benares hotels ltd share price Directors report

COMPANYS OPERATIONS AND PERFORMANCE

The Total Income for the year ended 31st March, 2023 stood at Rs. 9,483 lakhs as compared to Rs. 4,994 Lakhs in previous year and the Gross Operating Profit (EBIDTA) stood at Rs. 3,766 Lakhs as compared to Rs. 1,472 Lakhs in previous year.

The profit before Tax for the year was at Rs. 3,128 Lakhs as compared to profit before tax of Rs. 771 lakhs for the previous year. The profit after Tax for the year was at Rs. 2,338 lakhs as compared to profit after Tax of Rs. 565 lakhs for the previous year.

DIVIDEND

Based on the performance of the Company and keeping in view of the increase in the revenue of the Company, the Board recommended a dividend @ 200 % i.e. Rs. 20 per fully paid Equity share on 13,00,000 Equity shares of face value Rs. 10 each, for the year ended March 31, 2023 (Previous year Rs. 10 per equity share).

The dividend on Equity Shares is subject to the approval of the Shareholders at the Annual General Meeting (AGM) scheduled to be held on Thursday, August 24, 2023. The dividend once approved by the Shareholders will be paid on and after Monday, September 4, 2023.

The dividend on Equity Shares if approved by the Members, would involve a cash outflow of Rs. 260 lakhs resulting in a dividend pay-out of 11% of the profits of the Company.

HOLDING AND SUBSIDIARY COMPANIES

The Indian Hotels Company Limited (IHCL) is the ultimate Holding Company of BHL. The Company does not have any subsidiary company.

DIRECTORS

In accordance with the requirements of the Companies Act, 2013 (the Act) and the Companys Articles of Association, Dr. Anant Narain Singh (DIN: 00114728) retires by rotation and being eligible, offers himself for re-appointment. A resolution seeking Shareholders approval for his re-appointment forms part of the Notice.

During the year under review, Mr. Puneet Chhatwal (DIN: 07624616) has resigned from the Directorship of the Company w.e.f. February 2, 2023. The Board places on record its appreciation for his invaluable contribution and guidance provided to the Company during his tenure.

Based on the recommendations of the Nomination and Remuneration Committee (NRC) and in accordance with the provisions of the Act and the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (SEBI Listing Regulations), Mr. Beejal Desai (DIN: 03611725) was appointed as an Additional Director with effect from February 8, 2023 subject to the approval of the Members. The members of the Company have approved his appointment vide Postal Ballot, w.e.f. March 23, 2023. In the opinion of the Board, Mr. Desai is a person of integrity and possesses the requisite qualifications, experience and expertise required for discharging his duties as a Director of the Company.

The Board of Directors approved the proposal to re-appoint, Mr. Puneet Raman (DIN: 00341221) as an Independent Director, based on the recommendation of Nomination and Remuneration Committee (NRC), for a further period of five (5) years upon the expiry of his current term on September 16, 2023, subject to the Members approval, by way of Special Resolution as required under the provisions of the Companies Act, 2013.

The approval of the shareholders for the re-appointment of Directors including Independent Directors has been sought in the Notice convening the AGM of your Company.

In terms of Section 149 of the Act and Regulation 16(1) of the SEBI Listing Regulations, Mrs. Rukmani Devi, Mr. Moiz Miyajiwala and Mr. Puneet Raman are the Independent Directors of the Company as on March 31, 2023.

In terms of Regulation 25(8) of SEBI Listing Regulations, the Independent Directors 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 judgement and without any external influence. Based upon the declarations received from the independent Directors, the Board of Directors has confirmed that they meet the criteria of Independence as mentioned under Section 149(6) of the Act and Regulation 16(1)(b) of SEBI Listing Regulations and that they are Independent of the Management. In the opinion of the Board, there has been no change in the circumstances affecting their status as Independent Directors of the Company and the Board is satisfied of the integrity, expertise, and experience (including proficiency in terms of Section 150(1) of the Act and applicable rules thereunder) of all Independent Directors on the Board. Further in terms of Section 150 read with Rule 6 of the Companies (Appointment & Qualification of Directors) Rules, 2014, as amended, the Independent Directors of the Company have registered their names in the data bank of Independent Directors maintained with the Indian Institute of Corporate Affairs.

During the year under review, the Non – Executive Directors of the Company had no pecuniary relationship or transactions with the Company, other than Directors Commission, sitting fees and reimbursement of expenses, if any, incurred by them for the purpose of attending meetings of the Board/Committee and General Meeting of the Company.

KEY MANAGERIAL PERSONNEL

In terms of Section 203 of the Act, your Company has Mr. Vivek Sharma as the Chief Executive Officer (CEO), Mr. Harish Kumar as the Chief Financial Officer (CFO) and Ms. Vanika Mahajan as the Company Secretary of the Company, as the Key Managerial Personnel of the Company, as on March 31, 2023.

Mr. Vivek Sharma has resigned as the Chief Executive Officer (CEO) w.e.f. April 12, 2023 and Mr. Vishal Singh was appointed as new Chief Executive Officer (CEO) of the Company w.e.f. April 19, 2023. The Board places on record its appreciation for the invaluable contribution and services provided by Mr. Vivek Sharma to the Company during his tenure.

FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTORS

The Company has an ongoing familiarization programme for the Independent Directors with respect to their roles, rights, responsibilities in the Company, nature of the industry in which the Company operates, business model of the Company, etc. All the Board members of the Company are afforded every opportunity to familiarize themselves with the Company, statutory changes impacting the Company, its Management and its operations and all the information /documents sought by them is/are shared with them for enabling a good understanding of the Company, its various operations and the industry of which it is a part. The details of the familiarization programme for Independent Directors are disclosed on the Companys website under the weblink:

https://www.benareshotelslimited.com/content/dam/thrp/benareshotelslimited/documents/indepenent-directors/familiarization-programme-BHL.pdf

NUMBER OF MEETINGS OF THE BOARD

During the year under review, five (5) Board Meetings were held and the intervening gap between the meetings did not exceed the period of one hundred and twenty days, the details of which are given in the Corporate Governance Report, which forms a part of the Annual Report.

STATUTORY AUDITORS

M/s PKF Sridhar & Santhanam LLP, Chartered Accountants, (Firm Registration No. 003990S/S200018) were appointed as the Statutory Auditors of the Company at the 46th AGM to hold office for a period of one financial year from the conclusion of the 46th AGM until the conclusion of the 47th AGM and then at the 47th AGM to hold office for a period of five financial years from the conclusion of the 47th AGM until the conclusion of the 52nd AGM to examine and audit the accounts of the Company. The Company can appoint M/s PKF Sridhar & Santhanam LLP, as the Statutory Auditors of the Company, for a further period of 4 (four) years – which would be in compliance with the 10 (ten) year tenure restriction set out under Section 139 of the Companies Act. The Board of Directors based on the recommendation of the Audit and Risk Management Committee approved the re–appointment of PKF Sridhar & Santhanam LLP as the Statutory Auditors of the Company for a further period of four Financial Years, i.e. to hold office from the conclusion of the ensuing 52nd AGM till the conclusion of the 56th AGM of the Company, to audit and examine the books of accounts of the Company, subject to approval of the Members at the ensuing AGM.

The necessary resolution for the re-appointment of PKF Sridhar & Santhanam LLP, forms a part of the Notice convening the ensuing AGM scheduled to be held on Thursday, August 24, 2023.

The Statutory Auditors Report on the Financial Statements of the Company for Financial year 2022-23 does not contain any qualifications, reservations, adverse remarks or disclaimer.

The Statutory Auditors of the Company have not reported any fraud as specified under Section 143 (12) of the Act, in the year under review.

SECRETARIAL AUDITORS

In terms of Section 204 of the Act, and Rules made thereunder, D. S. Associates, Company Secretaries (C.P. No. 7347) were appointed as Secretarial Auditors of the Company to conduct the Secretarial Audit of records and documents of the Company for Financial Year 2022-23 and their report is attached as Annexure 1 to this Report. The Secretarial Auditors Report, does not contain any qualifications, reservations, disclaimers or adverse remarks.

COST AUDITORS

Maintenance of cost records as specified by the Central Government under Section 148 (1) of the Act is not applicable to the Company.

ANNUAL RETURN

As provided under Section 92(3) and 134(3)(a) of the Act, the Annual Return in Form MGT-7 for Financial Year 2022-23 is available on the website of the Company at https://www.benareshotelslimited.com/en-in/AGM-2023/

VIGIL MECHANISM

In accordance with Section 177(9) of the Act and Regulation 22 of SEBI Listing Regulations, the Company has established the necessary vigil mechanism that provides a formal channel for all its Directors, Employees and other stakeholders to report concerns about unethical behavior, actual or suspected fraud or violation of the Companys Code of Conduct. The details of the policy have been disclosed in the Corporate Governance Report, which forms a part of the Annual Report and is also available on https://www.benareshotelslimited.com/content/dam/thrp/benareshotelslimited/documents/announcement-policies/bhl-whistle-blower-policy-revised-21-07-2023.pdf

CORPORATE SOCIAL RESPONSIBILITY AND SUSTAINABILITY COMMITTEE

The brief outline of the Corporate Social Responsibility (CSR) policy of the Company and the initiatives undertaken by the Company on CSR activities during the year under review are set out in Annexure 2 of this report in the format prescribed in the Companies (Corporate Social Responsibility Policy) Amendment Rules 2022. For other details regarding the CSR and Sustainability Committee, please refer to the Corporate Governance Report, which is a part of this report. The CSR policy is available on https://www.benareshotelslimited.com/content/dam/thrp/benareshotelslimited/documents/announcement-policies/BHL-CSR-POLICY-2021-2022.pdf

POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION AND OTHER DETAILS

The Companys policy on directors appointment and remuneration and other matters provided in Section 178(3) of the Act is available on https://www.benareshotelslimited.com/content/dam/thrp/benareshotelslimited/documents/policies/remuneration.pdf

DISCLOSURES IN RELATION TO THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013 (POSH Act)

The Company has always believed in providing a safe and harassment-free workplace for every individual working in the Company. The Company has complied with the applicable provisions of the POSH Act, and the rules framed thereunder, including constitution of the Internal Complaints Committee. The Company has in place an Anti-Sexual Harassment Policy in line with the requirements of the POSH Act and the same is available on the Companys website https://www.benareshotelslimited.com/content/dam/thrp/benareshotelslimited/documents/policies/BHL-POSH-Policy-Final.pdf

During the financial year 2022-23 the Company has not received any complaint on sexual harassment. No case remains pending as on March 31, 2023.

INFORMATION PURSUANT TO RULE 5 OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014

The information required under Section 197 of the Act read with Rule 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended is furnished in Annexure 3.

PARTICULARS OF EMPLOYEES

The Company had no employees during the year who were in receipt of remuneration aggregating to: (a) Not less than Rs. 102.00 lakhs for the year, if employed throughout the financial year, or (b) Not less than Rs. 8.50 lakhs per month, if employed for part of the financial year.

BUSINESS OVERVIEW

An analysis of the Business and Financial Results are given in the Management Discussion and Analysis, which forms a part of the Annual Report.

FINANCE COST

Finance cost for the year ended 31st March 2023 was Rs. 36.77 lakhs (Previous year Rs. 64.80 Lakhs). Breakup of the total interest cost of Rs. 36.77 lakhs is as follows: Interest expenses on borrowings: Nil Interest on lease liability: Rs. 36.77 lakhs

DEPRECIATION – Rs. 600.91 Lakhs (Previous Year - Rs. 636.32 Lakhs)

PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS

The Company falls within the scope of the definition of ‘infrastructure company as provided by the Act. Accordingly, the Company is exempt from the provisions of Section 186 of the Act with regards to Loans, Guarantees, Securities provided and Investments. Therefore, no details are provided.

BORROWINGS

During the year under report, the Company has not accepted any borrowings. The borrowings are Nil as on 31st Mar 2023. (Previous Year - Nil)

CAPITAL EXPENDITURE

During Financial Year 2022-23, the capital expenditure incurred was Rs. 158.23 Lakhs (Previous year Rs. 34.74 Lakhs).

DEPOSITS FROM PUBLIC

The Company has not accepted and / or renewed any deposits from public covered under Chapter V of the Act and as such, no amount on account of principal or interest on deposits from public was outstanding as at the end of Financial Year 2022-23.

RELATED PARTY TRANSACTIONS

In line with the requirements of the Act and the SEBI Listing Regulations, as amended, the Company has formulated a Policy on Related Party Transactions for identifying, reviewing, approving and monitoring of Related Party Transactions and the same can be accessed on the Companys website at https://www.benareshotelslimited.com/content/dam/thrp/benareshotelslimited/documents/announcement-policies/Related-Party-Transaction-Policy.pdf During the year under review, all Related Party Transactions that were entered into were in the Ordinary Course of Business and at Arms Length Basis. All transactions entered into with related parties were approved by the Audit and Risk Management Committee.

None of the transactions with related parties are material in nature or fall under the scope of Section 188(1) of the Act. The information on transactions with related parties pursuant to Section 134(3)(h) of the Act read with Rule 8(2) of the Companies (Accounts) Rules, 2014, as amended, in Form AOC-2 is not applicable to the Company for Financial Year 2022-2023 and hence the same is not provided.

CORPORATE GOVERNANCE

As required by SEBI Listing Regulations, the report for the year 2022-23 on Management Discussion and Analysis; and Corporate Governance along with the Practicing Company Secretarys Certificate regarding compliance of conditions of Corporate Governance norms as stipulated in Regulation 34 read along with Schedule V of the SEBI Listing Regulations forms part of the Annual Report.

COMPLIANCE WITH SECRETARIAL STANDARDS ON BOARD MEETINGS AND GENERAL MEETINGS

The Company has complied with the provision of Secretarial Standards on Board Meetings and General Meetings issued by the Institute of Company Secretaries of India.

The Company has devised proper systems to ensure compliance with the provisions of all applicable Secretarial Standards issued by the Institute of Company Secretaries of India and that such systems are adequate and operating effectively.

DIRECTORS RESPONSIBILITY STATEMENT

Based on the framework of internal financial controls and compliance systems established and maintained by the Company, the work performed by the internal, statutory and secretarial auditors and external consultants, including the audit of internal financial controls over financial reporting by the statutory auditors and the reviews performed by the Management and the relevant Board Committees, including the Audit and Risk Management Committee, the Board is of the opinion that the Companys internal financial controls were adequate and effective during the FY 2022-2023.

Pursuant to Section 134(5) of the Act, the Board of Directors, to the best of its knowledge and ability, confirm that:

a) in the preparation of the annual accounts, the applicable accounting standards have been followed and there are no 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 Act 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;

e) they have laid down internal financial controls to be followed by the Company and such internal financial controls are adequate and 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.

MATERIAL CHANGES AND COMMITMENT AFFECTING THE FINANCIAL POSITION OF THE COMPANY

Effective from April 1, 2023, The Gateway Hotel, Gondia has been rebranded as Ginger Hotel, Gondia. This transition is expected to benefit the hotel in terms of market positioning and profitability. There are no material changes affecting the financial position of the Company till the date of signing of Financial Statements of the Company.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS

During the year under review, no significant material orders were passed by the regulators or courts or tribunals impacting the going concern status and the Companys operations.

RISK MANAGEMENT

The Audit and Risk Management Committee is responsible for monitoring and reviewing the Enterprise Risk Management process and ensuring its effectiveness. The Committee has additional oversight in the area of financial risks and controls. The major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuous basis. The details of the Committee and its term of reference are set out in the Corporate Governance Report.

Your Company has a Risk Management Policy, pursuant to the provisions of Section 134 of the Act, to identify and evaluate business risks and opportunities for mitigation of the same on a continuous basis. This framework seeks to create transparency, minimize adverse impact on business objective and enhance your Companys competitive advantage. The risk management framework defines the risk management approach across the enterprise at various levels including documentation and reporting.

The framework enables risks to be appropriately rated and graded in accordance with their potential impact and likelihood. The two key components of risks are the probability (likelihood) of occurrence and the impact (consequence) of occurrence, if the risk occurs. Risk is analyzed by combining estimates of probability and impact in the context of existing control measures.

The key business risks identified by the Company and its mitigation plans are as under:

PARTICULARS OF ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO [PURSUANT TO COMPANIES (ACCOUNTS) RULES, 2014]

A. CONSERVATION OF ENERGY: The Company has always been conscious of the need for conservation of energy and has been sensitive in making progress towards this end. During the year, the Company has enhanced the capacity of solar power plant at Taj Ganges, Varanasi by 270 kwp. Post this installation, the total solar power plant capacity has reached to 770 kwp at Taj Ganges, Varanasi. Further, the Company has added three electric vehicles in its fleet for guest transportation.

B. TECHNOLOGY ABSORPTION: There is no material information on technology absorption to be furnished. The Company continues to adopt and use the latest technologies to improve the efficiency and effectiveness of its business operations.

C. FOREIGN EXCHANGE EARNINGS AND OUTGO: In terms of the provisions of Section 134(3)(m) of the Act, read with Rule 8(3)(C) of The Companies (Accounts) Rules, 2014, the foreign exchange earned in terms of actual inflows during the year and the foreign exchange outgo during the year in terms of actual outflows is furnished below:

PROCEEDINGS UNDER INSOLVENCY AND BANKRUPTCY CODE, 2016

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.

VALUATION

During the year under review, there were no instances of onetime settlement with any Banks or Financial Institutions.

INTERNAL FINANCIAL CONTROL SYSTEM AND THEIR ADEQUACY

Your 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 well defined in the organization. To maintain its objectivity and independence, the Internal Audit function reports to the Chairman of the Audit and Risk Management Committee of the Board.

The Internal Auditors monitors and evaluate the efficacy and adequacy of internal control systems 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, process owners undertake corrective action in their respective areas and thereby strengthen the controls. All significant audit observations and corrective actions suggested are presented to the Audit and Risk Management Committee of the Board for review. The internal financial controls as laid down are adequate and were operating effectively during the year under review.

The Boards Audit and Risk Management Committee oversees the adequacy of the internal control environment through periodic reviews of audit findings and by monitoring implementation of internal audit recommendations through compliance reports. In addition, as required under Section 143 of the Act, the Statutory Auditors have evaluated and expressed an opinion on the Companys internal financial controls over financial reporting based on the audit for the FY 2022-23. In their opinion, the Company has, in all material respects, adequate internal controls over financial reporting and such internal financial controls over financial reporting were operating effectively as on March 31, 2023.

COMMITTEES OF THE BOARD

a. Audit and Risk Management Committee

b. Nomination and Remuneration Committee

c. Corporate Social Responsibility and Sustainability Committee

d. Stakeholders Relationship Committee

During the year under review, all recommendations of the Committees were approved by the Board. The details including the composition of the committees including attendance at the meetings and terms of reference are included in the Corporate Governance Report, which forms a part of the Annual Report.

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 on the basis of criteria such as the board composition and structure, Degree of fulfilment of key responsibilities towards stakeholders (by way of monitoring corporate governance practices, participation in the long-term strategic planning, etc.); effectiveness of board processes, information and functioning, etc.; extent of co-ordination and cohesiveness between the Board and its Committees; and Quality of relationship between Board Members and the Management.

The performance of the committees was evaluated by the Board after seeking inputs from the committee members on the basis of 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 on January 5, 2017.

In a separate meeting of Independent Directors, performance of Non-Independent Directors, the Board as a whole and the Chairman of the Company was evaluated, taking into account the views of Non-Executive Directors.

The Board and the NRC reviewed the performance of individual Directors on the basis of criteria such as the contribution of the individual Director to 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.

ACKNOWLEDGMENT

The Directors thank the Companys customers, vendors, investors, partners and all other stakeholders for their continuous support.

The Directors appreciate and value the contribution made by all our employees and their families.