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To the Members,

Your Companys Directors have pleasure in presenting before you the 61st Annual Report of the Company together with the Audited Financial Statements for the Financial Year (FY) ended 31st March, 2023.

FINANCIAL SUMMARY

Standalone Financial Performance for the year ended March 31, 2023 is summarized below:

Particulars

Rs. in lakhs Rs. in lakhs
Financial year ended March 31, 2023 Financial year ended March 31, 2022

Revenue from Operations

196.46 --

Other Income (net)

2410.33 370.87

Total Income

2606.79 370.87

Less: Operating Expenditure (Employee benefit expenses)

(97.89) (50.37)

Less: Finance costs

(1239.38) (352.59)

Less: Depreciation & amortization expense

(281.82) (78.47)

Less: Other expenses (net)

(2070.67) (148.68)

Profit/ (Loss) before exceptional and Extraordinary items and tax

(1082.97) (259.24)

Exceptional Items

-- -

Profit/ (Loss) before Extraordinary items and tax

(1082.97) (259.24)

Extraordinary Items

-- -

Profit / (Loss) before tax

(1082.91) (259.24)

Tax expenses

(274.56) 9.98

Profit / (Loss) after tax

(808.35) (249.26)

Total Comprehensive Income for the period (Comprising profit/loss from ordinary activities after tax and other comprehensive income for the period)

1481.26 (249.26)

DISCLOSURE UNDER COMPANIES ACT 2013:

Pursuant to the Section 134 of Companies Act, 2013 read with Companies (Accounts Rules), 2014, the Company has complied with requirements and the details of which are as disclosed here under:

(i) Annual Return

As provided under Section 92(3) and 134(3)(a) of Companies Act, 2013, the Annual Return in form MGT-7 for the financial year 2022-2023 is available on the website of the Company at www.arunahotels.com

(ii) Number of meetings of the Board

The Board of Directors met 6 (six) times during the financial year 2022-2023. The details of the Board meetings and the attendance of the Directors are given in the Corporate Governance Report, which forms part of this Annual Report.

(iii) Directors Responsibility Statement

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

a) in the preparation of the annual accounts for the financial year ended 31st March, 2023, the applicable accounting standards have been followed and that no material departures have been made from the same;

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 profits of the Company for that period;

c) they had 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;

e) they have laid down internal financial controls to be followed by the Company and ensured that such Internal financial controls are adequate and were operating effectively; and

(iv) Details in respect of frauds reported by the auditors:

During the year under review, the Auditors have not reported to the audit committee, under Section 143 (12) of the Companies Act, 2013, any instances of fraud committed against the Company by its officers or employees, the details of which would need to be mentioned in the Boards report.

(v) A statement on declaration given by Independent Directors:

The Company has received necessary declarations from every independent Director under Section 149(7) of the Companies Act, 2013, that he / she meets the criteria of independence laid down in Section 149(6) of the Companies Act, 2013 and Regulation 25 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

(vi) Companys policy on Directors appointment and Remuneration:

Companys policy on directors appointment and remuneration including criteria for determining qualifications, positive attributes and independence of a director and other matters as per Section 178(3) of the Act has been disclosed in the Corporate Governance Report, which forms part of the Boards Report and also is disclosed on Companys website www.arunahotels.com

(vii) Explanation of Board on qualification of Statutory Auditors and Secretarial Auditors, if any

The Auditors Report for the financial year 2022-2023 does not contain any qualification, reservation or adverse remark. The Report is enclosed with the financial statements in this Annual Report.

As required by the Listing Regulations, the Practicing Company Secretarys certificate on Corporate Governance for the financial year 2022-2023 is enclosed as Annexure to this Annual report. The certificate does not contain any qualification, reservation or adverse remark, except that of few observations.

The Secretarial Auditors Report for the financial year 2022-2023 does not contain any qualification, reservation or adverse remarks, except that of few observations. The Secretarial Auditors Report is enclosed as Annexure to this Annual report.

(viii) Particulars of loans, guarantees or investments given or made by the Company

During the year under review, Company has not given any loan, guarantee or provided any security and made any investments pursuant to section 186 of the Companies Act, 2013. Also, the Company is engaged in the business of providing ‘Infrastructural facilities(under Schedule VI of Companies Act, 2013), the provisions of Section 186 of the Companies Act, 2013 pertaining to provision of Loans, Guarantees or Investments shall not be applicable to the Company.

(ix) 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 www.arunahotels.com.

The related party transactions entered into with related parties during the year under review were in the ordinary course of business and at arms length basis and in compliance with the applicable provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. All transactions entered into with the related parties were approved by the Audit Committee.

None of the transactions with related parties are material in nature or fall under the scope of Section 188 (1) of the Companies Act, 2013. 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 the financial year 2022-2023 and hence the same is not provided.

(x) State of Affairs

During the year under review, Profit before tax was Rs. (1082.97) lakhs as against Rs. (259.24) lakhs in the previous year. Also, during the year under review, the Company has started its hotel operations under the name of “Pharos Hotels” which is a unit of Aruna Hotels Limited with effect from November 30, 2022. The Company is in the process of stabilizing its operations which might take a few quarters to post healthier numbers.

(xi) Transfer to Reserves

Due to Loss, the Company has not transferred or proposed to transfer any amount to the Reserves for the year under review.

(xii) Dividend

As the Company has incurred loss in the year under review, after considering the relevant circumstances, the Board of Directors has decided that it would be prudent, not to recommend Dividend to its shareholders.

(xiii) Material changes and commitments, if any, affecting the financial position of the company which have occurred between the end of the financial year of the company to which the financial statements relate and the date of the report

There are no material changes and commitments affecting the financial position of the Company between the end of the financial year i.e., 31st March, 2023 and the date of this report.

(xiv) Conservation Of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo

1. Conservation of Energy

Considering the nature of activities in which the Company operates, energy consumption is in accordance to the normal business practices and does not require any specific installations. In its regular course of business, the Company is always vigilant to conserve the resources and continuously implements measures required to save energy.

2. Technology Absorption

The business activities of the Company are not specific to any technology requirements. Hence disclosures pertaining to conservation of energy and technology absorption are not applicable to your Company during the year under review.

3. Foreign Exchange Earning and Outgo

There were no foreign exchange inflows or outflows during the year under review.

(xv) Risk Management Policy

Internal compliance and control policies and procedures of the Company and policies for monitoring and evaluation of risk management systems to assess the effectiveness of those systems in minimizing risks that may impact adversely on the business objectives of the Company were established. At present, the Company has not identified any element of risk which may threaten the existence of the Company. However, the Constitution of a Risk Management Committee as per Regulation 21 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, is not applicable to the Company.

(xvi) Corporate Social Responsibility (CSR):

During the year under review, the provisions of Section 135 of the Companies Act, 2013 pertaining to the Corporate Social Responsibility are not applicable to the Company.

(xvii) Board Evaluation

Your Company has a structured framework for evaluation of the Individual Directors, Chairperson and Board as a whole and its Committees. The Independent Directors at their Meeting held on 13.02.2023 evaluated the performance of Non-Independent Directors, Board as a whole, Chairperson 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.

The Board of Directors at their Meeting held on 12.08.2022 evaluated the performance of all Independent Directors and the Board as a whole and its Committees and assessed the quality, quantity and timeliness of flow of information between the Company Management and the Board through circulation of questionnaires, to assess the performance on select parameters relating to roles, responsibilities and obligations of the Board and functioning of the Committees. The evaluation criteria were based on the participation, contribution and guidance offered and understanding of the areas etc., which are relevant to the Directors in their capacity as Members of the Board/Committees.

(xvii) Change in the nature of Business:

There is no change in the nature of Business during the year under review.

(xix) Directors and Key Managerial Personnel:

Directors:

The Board of Directors of Aruna Hotels Limited currently comprises of 5 (five) Directors with a balanced combination of a. Executive, b. Non-Executive (Non-Independent) and c. Independent Directors.

All the Independent Directors have furnished necessary declaration under Section 149(7) of the Act and under Regulation 25(8) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. As per the said declarations, they meet the criteria of Independence as provided in Section149 (6) of the Act and the SEBI Listing Regulations. All of them have confirmed that they have registered themselves with the Indian Institute of Corporate Affairs under Rule 6 of Companies (Appointment and Qualification of Directors ) Rules, 2014 as amended.

(i) During the financial year 2021-2022, Mr. Suyambu Narayanan (DIN: 07718798) was re-appointed as Independent Director of the Company (not liable to retire by rotation) to hold office for a second term of five (5) consecutive years commencing from 10.02.2022 to 09.02.2027. The approval of shareholders was obtained through Postal ballot by means of remote e-voting facility on 15.04.2022.

(iii) During the financial year 2021-2022, Mr. Radhaswamy Venkateswaran (DIN: 09532159) was appointed as Managing Director of the Company for a period of 5 (five) consecutive years commencing from 10.03.2022 to 09.03.2027 and the Shareholders of the Company have given their approval through Postal Ballot by means of remote e-voting facility on 15.04.2022

(iv) During the year under review, Mr. R Rajkumar (DIN: 09702043) was appointed as an Additional Director (Nonexecutive & Non-Independent) by the Board of Directors at their meeting held on 12.08.2022 on recommendation of Nomination and Remuneration Committee and the regularization of his appointment as Director (Non-Executive, Non-Independent) of the Company was approved in the shareholders meeting (AGM 2022) held on 23.09.2022.

(v) During the year under review, Mr. Rajakumar Kumaravelayetha Nadar (DIN: 05187894) resigned from the post of Director (Non-Executive Non-Independent) with effect from 12.08.2022.

(vi) In accordance with provisions of Section 152 (6) of the Companies Act, 2013 and the Articles of Association of the Company, Mr. R Muralidharan, Director (DIN: 07092976) of the Company, retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-election.

Key Managerial Personnel:

Pursuant to the provisions of Section 203 of the Companies Act, the Key Managerial Personnel of the Company as on March 31, 2023 are:

a. Mr. Nagaraj P, Chief Financial Officer (CFO)

b. Ms. K. Lakshmi, Company Secretary

(xx) Statement regarding opinion of the Board with regard to integrity, expertise and experience of the Independent Directors appointed during the year During the year under review, no Independent Directors were appointed

(xxi) Subsidiary, Associates and Joint Ventures

Your Company has no subsidiary during the year or at any time after the closure of the year and till the date of this report. Hence, a statement containing the salient features of financial statements of the Companys subsidiaries in Form AOC-1 is not applicable.

Associates and Joint Ventures

Your Company has no Associates or Joint Ventures during the year or at any time after the closure of the year and till the date of this report.

(xxii) Deposits

The Company has not invited or accepted any deposits during the year under review and there are no deposits covered under Chapter V of the Companies Act, 2013 during the year 2022-2023, the details of which are required to be furnished.

(xxiii) Details of significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and companys operations in future:

During the year under review and as on date of the Report, the following are/were the material orders passed by the Regulators and fine(s) that was/were imposed on the Company: No impact on the going concern status and companys operations in future.

During the year under review, Securities Appellate Tribunal (SAT) Review Application No.86 of2022 and Miscellaneous Application No.1758 of 2022, Mumbai had been dismissed vide order dated February 14, 20023

• As on the date of this report, the following shareholders of the Company were alleged to have violated provisions of Regulation 3(2) read with Regulation 13 (1), Regulation 29 (2) read with 29(3) and Regulation 10(5), 10(6) and 10(7) ofSEBI (Substantial Acquisition of Shares and Takeover) Regulations, 2011 (SAST Regulations).

1. Balasubramanian Sivanthi Adityan

2. Sri Devi Agencies Private Limited

3. Chandramohan R

4. Anita Kumaran

5. Jayanthi Natarajan

6. Gay Travels Private Limited

7. Subasri Realty Private Limited

8. Rani Printers Private Limited

9. Sovereign Media Marketing Private Limited

10. Chithan V

The Said shareholders had availed the benefit of settlement process with SEBI in respect of the Show Cause Notice issued dated 20.09.2022 under Rule 4(1) of SEBI (Procedure for Holding Inquiry and Imposing Penalties) Rules, 1995 in the matter of Aruna Hotels Limited by the Chief and General Manager & Adjudicating Officer, SEBI.

In relation thereto, the Company had submitted disclosures under Regulations 10(5), 10(6), 29(1) and 29(2) ofSEBI SAST Regulations for the inter se transfer as per Memorandum of Compromise among the Promoters pertaining to the financial year 2015-2016.

Referring to the Application for availing settlement in terms of SEBI (Settlement Proceedings) Regulations, 2018, SEBI on 23.05.2023 accepted the settlement proposal which was filed by the said shareholders. The said application along with the Revised Settlement Terms proposed by the said shareholders were examined by the Independent High Powered Advisory Committee (HPAC) and recommended the specified proceedings be settled upon payment of Rs.2,32,05,000/-. Upon consideration of the recommendation of the HPAC, SEBI has in principle agreed to accept the terms of settlement recommended by the HPAC.

In acceptance thereof by SEBI, the shareholder M/s Subasri Realty Private Limited on its behalf and on behalf of the other shareholders has accordingly paid amount of Rs.2,32,05,000/- (Rupees Two Crores Thirty Two Lakhs and Five Thousand only) towards Settlement fees.

In this regard, SEBI vide its Settlement order dated June 07, 2023 passed an Order such that, in view of acceptance of the settlement terms and receipt of the Settlement amount as above by SEBI, an instant adjudication proceedings initiated against the Applicants (as above mentioned) vide SCN dated September 20, 2022 is disposed off in terms of Section 15JB of the SEBI Act read with Regulation 23(1) of the Settlement Regulations on the basis of the settlement terms.

(xxiv) Internal Financial Control

The Company has a proper and adequate internal control system to ensure that all the assets of the Company are safeguarded, to prevent and detect frauds and any other irregularities, proper application of appropriate accounting policies and procedures to ensure completeness of the accounting records, compliance with policies, rules and regulations, timely preparation of reliable financial information and prevention or timely detection of unauthorized acquisition, use or disposition of the Companys assets that could have material effect on the financial statements

The Company has engaged a firm of external consultants for the internal audit function to continuously monitor the effectiveness of internal controls.

(xxv) Maintenance of Cost Records

Maintenance of cost records and the requirement of Cost Audit under the provisions of Section 148 (1) of the Companies Act, 2013 are not applicable to the Company.

(xxvi) Internal Complaints Committee

The Company has constituted an Internal Complaints Committee to prevent and prohibit any form of sexual harassment at workplace and provide redressal for woman employees as required under Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. During the year, there was no event affecting any of the women employees on account of any sexual harassment at the work place.

(xxvii) Proceedings under Insolvency and Bankruptcy Code, 2016

As on date of this report, Appeal vide Comp App (AT) (CH) (Ins) No. 68/2023 under Insolvency and Bankruptcy Code 2016 is pending before the National Company Law Appellate Tribunal (NCLAT)

(xxviii) the details of difference between amount of the valuation done at the time of one time settlement and the valuation done while taking loan from the Banks or Financial Institutions along with the reasons there of.] - Not applicable

(xxix) Capital Structure

During the financial year 2022-2023, there was no change in the Authorised Share Capital of the Company and stood at Rs. 75 Crores divided into 6,70,00,000 (Six crores seventy lakhs) equity shares of face value of Rs.10/- each and 8,00,000 (Eight lakhs) Preference shares of Rs.100/- each constituting Redeemable Preference share capital of the Company.

Paid Up Share Capital

During the financial year under review 2022-2023, the paid-up share capital of the Company is Rs. 36,94,00,000 (Rupees Thirty Six Crores Ninety Four Lakhs Only) comprising of 3,39,00,000 equity shares of Rs.10/- each and 3,04,000 Redeemable Preference Shares of Rs.100/- each.

During the year under review, the Company has transferred a sum of Rs. 6,00,000/- (Rupees Six Lakhs), being redemption amount of preference shares that remained unclaimed to the Investor Education and Protection Fund (IEPF) Account. The Company has sent out confirmations to preference shareholders and has received responses from few parties. Preferably, the Company will be redeeming the share capital to the persons from whom it had received confirmation. The Redemption amount of preference shares remaining unpaid or unclaimed from parties will be transferred to Investor Education and Protection Fund under section 205 of Companies Act, 2013.

During the year under review, the Company has neither issued any shares with differential voting rights nor issued any sweat equity shares.

(xxx) Meetings of the Board

During the financial year under review, 6 (Six) Board Meetings were held and the gap between two meetings did not exceed one hundred and twenty days. The said meetings were held on 27.05.2022, 11.08.2022, 12.08.2022, 26.08.2022, 12.11.2022 and 13.02.2023. Necessary quorum was present for all the meetings. Other details including the composition of the Board and the Committee Meetings thereof held during the year under review (FY 20222023) are given in the Corporate Governance Report forming part of this Report.

Meeting of the Independent Directors:

During the year, one Meeting of Independent Directors was held on 13.02.2023. All the Independent Directors were present.

Committees of the Board

A detailed note on the composition of the Board and its committees is provided in the Corporate Governance Report section which forms part of this Annual Report.

(xxxi) Familiarization Programs for Independent Directors

In accordance with the requirements of Listing Regulations, 2015 and Schedule IV of the Act, as amended, the Company has a programme to familiarize the Independent Directors of the Company including in relation to the nature of industry in which the Company operates and the roles, rights and responsibilities of the Independent Directors.

The Programme aim at enabling the Independent Directors to understand and keep them updated on an ongoing basis about the significant changes which occur in the industry. Due to this familiarization programs, it was concluded that the Board is able to take active participation in the decision-making process and is equally involved in the affairs of the Company.

Remuneration ratio of the directors / Key Managerial Personnel (KMP) / employees.

The information required pursuant to Section 197 read with Rule 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and Companies (Particulars of Employees) Rules, 1975, in respect of employees of the Company and Directors is furnished hereunder:

S.No.

Particulars

Ratio

1.

the ratio of the remuneration of each director to the median remuneration of the employees of the company for the financial year (i) Mr. Radhaswamy Venkateswaran

0.52:1

2.

the percentage increase in remuneration of each director, Chief Financial Officer, Chief Executive Officer, Company Secretary, or Manager, if any, in the financial year

10%

3.

the percentage increase in the median remuneration of employees in the financial year

Nil

4.

the number of permanent employees on the rolls of the company

15 employees

5.

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

Nil

*The ratio of the remuneration of Mr. Radhaswamy Venkateswaran, Managing Director to the median remuneration of the employees calculated for a period of 12 months during the FY 2022-2023

It is affirmed that the Remuneration is as per the Remuneration policy for the Directors, Key Managerial Personnel and other employees adopted by the Company.

(xxxii) Policy on Vigil Mechanism (Whistleblower Policy)

The Company has formulated and established the necessary Vigil Mechanism (Whistleblower Policy) for employees including Directors of the Company in confirmation with Section 177(9) of the Act and Regulation 22 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 to report genuine concerns about unethical behaviour. The details of the policy have been disclosed in the Corporate Governance Report, which is a part of this report and is also available on the website at www.arunahotels.com

(xxxiii) Auditors:

(a) Statutory Auditors:

At the 58thAGM held on 21st day of September, 2020, the members approved appointment of M/s Bala & Co., Chartered Accountants, Chennai (Firm Registration No.: 000318S) as Statutory Auditors of the Company to hold office for a term of five years from the conclusion of 58thAGM till the conclusion of 63 rd AGM (AGM 2025). The Statutory Auditors Report for the financial year 2022-2023 on the financial statement of the Company, forms part of this Annual Report.

The Statutory Auditors Report on the financial statements of the Company for the financial year 2022-2023 does not contain any qualifications, reservations or adverse remarks or disclaimer.

During the year under review, the Statutory Auditors of the Company have not reported any fraud as specified under Section 143(12) of the Companies Act, 2013

(b) Internal Auditors:

In accordance with the provisions of Section 138 of the Companies Act, 2013 M/s. GSPU & Associates, chartered Accountants (FRN :011266S), were appointed as the Internal Auditors of the company for the financial year 2022-2023.

(c) Secretarial Auditors:

M/s J.Jothi & Associates, Practicing Company Secretaries (CPNo.17899), Chennai, were appointed as secretarial auditors of the Company for the financial year 2022-2023, as required under Section 204 of the Companies Act, 2013 to conduct the Secretarial Audit of records and documents of the Company for financial year 2022-2023. The Secretarial Audit Report in form no. MR-3 issued by the Secretarial Auditor for the financial year 2022-2023 is annexed hereunder.

For the financial year 2022-2023, the Company does not have any material unlisted Indian subsidiaries. As such the requirement to attach secretarial audit reports of material unlisted Indian subsidiaries pursuant to Regulation 24A (1) of SEBI Listing Regulations is not applicable to the Company.

(xxxiv) Compliance with Secretarial Standards:

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

(xxxv) Listing Requirements

Your Companys Equity shares are listed on the BSE Limited, Mumbai. Listing fees have been paid to this Stock Exchange for the financial year 2022-2023.

(xxxvi) Dematerialization of Shares

The Companys shares are compulsorily traded in dematerialized form on the BSE Stock Exchange. Equity Shares of the Company representing 91.44% of the Companys equity share capital are dematerialized as on March 31, 2023. Under the Depository system, the International Securities Identification Number (ISIN) allotted to the Companys shares is INE957C01019.

(xxxvii) Corporate Governance

As per SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Corporate Governance Report with Auditors Certificate thereon and Management Discussion and Analysis Report are attached, which form part of this report.

(xxxviii) Management Discussion & Analysis Report

Management Discussion & Analysis Report for the year under review, as stipulated under Regulation 34(2) of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 is annexed as annexure to this report. Acknowledgement

Your Directors take this opportunity to express their gratitude to Companys Bankers, Suppliers, Government Departments and other business associates for their unstinted support extended to the Company. Your Directors wish to place on record, their appreciation of the efficient and dedicated services rendered by the employees at all levels across the Company. We are sincerely grateful to all the shareholders for their confidence, faith and support in the endeavours of the Company.

Date: 11.08.2023

On behalf of the Board of Directors

Place: Chennai

Sd/-

Sd/-

R Venkateswaran

Suyambu Narayanan

Managing Director

Director

DIN: 09532159

DIN: 07718798