CKP Leisure Management Discussions

The Management of CKP Leisure Limited presents the Management Discussion and Analysis (MD&A) of the Company for the year ended on March 31, 2019 and its outlook for the future. This outlook is based on assessment of current business environment. It may vary due to future economic and other developments both in India and Abroad. It contains financial highlights but does not contain the complete financial statements of the Company. It should be read in conjunction with the Companys Audited Financial Statements for the year ended on March 31, 2019.


Global Scenario:

The Bars and Nightclubs industry has experienced growth over the five years to 2019, despite slight declines in revenue during the early half of the five-year period. These dips were a result of shaky consumer confidence and changing consumer preferences, causing more people to drink at home rather than at bars or nightclubs. However, industry revenue growth picked up in the latter half of the period due to the growing domestic economy, and overall growth is expected to reach an annualized rate of 2.9% to $26.7 billion. Industry revenue is expected to increase 2.9% as per capita alcohol consumption and disposable income rise, permitting people to spend more of their pay at bars and nightclubs. rising alcohol prices, wariness of drunk driving and evolving attitudes toward alcohol consumption have constrained revenue growth. Industry operators have responded to these challenges by diversifying into a range of new concepts, such as wine bars, cocktail lounges and brewpubs, to attract new demographics. However, strict regulations on liquor licences and rising competition has discouraged new operators from entering the industry. Over the five years to 2024, the industry is projected to continue contending with competition from in-home alcohol consumption and establishments that operate outside the industry that also serve alcohol, such as restaurants. Despite these factors, the industrys financial performance is forecast to improve. The South East is estimated to account for the largest share of establishments, with 13.3% of the industry total. The region is densely populated and its residents tend to have high disposable incomes, which makes the area highly attractive to nightclub operators. Brighton and Portsmouth both have a large number of clubs and contribute highly to the regions share of establishments. The North West accounts for 11.7% of industry establishments, outweighing its 11% share of the population. Large cities such as Manchester and Liverpool have vibrant nightlife scenes and are home to many nightclub operators.

Indian Scenario

Dining Concepts

The individual players cater to various dining concepts which are broadly classified as follows: Formal Dining - This segment consists of specialty restaurants with formal atmosphere. The menu served is exclusive and expensive. The target market served by these restaurants is the top end of the population having high disposable income. Standalone restaurants and restaurants in five star hotels are key players covering this concept. Casual Dining - Restaurants under this concept target the corporate executives, adults and the yuppie population. The key characteristics of this concept are good decor, casual atmosphere, entertainment and an exclusive menu. This concept is found largely in standalone restaurants and coffee shops in five star hotels. Family Dining - With a change in consumer eating habits, dining out has become a part of family entertainment. There were very few restaurants catering to this market. The main target is the family which in the Indian context covers a wide range of age groups consisting of children and adults. This concept stresses on great ambience, quality food coupled with good service. The menu is economically priced and features special kids menu at selected formats. Over the counter With handful of bakery chains, this format offers bakery and confectionery products and more. It targets wide spectrum of customers, from young executives to a hang-out place for college and school kids. Night Club This concept addresses the need of the young crowd who enjoy dance and music. In the happening nightspots one can spot the citys movers and shakers dressed in the trendiest outfits. From walk-in pubs to those that insist on couples only and an entry or cover charge.


The Company proposes to sale its Substantial undertaking (Club Sirkus) to M/s. NS Hospitality, a Partnership Firm having its registered office at 101, Praful CHS, Mathuradas Road, Kandivali-West, Mumbai. Such decision taken by Board keeping in view hardship and market slow down faced by Club Sirkus post few unexpected incidents took place near Club Sirkus. The Company faced loss of goodwill and revenue due to same. So, Board of Directors feels that it is prudent to sale Club Sirkus and considers the proposed sale in best interest of the Company. Such sale will be amount to sale of substantial undertaking by the Company. Your Directors propose resolution under section 180(1)(a) of the Companies Act, 2013 for approval of the Shareholders. The Company at the same time is in process of scoping other viable projects and business opportunities.


Your company has only one segment that is Leisure & Entertainment.


Our performance and the growth of our business are necessarily dependent on the health of the overall Indian economy. As a result, any slowdown in the Indian economy could adversely affect our business. Any change in the government policies vis-a-vis expenditure, subsidies and incentives etc. in restaurant and night club sector could affect their ability to spend, thereby affecting our business and profitability.

We have been focusing on the increasing network. With large population, increasing urbanization and disposable income, the industries in which we operate provide sustainable growth on a longer-term basis. Robust growth of emerging economies provides large opportunities to the Company. We are a well-established Company in these economies and will continue to focus on the growth, new launches and increasing network strength. In other mature economies, the market trend is changing favorably. The strategy of the company is to get higher profitability and stable cash flow generations in these markets.


The internal control system is intended to increase transparency and accountability in an organizations process of designing and implementing a system of internal control. They have been designed to provide reasonable assurance with regard to recording and providing reliable financial and operational information, complying with applicable statutes, safeguarding assets from unauthorized use, executing transaction with proper authorization and ensuring compliance of corporate policies.


Sales and Other Income for the year ended March 31, 2019 amounted to Rs. 127.43 lakhs as against Rs. 1004.76 lakhs in the previous Financial Year. Net Profit for the year under review was Rs. 109.13 lakhs as against loss of Rs. 605.67 lakhs in the previous Financial Year due to sale of undertaking.


Your Company has team of qualified and dedicated personnel who have contributed to the consolidation of the operations of your Company. Your Companys industrial relations continued to be harmonious during the year under review. Your Company has succeeded in attracting and retaining key professional and intends to continue to seek fresh talents to further enhance and grow our business.


Statements in the Management Discussion and Analysis describing the Companys objectives, estimates, expectations or projections may constitute "forward looking statements", within the meaning of applicable laws and regulations. The current years outlook is Managements perception at the time of drawing this report. Actual results may differ materially from those either expressed or implied in the statement. Important factors that could influence the Companys operations include economic conditions affecting demand/supply and price conditions in the domestic and international markets, changes in the Government regulations, tax laws economic developments within the country and other factors such as litigation, industrial relations and other statutes and other incidental factors.