommends his re-appointment. During the year, Mr Tarun Kataria, Independent Director and Mr Achal Jatia, Non-Executive Director were appointed with effect from 1st August, 2014. Number of meetings of the Board Four meetings of the Board of Directors were held during the financial year. For further details, please refer to the Report on Corporate Governance which forms a part of this Annual Report. Declaration by Independent Directors The Company has received declarations from all Independent Directors confirming that they fulfill the criteria of independence as prescribed under subsection (6) of Section 149 of the Companies Act, 2013 and under Clause 49 of the Listing Agreement with the Stock Exchange, BSE Ltd. Directors' Responsibility Statement As required under Section 134 (3) (c) and pursuant to Section 134 (5) of the Companies Act, 2013, your Directors state that: (a) in the preparation of the annual accounts for financial year ended 31st March, 2015, the applicable accounting standards have been followed and there are no material departures in adoption of these standards; (b) the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at 31st March, 2015 and of the loss of the Company for the year ended on that date; (c) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; (d) the Directors have prepared the annual accounts for financial year ended 31st March, 2015 on a 'going concern' basis; (e) the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and have been operating efficiently; and (f) the Directors have devised proper systems to ensure compliance with provisions of all applicable laws and such systems were adequate and operating effectively. Board Evaluation Pursuant to provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has carried out an annual evaluation of its own performance and that of its Committees. Feedback was sought by way of a structured questionnaire covering various aspects of the Board's functioning such as adequacy of the composition of the Board and its Committees, Board culture, execution and performance of specific duties, obligations and governance and the evaluation was carried out based on responses received from the Directors. A separate exercise was carried out by the Nomination and Remuneration Committee of the Board to evaluate the performance of individual Directors. The performance evaluation of the Non-Independent Directors and the Board as a whole was carried out by the Independent Directors. The performance evaluation of the Chairman of the Company was also carried out by the Independent Directors, taking into account the views of the Executive Director and Non-Executive Directors. The Directors expressed their satisfaction with the evaluation process. Audit Committee In accordance with Clause 49 of the Listing Agreement read with Section 177 of the Companies Act, 2013, the Company had constituted an Audit Committee, which consists of three independent non-executive directors namely; (1) Mr P.R. Barpande (Chairman), (2) Mr Dilip J. Thakkar (member), (3) Mr Manish Chokhani (member) and one other director, Mr Amit Jatia (member). The Audit Committee functions in terms of the role and powers delegated by the Board of Directors keeping in view the provisions of Clause 49 of the Listing Agreement and Section 177 of the Companies Act, 2013 and the Rules made thereunder, being the Companies (Meetings of Board and its Powers) Rules, 2014. Vigil Mechanism and Whistleblower Policy Vigil Mechanism as envisaged in the Companies Act, 2013, the Rules prescribed thereunder and the Listing Agreement is implemented through the Company's Vigil & Whistleblower Policy to enable the Directors and employees of the Company to report genuine concerns, to provide for adequate safeguards against victimisation of persons who use such mechanism and make provision for direct access to the Chairman of the Audit Committee. The Vigil & Whistleblower Policy of the Company is available on the Company's website at the web-link: http://www.westlife.co.in/web/compliance.aspx . Auditors Statutory Auditors and Auditors' Report S R B C & CO LLP, Chartered Accountants (ICAI Registration No. 324982E) were appointed as the Statutory Auditors of the Company to hold office from the conclusion of the 31st Annual General Meeting (AGM) held on 26th September, 2014 until the conclusion of 36th AGM of the Company (subject to ratification of their appointment by Members at every AGM held after the AGM held on 26th September,2014). As required under provisions of Section 139(1) of the Companies Act, 2013, the Company has received a written consent from S R B C & CO LLP, Chartered Accountants to their appointment and a certificate, to the effect that their appointment, if made, would be in accordance with the Companies Act, 2013 and the Rules framed thereunder and that they satisfy the criteria provided in Section 141 of the Companies Act, 2013. Members are requested to ratify the appointment of the Statutory Auditors as mentioned in the Notice. The Auditors' Report does not contain any qualification, reservation or adverse remark. Secretarial Audit and Report of Company Secretary in Practice Pursuant to provisions of Section 204 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed Mr Shailesh Kachalia, Practicing Company Secretary (Certificate of Practice Number: 3888) to carry out Secretarial Audit of the Company. In terms of provisions of sub-section 1 of Section 204 of the Companies Act, 2013, a Secretarial Audit Report given by a company secretary in practice is annexed to this Report as Annexure I. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark. Key Managerial Personnel (KMP) Pursuant to provisions of Section 203 of the Companies Act, 2013, during the year, Mr Amit Jatia and Mr Suresh Lakshminarayanan were appointed as Chief Executive Officer (CEO) and Chief Financial Officer (CFO) respectively. Contracts or Arrangements with Related Parties There were no Related Party Transactions entered into during the year by your Company and accordingly, no disclosure of Related Party Transactions under Section 134(3) (h) of the Companies Act, 2013, in Form AOC - 2 is required. Disclosures on Employee Stock Option Scheme The Securities and Exchange Board of India (SEBI) had repealed the SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999, replacing the same with a set of new regulations, being the SEBI (Share Based Employee Benefits) Regulations, 2014 ('the Regulations'). In view of the above, the Company had amended its existing employee stock option scheme, being the Westlife Development Limited Employees Stock Option Scheme 2013, ('the Scheme') in order to comply with the Regulations. In compliance with the Regulation 14 of the Regulations read with SEBI Circular no. CIR/CFD/POLICY CELL/2/2015 dated 16th June, 2015, your Board of Directors report that during the year under review, no material changes in the Scheme had taken place and that the Scheme is in compliance with the Regulations. Further, the details mentioned in the above Regulationhave been disclosed on the Company's website at web link: http://www.westlife.co.in/web/compliance.aspx. Policy for qualifications, positive attributes and independence criteria for Directors and remuneration for Directors, Key Managerial Personnel and other employees In accordance with provisions of Section 134(3) (e); sub section (3) and (4) of Section 178 of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Company has formulated a Policy (appended as Annexure II which forms a part of this Report). Corporate Social Responsibility The provisions of Section 135 of the Companies Act, 2013 as to Corporate Social Responsibility are not applicable to your Company. Disclosure pursuant to Rule 5 of the Companies (Appointment and Remuneration) Rules, 2014 In accordance with the Rule 5 of the Companies (Appointment and Remuneration) Rules, 2014, the following disclosures are made: The ratio of the remuneration of each director to the median remuneration of the employees of the Company for the financial year: N.A.* the percentage increase in remuneration of each director, Chief Financial Officer, Chief Executive Officer, Company Secretary or Manager, if any, in the financial year: N.A.* • the percentage increase in the median remuneration of employees in the financial year: N.A.* the number of permanent employees on the rolls of Company: Three • the explanation on the relationship between average increase in remuneration and Company performance: N.A.* • comparison of the remuneration of the Key Managerial Personnel against the performance of the Company: N.A.* • variations in market capitalisation of the Company, price earnings ratio as at the closing dates of the current financial year and the previous financial year: • average percentile increase already made in the salaries of employees other than the managerial personnel in the last 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: N.A.* • comparison of the each remuneration of the Key Managerial Personnel against the performance of the Company: N.A.* • the key parameters for any variable component of remuneration availed by the directors: N.A.* • the ratio of the remuneration of the highest paid director to that of the employees who are not directors but receive remuneration in excess of the highest paid director during the year: N.A.* ; and • the terms of remuneration are in line with the Remuneration Policy of the Company. * Directors did not receive any remuneration from the Company during the year, except sitting fee for attending meetings of the Board and its Committees, and no remuneration is being paid to employees or Key Managerial Personnel of the Company. Internal Control Systems The Company has a proper and adequate internal audit and control system commensurate with its size and the nature of its business. No instance of any fraud or misdemeanour has been noticed during the year. Significant and material orders There are no significant and material orders passed by any regulators or court or tribunals impacting the going concern status and future operations of the Company. Public Deposits The Company did not accept any deposits during the year. Corporate Governance Report on Corporate Governance of the Company for the year under review, as per the requirement of Clause 49 of the Listing Agreement, has been given under a separate section and forms part of this Annual Report. Management Discussion and Analysis A detailed review of operations, performance and future outlook of the Company and its business, as stipulated under Clause 49 of the Listing Agreement, is also presented in a separate section forming part of this Annual Report under the heading 'Management Discussion and Analysis'. Extracts of Annual Return In accordance with sub-section 3(a) of Section 134 and sub-section (3) of Section 92 of the Companies Act, 2013, read with Rule 12 of the Companies (Management and Administration) Rules, 2014, an extract of the annual return as at 31st March, 2015 forms part of this Report and is appended hereto as Annexure III. Conservation of Energy, Technology Absorption, and Foreign Exchange Earnings and Outgo Particulars in respect of conservation of energy, technology absorption and foreign exchange earnings and outgo, as required under sub-section (3) (m) of Section 134 of the Companies Act, 2013 read with Rule (8)(3) of the Companies (Accounts) Rules, 2014 are given as under: A. Conservation of Energy i) The steps taken or impact on conservation of energy: The operations of your Company are not energy intensive. ii) The steps taken by the Company for utilizing alternate sources of energy: NIL iii) The capital investment on energy conservation equipments: NIL B. Technology Absorption i) The efforts made towards technology absorption: NIL ii) The benefits derived like product improvement, cost reduction, product development or import substitution: NIL iii) in case of imported technology (imported during the last three years reckoned from the beginning of the Financial Year): NIL (a) Details of Technology Imported; (b) Year of Import; (c) Whether the Technology has been fully absorbed; (d) if not fully absorbed, areas where absorption has not taken place, and the reasons thereof. iv) Your Company has not incurred any expenditure on Research and Development during the year under review. C. Foreign Exchange Earnings and Outgo There were no foreign exchange inflow; outflow or earnings. Risk Management Your Company has a well-defined risk management framework in place. The risk management framework works at various levels across the Company. Your Company has constituted a Risk Management Committee of the Board which is authorised to monitor and review the Risk Management Plan. The Risk Management Plan provides a detailed programme for risk prevention, risk mitigation and risk management and the operation/working thereof, along with reporting of any new risks. The Risk Management Plan has been established across the organisation and is designed to prevent, mitigate and manage risks that affect the Company. IV. ACKNOWLEDGEMENT Your Directors wish to express their gratitude and record sincere appreciation for the dedicated efforts of all employees of the Company. The Board is thankful to esteemed shareholders for their continued support and for the confidence reposed in the Company. The Board takes this opportunity to express its gratitude for the valuable assistance and co-operation extended by all stakeholders including government authorities, customers, banks, vendors, advisors, and other business associates. For and on behalf of the Board of Directors Sd/- Amit Jatia Director DIN:00016871 Sd/- Smita Jatia Director DIN: 03165703 Place: Mumbai Date: 7th August, 2015 |