Arambhan Hospitality Services Ltd Directors Report.

To

The Members,

Arambhan Hospitality Services Limited

We are presenting the report on our business and operations for the year ended March 31, 2019.

FINANCIAL PERFORMANCE

A summary of your Companys financial performance is given below:

(Rs. in 000)
Particulars For the F.Y. ended March 31, 2019 For the F.Y. ended March 31, 2018
Audited Audited
INCOME
Revenue from Operations 70,172.01 93,980.07
Other Income 821.41 987.36
Total Income 70,993.42 94,967.43
EXPENDITURE
Raw Materials consumed 79,832.99 69,403.24
Employee Benefit Expenses 20,187.99 24,731.45
Other Expenses 1,91,834.57 48,957.72
Total Expenditure 2,91,855.55 143,092.41
Profit/Loss before Interest & Depreciation (2,20,862.13) (48,124.98)
Finance costs 20,221.72 17,716.83
Depreciation and amortization expense 1744.704 2,477.11
Profit/Loss before exceptional and extraordinary items and Tax (2,42,828.55) (68,318.92)
Exceptional and Extraordinary items 0.00 39,834.32
Profit/Loss before Tax (2,42,828.55) (108,153.24)
Tax - Current Tax/Deferred Tax 0.00 2706.76
Profit/Loss after Tax (2,42,828.55) (110860.00)
Basic/Diluted Earnings per equity share (48.57) (18.77)

FINANCIAL HIGHLIGHTS

During the year 2018-2019 the total revenue of our company decreased to 70,172.01/- (Rs. 000) as against INR 93,980.07 / - (Rs. 000) in the year 2017-18, representing a decrease in approximately 25.33% of the revenue from the operations.

MATERIAL CHANGES AND COMMITMENT AFFECTING THE FINANCIAL POSITION OF THE COMPANY

There are no material changes and commitments, affecting the financial position of the Company which has occurred between the end of the financial year of the Company i.e. March 2019 and the date of Directors Report.

STATE OF AFFAIRS OF THE COMPANY

The operating performance of your Company has been covered in the Management Discussion and Analysis Report which forms part of this Annual Report.

MANAGEMENT DISCUSSION AND ANALYSIS

The Management Discussion and Analysis Report for the year under review as stipulated under Listing Regulations forms part of this Annual Report in Annexure VI.

CHANGE IN THE NATURE OF BUSINESS

There has been no change in the nature of business of the Company during the year under review.

RESERVES

During the year 2018-2019 the total Reserves & Surplus of our company decreased to INR (313218.65) (Rs. In 000) as against INR (70,390.10) (Rs. In 000) in the year 2017-18.

DIVIDEND

In absence of adequate resources, the Company do not recommend Dividend on Equity shares for the financial year under review.

DETAILS OF SUBSIDIARY COMPANY

CBCS International Limited was incorporated by the Company in Financial Year 2015 - 16 with a view to exploring various possibilities to expand into the Catering, Housekeeping, Facilities Management and Restaurant space including Offshore and Remote sites in the Middle-east. During the Previous year FY 2017-18 the process of winding up of the subsidiary company initiated.

CHANGES IN SHARE CAPITAL

During the year under review, the paid-up Share Capital of the Company was INR 5,00,00,000/- comprising of 50,00,000 Equity Shares of the Company of INR 10/- each. Hence, there being no change in the Share Capital of the Company for the Financial Year 2018-19.

HUMAN RESOURCE DEVELOPMENT & TRAINING

As the Companys mission statement states, we believe in creating invaluable relationship with all our Stakeholders viz; Suppliers, Customers, Lenders, Shareholders and Employees. Human Resources continue to be the most valuable assets for your Company. The Companys recruitment strategy ensured that employee addition was clearly aligned to business demand and their eligibility. Your Company strives to help its employees grow professionally and to give them opportunities to accomplish their career goals. Also, constant efforts are in place towards creating and maintaining an enthusiastic work culture to give an equal opportunity to demonstrate their potential towards achieving the corporate goals and objectives.

PARTICULARS OF EMPLOYEES

There were no employee employed throughout the financial year who was in receipt of remuneration of INR 1.02 crore or more, or employed for part of the year and in receipt of INR 8.5 lakh or more a month, as mentioned under Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

BOARD OF DIRECTORS AND COMPANY SECRETARY

The Board of Directors of the Company is not duly constituted with proper balance of Executive Directors and Independent Directors. The Company is required to appoint 2 Independent Directors in terms of provisions of Companies Act, 2013 due to change in composition of Directors. The Company is in the process of search of suitable candidates for the post of Independent Director. Further, inspite of many efforts by the management, vacancy caused in office of Company secretary of your company could not be filled up and management is looking for suitable candidate for the post. The Company will soon appoint the Independent Directors/Company Secretary to meet the requirements.

MEETINGS OF THE BAORD

Your Directors report that the regular meetings of the Board are held to discuss and decide on various business policies, strategies and other businesses. The Board met 5 (Five) times during the financial year 2018-19

a. May 12, 2018

b. June 26, 2018

c. September 05, 2018

d. November 14, 2018

e. February 02, 2019

Number of meeting attended by each Director:

Sr. No. Name of Directors Number of Meetings held Board meeting attended
1. Alfred Micheal Arambhan 05 05
2. Nalini Maria Arambhan 05 05
3. Pooja Alfred Arambhan 05 05
4. Abhijit Pradhan 05 05
5. Lekh Raj Assanand Sardana 05 05

MEETINGS OF THE COMMITTEE

i. Audit Committee #

The Audit Committee comprises Mr. Abhijit Pradhan (Chairman), Mr. Lekh Raj Assanand Sardana and Mr. Alfred Micheal Arambhan as Members. All the recommendations made by the Audit Committee were accepted by the Board.

The Audit Committee met twice during the financial year under review. The meetings of the Committee were held on June 26, 2018 and November 14, 2018.

The attendance of each Director at the said Committee Meetings is given below:

Name of the Directors No. of Committee Meetings Held No. of Committee Meetings attended
Mr. Abhijit Pradhan (Chairman), 2 2
Mr. Lekh Raj Assanand Sardana 2 2
Mr. Alfred Micheal Arambhan 2 2

ii. Nomination and Remuneration Committee #

The Nomination and Remuneration Committee comprises Mr. Abhijit Pradhan (Chairman), Mr. LekhRaj Assanand Sardana as Members.

The Nomination and Remuneration Committee met twice during the financial year under review. The meetings of the Committee were held on June 26, 2018 and November 14, 2018.

The attendance of each Director at the said Committee Meetings is given below:

Name of the Directors No. of Committee Meetings Held No. of Committee Meetings attended
Mr. Abhijit Pradhan (Chairman), 2 2
Mr. LekhRaj Assanand Sardana 2 1

There is requirement of appointment of 1 (One) Non Executive Independent Director in order to have a proper Board composition as per Regulation 17 of SEBI (LODR), Regulations, 2015 and also to comply with the provisions of Section 178 of Companies Act, 2013 and Regulation 19 of SEBI (LODR) Regulations, 2015 in terms of composition of Nomination & Remuneration Committee.

iii. Stakeholders Relationship Committee

The Stakeholders Relationship Committee comprises Mr. Abhijit Pradhan (Chairman), Mr. Alfred Micheal Arambhan and Ms. Pooja Alfred Arambhan as Members. During the financial year 2018-19, no meeting of the Stakeholders Relationship Committee was held.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND EXPENDITURE

Since your Company does not own any manufacturing facility, the particulars relating to conservation of energy and technology absorption stipulated in the Section 134(3)(m) of the Companies Act, 2013, the Companies (Accounts) Rules, 2014 are not applicable. The details of foreign exchange earnings and expenditure of your Company appear in the Notes to Accounts.

EXTRACT OF ANNUAL RETURN

Pursuant to 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 the extracts of the Annual Return as at March 31, 2019 forms part of this report as Annexure I.

FIXED DEPOSITS

The Company has not accepted fixed deposits from public within the purview of Section 74 of the Companies Act, 2013 during the year.

CONTRACTS OR ARRANGEMENTS WITH THE RELATED PARTIES

In terms of the provisions of the Companies Act, 2013 and as per Regulation 23 of SEBI (LODR) Regulations, 2015, your Company has put in place a Board approved Related Party Transaction Policy for the purpose of proper approval and reporting of transactions with related parties. During the year under review, your Company had not entered into any Related Party Transactions covered within the purview of Section 188(1) of the Companies Act, 2013, accordingly, requirement of disclosure of Related Party Transactions in terms of Section 134(3)(h) of the Companies Act, 2013 in Form AOC - 2 is not applicable to the Company. All other transactions with related parties were in compliance with the Related Party Transaction Policy of the Company and the Company had during the year under review, not entered into transactions with related parties which could be considered to be material in accordance with the Related Party Transaction Policy of the Company.

VIGIL MECHANISM

In terms of requirements of Section 177 of the Companies Act, 2013 read with Rules made thereunder, the Company has formulated a codified Whistle Blower Policy / Vigil Mechanism in order to encourage anyone connected with the Company, to come forward and express in good faith, genuine concerns about unethical and improper practices or any other wrongful conduct in the Company, without fear of punishment, victimization or unfair treatment.

The Vigil Mechanism provides a channel to report to the management concerns about unethical behavior, actual or suspected fraud or violation of various codes or policies of the Company and provides adequate safeguards against victimization of persons who use such mechanism. The Mechanism provides for direct access to the Chairman of the Audit Committee in appropriate or exceptional cases. The Whistle Blower Policy / Vigil Mechanism is available on the website of the Company.

DETAILS OF DIRECTORS AND KEY MANAGERIAL PERSONNEL

Pursuant to the provisions of Section 152 of the Companies Act, 2013, Mrs. Pooja Alfred Arambhan (DIN: 02540168), who retires by rotation and being eligible, offers herself for re- appointment;

DECLARATION BY INDEPENDENT DIRECTOR

The Company has received necessary declaration from each Independent Directors under Section 149(7) of the Act that he meets the criteria of independence laid down in Section 149(6) of the Companies Act, 2013 and Listing Regulations.

INDEPENDENT DIRECTORS MEETING

The Independent Directors met on March 27, 2019, without the attendance of Non- Independent Directors and members of the Management. The Independent Directors, inter alia, reviewed the performance of Non-Independent Directors and the Board as a whole; the performance of the Chairman of the Company and assessed the quality, quantity and timeliness of flow of information between the Company Management and the Board that is necessary for the Board to effectively and reasonably perform their duties.

PERFORMANCE EVALUATION

In terms of the provisions of the Companies Act, 2013, the Board adopted a formal mechanism for evaluating its performance and as well as that of its Committees and individual Directors. In order to assist the Board to carry out such evaluation process the Board has adopted a Board Performance Evaluation Policy which defines the process to be followed for performance evaluation of the Board, its Committees and individual Directors. In order to prescribe detailed criteria, manner and process for evaluation of performance of the Board, its Committees and Directors, the Nomination and Remuneration Committee of the Board formulated and adopted the Performance Evaluation Process - Board, Committees and Directors, which forms an integral part of the Board Performance Evaluation Policy.

The manner in which formal annual evaluation of the Board, its Committees and individual Directors is conducted includes:

• The Independent Directors, at their separate Meeting, review the performance of Non-Independent Directors and the Board as a whole.

• The Nomination and Remuneration Committee evaluates the performance of the Directors on the Board. A feedback on the overall evaluation conducted by the Nomination and Remuneration Committee is communicated to the Board.

• Then, in light of the criteria prescribed in the Board Performance Evaluation Policy, the Board analyses its own performance, that of its Committees and each Director during the year and suggests changes or improvements, if required.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to Section 134(5) of the Companies Act, 2013 the Board of Directors of the Company confirms that-

1. In preparation of the Annual Accounts, the applicable accounting standards have been followed along with proper explanations;

2. The Directors had selected such Accounting Policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company as at 31st March, 2019 and of the profit or loss of the company for that period;

3. The Directors had 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;

4. The Directors had prepared the Annual Accounts on a going concern basis;

5. 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;

6. The Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

AUDITORS

Statutory Auditors:

Board propose name of M/s R K Jagetiya & Co, Chartered Accountants (Firm Registration No. 146264W), as the Statutory Auditors of your Company at the Annual General Meeting of the Company to be held on 30th September 2019 to hold office, from the conclusion of the said Annual General Meeting till the conclusion of the 15th Annual General Meeting of the Company, subject to ratification by Members at every Annual General Meeting. In terms of the requirements of Section 139 of the Companies Act, 2013, the appointment of the Statutory Auditors of the Company is required to be ratified by the Members at every Annual General Meeting of the Company.

Outgoing Auditor M/s PSD & Assocaites., Chartered Accountants (Firm Registration No. 108726W), Statutory Auditors in their report(s) on the Annual Audited Standalone Financial Statements of your Company for the Financial Year ended March 31, 2019, have not submitted any qualifications, reservations or adverse remarks or disclaimers except mentioned in table given below along with management reply on the same. Further During the year under review, the Statutory Auditors have not reported any incident of fraud to the Audit Committee. Members are requested to refer the Independent Auditors Report annexed herewith for more details.

Auditors Observation Management Reply
Company has not filed GST return since June 2018 onwards due to working capital paucity. Management is discussing the matter with its PSU customer for release of GST withheld amount directly to Govt., so the liability can be discharged and GST return could be filed.
Further Auditors has emphasized on following matters in their report without qualifying the main Audit Report
One of the customers of the Company, M/s GOL Offshore Limited previously known as Great Offshore Ltd having total outstanding of Rs. 456.92 Lacs as per company books and subject to reconciliation with the party. The GOL Offshore limited is presently in liquidation process. Therefore any possible impact thereof cannot be ascertained presently and accordingly impact if any on financial position of the Company could not be quantified. Management is considering other legal means to recover the amount, as the customer has even defaulted in meeting the consent terms decided and conveyed by the Bombay High Court.
The Company has failed and unable to appoint Company Secretary as per Section 203 of Companies Act, 2013 and Regulation 6 of Listing obligation and Disclosure Requirements, 2015. Management is trying their best to appoint the company secretary, but till now no candidate has shown interest looking to the financial condition of the Company.

SECRETARIAL AUDITOR

Pursuant to Section 204 of the Companies Act 2013, the Board has appointed M/s. M. K. Sarswat & Associates Practising Company Secretaries as its Secretarial Auditors to conduct the Secretarial Audit of the Company for the financial year 2018-19.

The Secretarial Audit Report for the financial year ended March 31, 2019, does not contain any qualification, reservation and adverse remark and is annexed to this report as Annexure VII except Auditors Qualification which is mentioned above along with Management comments.

ADEQUACY OF INTERNAL FINANCIAL CONTROL WITH REFERENCE TO THE FINANCIAL STATEMENTS

The Company has in place adequate internal financial controls with reference to financial statements. During the year, no reportable material weakness in the design or operation was observed in the internal financial controls.

MANAGERIAL REMUNERATION

Disclosures of the ratio of the remuneration of each director to the median employees remuneration and other details as 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 is annexed to this Report as Annexure V.

None of the Directors of the Company are in receipt of any commission from the Company.

The details of remuneration paid to the Directors of the Company are given in Annexure 1 to this Report.

SIGNIFICANT & MATERIALS ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNAL

There are no significant material orders passed by the regulators or courts or tribunals which would impact companys operations in future, except mentioned as below.

1. Service tax Department notice and Proceedings under Section 87 of the Finance Act, 1994.

On 22nd June, 2018, Department initiated recovery proceedings as above for outstanding dues as per their records and frozen our operative Bank accounts, and started recovery of money from our customers to realize the outstanding statutory dues. Management has extended full cooperation to the department and we are thankful to department and authorities for their help in realization of our dues and appropriating towards outstanding statutory liabilities towards service tax. The Service Tax outstanding has been discharged by the Company in full. Management is considering Sabka Vishwas Legacy Disputes resolution scheme to nullify the Interest liability on the same.

2. VAT Appeal.-

In March 2018, Department of State Sales Tax, Maharaashtra, has issued an assessment order and raised demand of Rs. 1405.65 Lakhs in for financial year 2013-14 including of interest and penalties. Management has already filed appeal after depositing 10% of Tax Amount demand i.e. 68,83,000/- (deposit under Protest). The matter is still pending with the Authorities and looking to the amount involved it might impact the operation of company to a larger extent. Management is hopeful of getting favorable reply and accordingly demand will be set aside.

RISK MANAGEMENT POLICY

Pursuant to the requirement of Section 134 of the Companies Act, 2013, the Company has already in place a Risk Management Policy. The Company has a robust Risk Management framework to identify and evaluate business risks and opportunities. The framework seeks to create transparency, minimise adverse impact on the business objectives and enhance the Companys competitive advantage.

NOMINATION AND REMUNERATION POLICY

The Nomination and Remuneration Policy recommended by the Nomination and Remuneration Committee is duly approved by the Board of Directors of the Company and is annexed to this Report as Annexure IV.

The Company for the year under review has not paid any remuneration by way of commission and sitting fees to Non- Executive Directors.

DISCLOSURES UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION & REDRESSAL) ACT, 2013

In terms of the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013, your Directors have constituted an Internal Complaints Committee and adopted a Care and Dignity Policy.

During the year under review, no complaints related to sexual harassment had been received by the Internal Complaints Committee.

ACKNOWLEDGEMENTS

Your Directors place on record their gratitude for the continuing support of clients, Charterers, stakeholders, Shareholders, Investors, bankers, consultants and advisors various Government authorities & departments, Port trust authorities and Business allies & associates for their continuous support and co-operation at all levels.

The Board further places on record its appreciation for the dedicated services rendered by the employees of the Company.

Date: 14th September, 2019 On Behalf of Board of Directors
Place: Mumbai Sd/-
Alfred Micheal Arambhan
Chairman & Managing Director